The Real Estate Institute of the ACT (REIACT) has tentatively welcomed the announcement of rental assistance incentives for residential and commercial tenancies.
It comes after the ACT Government yesterday committed $5.25 million in emergency support measures to help residential and commercial renters and landlords hit by the pandemic.
Under the initiative, a 12-week moratorium on evictions for rent arrears has been instated for tenants in financial distress due to loss of income or working hours as a result of the current lockdown.
Residential landlords who offer rent relief will be eligible for a credit of up to $100 per week on their residential land tax.
The rebate will operate in the same way it did when offered last year.
The government is also reinstating measures requiring commercial landlords to engage in good faith negotiations with business tenants.
The new temporary commercial leases declaration will prevent commercial landlords from taking prescribed actions against tenants, such as terminating their lease, without discussing lease arrangements first.
The declaration will apply from 12 August, when the ACT went into lockdown.
Commercial landlords who offer rent relief may be eligible for a commercial rates credit of up to $5000. A credit is also available for owner-occupiers who meet the eligibility criteria.
This is in addition to the COVID-19 Business Support Grants of up to $20,000 available for businesses who have had a significant reduction in turnover due to current restrictions.
REIACT Chief Executive Officer Michelle Tynan said the commercial and residential rental assistance would benefit many tenants, but she feared many landlords were still experiencing a hangover from the 2020 emergency declarations.
“Many landlords, both commercial and residential, are simply not in a position to extend the generous reductions and deferrals that had been forthcoming last year,” Ms Tynan said.
Ms Tynan also noted many tenants are also still repaying debt accumulated during 2020 for deferral of rent payments and the likelihood of the current lockdown being extended and only gradual easing of restrictions has many tenants in untenable situations for accruing more debt.
“If landlords are not in a position to offer rent reductions, the Land Tax Incentive Scheme will be of no assistance,” she said.
“In New South Wales, the Residential Tenancy Support Package of up $3000, which can be directly accessed by landlords who pass on reductions in rent to their tenants, has been well received by both tenants and landlords.
“The scheme has enabled both tenants and landlords to reach sensible outcomes to ensure tenancies can be maintained.
“We are consistently being told this lockdown is vastly different from 2020, and we need to be able to tailor assistance in the most effective and efficient way.
“Our discussions with government today were encouraging in that they have committed to re-engage with the Institute should the lockdown become protracted and investigate other assistance measures.”
Last week, REIACT President Hannah Gill noted the benefit of a then-prospective emergency declaration was it wasn’t the first time landlords or tenants had been through the process.
“The upside is we’ve done it before. We’ve had practice,” Ms Gill said.
“There are a lot of situations where those tenants are still in debt with repayment plans and things like that. Or there are circumstances where landlords offered discounts last time but then this time, they aren’t financially able to. There’s definitely a bit of a hangover from the last lockdown.”
Commercial tenancies will also be offered the same incentive package from 2020, however small business will have access to further assistance through the COVID-19 Small Business Hardship Scheme of up to $10,000.
Attorney-General Shane Rattenbury said the residential tenancy measures were “not a rent holiday” but would provide valuable support.
“These residential tenancy measures will support these Canberrans by ensuring they do not become homeless during the moratorium period,” he said.
“Renters should continue to meet their rent obligations if they are able to do so; the 12-week moratorium on evictions for COVID-19 impacted tenants is not a rent holiday.”
There will also be new measures to prevent those required to quarantine or self-isolate from being required to leave their rental property to do so.
Chief Minister Andrew Barr said free mediation would be available to help commercial landlords and tenants negotiate changes to rental agreements.
“The economic impacts of this pandemic will be felt for years and we are providing significant financial support to keep our local small businesses going,” he said.
