The Real Estate Institute of Victoria believes a call by tenant advocates to cancel all rental debt sends the wrong message and could encourage tenants to stop paying their contracted rent in the expectation that the taxpayer will pick up the tab.

By law, a tenant’s wilful non-payment of rent is grounds for landlords to apply to the Victorian Civil and Administrative Tribunal for an Order to evict the tenant. 

Any suggestion that landlords will simply “kick them out for COVID related rental debt” is both incorrect and inflammatory.

REIV President, Leah Calnan said, “The pandemic hasn’t been selective, it has hit everyone; tenants, landlords and property managers. It is irresponsible to suggest that all rental debt should be wiped as it may be another person’s only source of income.”

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REIV President Leah Calnan. Source: REIV.

“It is vitally important that property managers and landlords are given sufficient advance notice of the detail behind the changes to the Residential Tenancies Act. The landlord investors are critical to keep the Victorian property market stable” said Ms Calnan.

Throughout the pandemic period, the majority of landlords have demonstrated empathy for tenants experiencing hardship. Many thousands of rent reductions have been agreed amicably between landlords and tenants, with 57,000* rent reduction agreements registered with Consumer Affairs Victoria at the beginning of November 2020. In reality, a large number of landlords have also experienced financial difficulties resulting from COVID-19. For many, rental income is their only means of supporting their own families.

The REIV is concerned that the roadmap out of the rental moratorium remains unclear. The Institute believes strongly that a clear plan from government  must be announced well ahead of the planned end to the moratorium. 

The Victorian Government is proposing to introduce over 120 changes to the Residential Tenancies Act the day after the moratorium ends. This will put substantial pressure on tenants, landlords and property managers to manage the cessation of the moratorium as well as the transition to a raft of new rules and procedures, all within a 24-hour period.

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REIV CEO Gil King. Source: REIV.

REIV CEO, Gil King said, “I am concerned that the government is taking a one-dimensional view of this and may simply wipe the slate clean on debts and rental disputes come the end of the moratorium. This would simply force many mum and dad investors from the market and cause mayhem at a time we should be working towards an economic recovery.”

The REIV has raised concerns regarding the timing of these two significant events with the Victorian Government. The Institute has strongly recommended that the commencement of changes to the Residential Tenancies Act be delayed until 1 July to provide sufficient time for the investment and rental market to get back to a level of normality post moratorium.  

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