The decision to extend the rental moratorium to 31 December 2020 without proportionate attention to the landlord’s distress is an example of landlords being left behind and all but forgotten as the government makes decisions on financial support for people impacted by the economic downturn, according to the Real Estate Institute of Victoria. 

Tenants have been provided with substantial financial support from the Government as well as mandated rent reductions at the expense of property owners.

This support is set to continue for more than three months to the end of this year. 

While residential property owners had steeled themselves for the six-month moratorium with compassion, empathy and a good dose of trepidation, this extension has been a ‘kick in the guts’ for them and their goodwill is being sorely tested.

“Just think about what is happening here in Victoria," said CEO REIV, Gil King.

"People who have worked hard for many years to secure their family’s future are now being dictated to about how much they can charge someone to live in their property, a property they own and maintain.

"The market demand and supply determine rental prices and should continue to do so; legislating against this will not benefit anyone.”

The REIV does not dispute that many tenants are doing it hard, as Members serve both property owners and tenants.

What concerns the REIV is the lack of due process, oversight, and enforcement to ensure that no one takes undue advantage of the situation.

There is significant evidence of some tenants taking advantage of these circumstances rendering property owners powerless to fight against the imbalance.

“Many of our agents are reporting tenants who simply refuse to pay their rent either in full, or at all," said REIV president Leah Calnan.

"Basically, it is a free-for-all.

"We have many accounts of tenants owing thousands of dollars where this money is unlikely to be recovered.

"The moratorium was supposed to support those in financial hardship as a result of Covid, not create greater hardship and financial bankruptcy for property owners.”

According to REIV, the legislation is now unfairly and squarely biased against those property owners who have worked hard to save and invest to provide for the future of their families.

A property owner’s savings and hard work is somehow of lesser perceived value than that of a tenant. 

It is important to note that while there have been over 26,000 rent negotiation agreements lodged with Consumer Advocate of Victoria since the scheme began, thousands more agreements have been reached by amicable negotiations with their landlord.

Negotiated agreements do not have to be recorded with CAV.

Overwhelmingly the supply side is keen to keep good tenants in their property and to negotiate a deal that will see that happen.

The concern REIV has with the system is that it is not fair to all.  

If a rent negotiation dispute is presented to Victorian Civil and Administrative Tribunal (VCAT), the tenant does not have to provide any evidence that they are suffering COVID-19 financial hardship, the onus is on the property owner or estate agent to prove they are not.

In many cases documented by the REIV, tenants have outright refused to communicate with their agent or landlord and have provided no evidence of financial difficulty forcing them into a dispute hearing.  

Wilful non-payment of rent is a ground for eviction under the COVID-19 laws.

However, when VCAT does make an order against a tenant these orders are often held over until the end of the moratorium period, now extended to next year.

In cases where a court order is given, Victoria Police have a variable policy about executing these court orders.

This amounts to rent-free living with no accountability.

The Tribunal already has an unworkable backlog of over 3,500 cases and increasing daily.

Land tax 

Land tax concessions for property owners, while welcomed are insignificant when compared with the financial support available to tenants.

The land tax relief on residential land valued at $800,000 is less than $500 while tenants are entitled to $3,000 to help them pay their rent in addition to the rent reduction already offered by the landlord.

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