How the New Residential Tenancy Regulation may Affect Sales and Purchases

By 30 April 2020Property
Property Law

The Queensland Government has recently passed the Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Regulation (“the Regulation”) which is designed to provide additional protections to landlords and tenants during the COVID-19 emergency response period (which is currently due to expire on 31 December 2020).

The Regulation overrides a number the provisions of the Residential Tenancies and Rooming Accommodation Act 2008 (to the extent of any inconsistency) while it remains in force – including (among other things):

  • providing that a landlord can’t (between 29/3/20 and 29/9/20) terminate a tenancy agreement due to the tenant’s failure to pay rent if the tenant couldn’t pay the rent as it was suffering excessive hardship because of the COVID-19 emergency;
  • extending existing fixed term agreements that were due to end on or before 29/9/20  to 30/9/20 if the tenant is suffering from excessive hardship because of the COVID-19 emergency;
  • allowing a tenant to apply to the Tribunal to terminate the agreement if they are suffering excessive hardship because of the COVID-19 emergency and haven’t been able to reach a conciliation agreement with the landlord;
  • allowing a tenant to terminate their tenancy agreement if they believe that they can’t safely occupy the premises because of domestic violence;
  • providing that a landlord can’t give a notice to leave without grounds if the tenant is suffering excessive hardship because of the COVID-19 emergency;
  • limiting the landlord’s ability to claim reletting costs from the tenant;
  • limiting the landlord’s ability to recover unpaid rent if the tenant is suffering excessive hardship because of the COVID-19 emergency; and
  • limiting the landlord’s ability to enter the premises (e.g. to inspect and show it to prospective buyers and tenants) if it, or any person in the premises, is subject to a quarantine direction, anyone staying in the premises is a vulnerable person or if entry would contravene a public health direction.

Note that the above is not an exhaustive list of the amendments provided for in the Regulation and you should refer to our “New Emergency Residential Tenancy Provisions Due to COVID-19 Emergency” article on our website for more details on the amended provisions.

The Regulation will not only affect the dealings between landlords and tenants, but may also affect residential sales and purchases. For example:

  • the above moratorium on evictions, extension of fixed term agreements, increased ability for tenants to terminate, reduced ability for a landlords to claim reletting costs and restrictions on addressing unpaid rent may result in buyers being less inclined to purchase tenanted properties as investments;
  • the limits on landlord’s right to inspect may make it more difficult for them to market and sell the property;
  • the limits on inspections may also make it more difficult for buyers to undertake any inspections it may require; and
  • the moratorium on evictions, extension of fixed term agreements and restrictions on termination due to unpaid rent may affect:
    • ​the seller’s ability to provide a buyer with vacant possession; and
    • the buyer’s ability to claim some duty concessions (e.g. principal place of residence and first home concessions).

Please feel free to contact our Toowoomba lawyers team if you have any queries in relation to the new residential tenancy provisions and how they may affect your property or any possible sale or purchase.

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