Victorian real estate body tells landlords, agents to 'refuse rent reductions'

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on September 08, 2020
Victorian real estate body tells landlords, agents to 'refuse rent reductions'

Photo by Priscilla Du Preez on Unsplash

The Real Estate Institute of Victoria has advised members to refuse rent reductions in protest of the Victorian Government's latest inspection shutdowns.

The Victorian Government's recently released roadmap out of restrictions doesn't include the return of physical house inspections until 26 October at the earliest. 

This, combined with the state Government's decision to extend to the eviction moratorium for tenants for a further six months, has caused the Real Estate Institute of Victoria (REIV) to slam the government's "genuine lack of consultation with business". 

"The real estate sector has been delivered a ‘double-whammy’ with the extension of the rental moratorium for a further six months. While this was not unexpected landlords have virtually no relief while tenants get substantial support," REIV said in a statement. 

"With many reduced rental agreements due for re-negotiation this month, the REIV is advising its members to refuse to negotiate rent reductions, forcing every request into the dispute system, a system that has already failed to cope with the caseload. 

"A survey of property managers conducted by the REIV shows that about three quarters of reduced rent agreements have been achieved outside of the dispute system. With a backlog of over 4,000 cases, VCAT is not equipped to resolve disputes."

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The REIV criticised the Victorian Government for allowing tenants who haven't suffered from COVID-19 to profit in order to protect the most vulnerable of tenants. 

The REIV has therefore called on the government to allow one-on-one private appointments to proceed. 

"Without inspections, buying and leasing cannot proceed, keeping many people out of appropriate shelter and pushing many vendors and investors to the brink."

[Read: Coronavirus support for landlords

REIV CEO calls moratorium extension "demagogue decision"

REIV CEO Gil King warned, "let's see how the system copes without our cooperation". 

“We have seen and continue to see illegal rent-strikes with no consequences. Until balance and commonsense is restored we will embark on a moratorium-strike," he said. 

“This demagogue decision to extend the moratorium means that for a whole year, landlords will be dictated as to how much rent they can charge removing their right to make fundamental decisions about their own property.”

REIV President Ms Leah Calnan said the Government is turning a blind eye to the significance of a property decision in people's lives. 

“The delay in allowing private inspections means that many people will be unable to make the move they so desperately have to make or commit to a property without seeing it first. That is unacceptable.”
 
“It is the government’s responsibility to protect tenants and yet they have abdicated this responsibility and pushed it onto private citizens and created a system that does not work.”

Some support for both landlords and tenants has been extended into the new year, however. 

Tenants paying 30% or more of their income in rent can still access a relief grant up to $3,000, a $1,000 increase from the previous level that gets paid to the landlord.  

On Friday, the Victorian Treasurer Tim Pallas announced that land tax relief for landlords would also be extended into 2021. 

If a landlord provides tenants impacted by coronavirus with rent relief, the landlord will be eligible for a 25% discount on land taxes.

Rent reductions are still not covered by landlord insurance, however. 

Tenants Victoria "disappointed"

CEO of Tenants Victoria Jennifer Beveridge said on Twitter she was "really disappointed” with REIV's decision to encourage members to refuse rent reductions. 

Of the tenants who lost income due to coronavirus restrictions, 50% asked for a rent reduction but only 9% received a satisfactory rent reduction

“The scheme we have in Victoria to seek a rent reduction relies on what is known as 'good faith' negotiations, that's a fair-go system to assist both renters and landlords amid the huge challenge we are facing as a community from COVID-19,” Ms Beveridge said.

“At a time when all of us are being told to stay at home, renters who've lost income and jobs are doing it really tough and those who've lost income and jobs need support."

She also praised the Victorian Government's decision to extend rental protections, according to SBS. 

“Victoria’s renters will breathe a sigh of collective relief that they will continue to be protected from evictions if they fall behind on rent," she said. 

"For thousands of renters, this is the first time they have faced such hardship.”

[Read: How to properly ask for a rent reduction during COVID-19]

Advice may breach regulations 

According to Consumer Action Law Centre CEO Gerard Brody, REIV's advice to refuse rent reductions may not be legal. 

"Victorian professional conduct regulations for real estate agents require them to 'make every effort to minimise and resolve complaints and disputes'," Mr Brody told Savings.com.au. 

"If agents follow the advice of the REIV, they may find themselves in breach of the law."

Applicable penalties can be found via Consumer Affairs Victoria


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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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