Guidelines for rent repayment agreements under the Residential Tenancies (COVID-19 Response) Act 2020

On 23 April 2020, the Parliament of Western Australia passed the Residential Tenancies (COVID-19 Response) Act 2020 (the Act) to guide residential tenancies and accommodation agreements (for boarders and lodgers) during the COVID-19 coronavirus pandemic.

The Act allows tenants[1] and landlords[2] to enter into rent repayment agreements[3] where the tenant has not paid rent (or has paid reduced rent) during the emergency period[4] (from 30 March 2020 – 29 September 2020), and stops landlords giving rent default notices without first entering an agreement for reduced rent.

The State Government is also making available $30 million for grants of up to $2,000 for Western Australian private residential tenants who lost their jobs on or after 20 March 2020 and are facing financial hardship due to COVID-19.

To be eligible for the Residential Rent Relief Grant you need to lodge a revised agreement for reduced rent with Consumer Protection as part of your application, or if you have been unable to negotiate a reduction, you will need to apply for and engage in Consumer Protection's conciliation service.

In the first instance though, you should try to negotiate an agreement yourself and this information is designed to help you have a conversation about key issues that you may wish to include when negotiating a rent repayment agreement.

Please note:

The following is a guide only, feel free to draw up your own arrangement as there’s no set form for rent repayment agreements.

Tenants and landlords do not have to enter into a formal arrangement as the provisions of the Act still apply to unpaid rent, whether parties have something in writing or not.

It’s important that both tenants and landlords read information about the Act before drawing up an agreement as it determines some terms, an example being that a landlord cannot claim interest on a tenant’s unpaid rent.

Do tenants have to keep paying rent?

Yes, a tenant has to keep paying rent. The six-month moratorium on evictions is not a reason for tenants to not pay rent as:

  • Rent will continue to accumulate, so if a tenant doesn’t pay now, payment of all the rent arrears will have to be made later; and
  • The Act prohibits landlords from evicting a tenant who can’t pay rent due to financial hardship caused by COVID-19; however this is only during the emergency period.

If tenants are not affected by the COVID-19  but refuse to pay rent, and where mandatory conciliation confirms that COVID-19 has not impacted them financially then an owner may issue a remedial notice and subsequently apply to the Court or the State Administrative Tribunal for an order to terminate a tenancy. Call Consumer Protection for more information.

As hard as it may be, it is recommended that tenants continue to pay their rent – as much as they can, when they can.

Do I have to enter a rent repayment agreement?

Landlords and tenants are not required to enter a rent repayment agreement, but if there is not one in place landlords cannot issue breach notices for non-payment of rent and tenants will not have met one of the criteria to be eligible for the Residential Rent Relief Grant Scheme.  

These agreements will help preserve the tenancy and make clear the arrangements for what rent can be paid and whether a waiver and/or deferral can apply.

Do landlords have to agree to a rent reduction as part of a rent repayment agreement?

No, landlords don’t need to reduce rent repayments however they should strongly consider this option if they are able to as it may be in their best interests to do so.  If a tenant can no longer afford rent they have an option to break the lease.

What information do I need in my rent repayment agreement?

1. It is recommended that all agreements should contain the minimum basic information:

  • Date of agreement
  • Name of the landlord/s and the tenant/s
  • Property address
  • Reference to the original residential tenancy / accommodation agreement

2. Rent repayment agreements:

  • The Act allows the landlord and tenant to enter into a rent repayment agreement, and while it has to be in writing, they can negotiate their own terms.
  • The purpose of the document is to set out the agreed arrangements when a tenant is unable to pay some or all of the rent during the emergency period.  Landlords are encouraged to be generous where they can. 
  • It is important to be clear about intentions, such as whether rent will be waived for a period (not expected to be paid back) or if it will be deferred (expected to be paid back) or some combination. 
  • We encourage honest and open discussion of options.  Suggestions include:
    • The landlord agrees to the tenant not repaying the accumulated rent debt, called a “waiver”, for some or all of the period.
    • The landlord agrees to the tenant only paying some of the accumulated rent debt, but more if they are able to, called “a conditional waiver”. 
    • The landlord agrees to the tenant paying a reduced rent for a period of time and deferring payment of the remaining rent until after the emergency period and putting in place a repayment plan that’s manageable.
  • Consider how long the tenant needs rent relief and include this variation period:
    • By a start and end date;
    • By a set number of rent payments - weeks, fortnights or months; or
    • For the emergency period.
  • The parties may agree that, after the emergency or variation period has ended, the tenant’s usual rent payments will start again.
  • The landlord and tenant can decide together the timeframe for repaying outstanding rent.  The agreement should clearly set out:
    • Whether the payments are on top of, or include the tenant’s usual rent; and
    • Whether the outstanding rent repayment is made with the usual rent payments, or at another time.
  • Finally, the parties may include terms like:
    • The tenant can choose to make payments over and above the minimum required to pay the debt off sooner; or
    • If the agreement is terminated – the tenant’s outstanding debt must be repaid.

NOTE: If you are an applicant or recipient of the Residential Rent Relief Grant Scheme the rent repayment agreement should also show how the grant money given to the landlord is being passed on to the tenant either through an agreed period of reduced rent with the grant not expected to be repaid or where any accumulated rent debt is reduced by the grant amount.

What terms cannot be included?

  • Landlords can’t ask tenants to pay interest on rent not paid during the emergency period.
  • Parties cannot agree to rent increases during the emergency period – except to return the amount to the original rent payable in the agreement.

If you need help

If you are unsuccessful in negotiating an agreement and need help, call Consumer Protection for assistance on 1300 304 054.

Disclaimer

The material in this guide is provided for general information only and does not constitute legal or financial advice or financial advice. It is not intended to replace consultation with a qualified professional and you should seek legal advice in regards to your specific situation.


[1] In this guide the term tenant means tenants in private rental homes, long-stay residents in residential parks, and boarders and lodgers.

[2] In this guide the term landlord means lessors, property managers, owners, park operators, and providers of boarding and lodging accommodation.

[3] A rent repayment agreement is defined in the Act as an agreement made between landlord and tenant about rent not paid by the tenant during the emergency period, and how that rent will be repaid.

[4] The emergency period is defined in s.4 of the Act as a six-month period commencing on 30 March 2020 and ending on 29 September 2020.  This initial six-month period may be extended.

 

Consumer Protection
Guide / handbook
Last updated 07 May 2020

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