Landlords are reluctant to sign up to the ACT government's rent reduction scheme amid concerns it might affect their insurance coverage, an assembly inquiry has heard.
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Fewer that 100 landlords have applied for a land tax rebate after agreeing to reduce rent for tenants struggling amid the coronavirus-induced economic crisis.
The Legislative Assembly committee inquiring into the Barr government's response to the COVID-19 pandemic turned its attention to the property sector on Thursday, hearing evidence via video-link from groups representing renters, real estate agents, property owners and legal advocates.
The economic downturn triggered by the pandemic has had immediate implications for many residential and commercial tenants and landlords, as well as homeowners and businesses.
The committee heard claims that a small number of residential tenants had been threatened with eviction, and the prospect of homelessness, if they didn't pay rent.
One advocacy group claimed that landlords had asked tenants whether they had cancelled their Netflix subscription before approaching them for help.
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The ACT government's two coronavirus support packages have included a range of measures to support those hardest hit by the downturn, including temporary rates and payroll tax relief, as well as financial incentives for landlords to pass on rent relief to struggling tenants.
Under one measure, residential landlords are eligible for land tax rebates if they agree to reduce their tenant's rent by at least 25 per cent for six months.
However, the rebate would not be equal to the rent reduction, with landlords only able to access the maximum $100 per week rebate if they reduce their tenants rent by $200 per week.
The Real Estate Institute of the ACT last month raised concerns about the scheme, which prompted an angry rebuke from Chief Minister Andrew Barr.
Speaking at Thursday's hearing, the institute's chief executive, Michelle Tynan, said there was "not a lot" of interest from landlords in signing up to scheme.
That was because the process of reducing rent, rather than allowing payments to be deferred, would trigger a change to the terms of a rental agreement.
"The implications of that are that it affects their landlords insurance," she said.
"As soon as landlords enter into a reduction in rent, the insurance policy is deemed not to cover that. There are issues as whether it is viable for landlords to actually take up that scheme."
The ACT Revenue Office had received 96 applications from landlords as of Wednesday, April 22. The applications were still being processed as of midday on Thursday.
Ms Tynan stressed that real estate agents weren't permitted to provide guidance to landlords on the matter, as it was deemed financial advice.
Among them was the framework for a moratorium on the evictions of tenants who cannot pay rent because of the downturn. While the government has committed to six-month moratorium, at this stage the protection is only in place until July 22.
The regulations only guarantee protection for "impacted" households, which are defined as those which have experienced at least a 25 per cent reduction in weekly gross income, or have become eligible for their JobSeeker or JobKeeper, as a result of the shutdown.
At Thursday's hearing, Joel Dignam, the executive director at renter advocacy group Better Renting, said the "specificity" of the rules were "somewhat concerning".
Opposition leader and committee chair Alistair Coe pressed Mr Dignam on what types of information could reasonably be sought by landlords to determine whether or not their tenant's claim for rent relief was valid.
In response, Mr Dignam said it was reasonable for landlords to ask tenants for proof of loss of income, such as a letter a termination from their employer. Renters can also provide copies of work rosters or bank statements, under the government's rules.
But Mr Dignam said some landlords were demanding far more than what the government required, seemingly in an attempt to discourage tenants for seeking rent relief.
"It seems reasonable that some verification is asked for, but it doesn't need to be bank statements going back to the first of January," he said.
"We've also heard tenants being asked; 'let us know your expenses, and have you cancelled your Netflix subscription - that is quite a common one.
"We think that is quite a patronising approach."
Representatives from Legal Aid, which now runs the territory's tenancy advice service, was asked whether it was aware of cases in which landlords had threatened tenants after they requested rental assistance.
Lawyer Brice Hamack said it had received a "handful" of complaints from tenants who had been threatened with eviction, and the prospect of homelessness, if they couldn't pay rent.
He didn't single out individuals or companies, but said behavior was more common among private landlords.
In a statement to The Canberra Times, Mr Ramsay asked all parties to work together to resolve financial disputes which arose during the downturn.
"There is no simple or easy fix to the problem we are facing, but we all should act reasonably and in good faith to determine the best path forward," he said.
"If you're a tenant or a landlord navigating this moratorium, I'm asking you to be helpful and reasonable, peoples lives have been seriously impacted by this virus, now is not the time to be trying to make a quick buck.".
Meanwhile, representatives from the videoconferencing application Zoom has responded to the ACT government claims that the program has "numerous" cyber-security flaws.
Government ministers and public servants are refusing to appear via the camera function of the application, choosing instead to give evidence to the parliamentary inquiry by dialing into the virtual meeting on a telephone.
In a statement, a Zoom spokeswoman said as of April 8, it had changed its default meeting settings to address security concerns.
"Zoom has been confidently selected for complete deployment by a large number of institutions globally, following security reviews of our user, network and datacenter layers," the statement read.
"We are working with the relevant federal, state and territory government bodies in Australia to provide these recommended security settings, to ensure these are implemented consistently to ensure a safe and secure environment."
- For information on COVID-19, please go to the ACT Health website or the federal Health Department's website.
- You can also call the Coronavirus Health Information Line on 1800 020 080
- If you have serious symptoms, such as difficulty breathing, call Triple Zero (000)
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Dan Jervis-Bardy
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
