April 6, 2020.

Paying the bills can be a major concern during a crisis and it begs the question, what happens if you can’t pay your rent?

The federal government has made moves that will hopefully provide some relief for many tenants in the commercial AND residential sector, by preventing landlords from evicting tenants over the next few months.

It has to be stated clearly that no state or territory, at the time of writing, has officially enacted legislation providing for a moratorium on evictions or rental repayments. Tenants must still meet their contractual obligations to pay their landlord.

The National Cabinet, made up of members from the federal cabinet and state & territory leaders, announced an eviction moratorium on March 29. Rental law is governed by the states and territories, so the federal government is encouraging states to act swiftly to legislate for a commercial and residential eviction moratorium.

Prime Minister Scott Morrison emphasised that a moratorium on evictions “doesn’t mean there’s a moratorium on rents”. The federal government is relying on states to enact legislation, with the Prime Minister stating that the focus of the National Cabinet is on commercial leases and that they are working on a mandatory code between landlords and tenants with a focus on not being “prescriptive” about arrangements.

He said, “We are in this together. Sit down with your tenant who has been paying you rent, working in their business week after week after week. Respect each other’s livelihoods and support each other’s livelihoods whenever you can. This is going to be a tough time. Whether you’re a tenant, and I know landlords will feel it as well.”

“It is not about picking sides but making sure Australians work together to solve a problem that they share together.”

NSW Parliament emergency legislation

The NSW Parliament passed an emergency amendment which allows the government to introduce legislation that will prohibit landlords from exercising their right to terminate a retail or residential lease in NSW or take a range of other actions that would be detrimental to the tenant, in order to address the emergency caused by COVID-19.

It’s critical to understand that, “at this point in time, the Act only grants power to introduce new regulations and it is not law”, says Nikki Robinson, Partner of full-service commercial law firm, Clayton Utz.  

“Landlords will need to carefully consider these changes, once implemented, to ensure that they do not seek to enforce contractual rights that they have which have been overridden by these changes while they are in operation.”

Mark Bouris said these current times put pressure not only on the tenant, but also the landlord because “the last thing I want to do, as a landlord, is try and find a new tenant”.

He told Sky News host Peta Credlin that the “two entities, the landlord and the tenant, need to come together and work out a deal.”

For a detailed summary of the NSW amendments, visit Clayton Utz here.

What happens if you stop paying your rent?

If you stop making your repayments, your debt will continue to accrue and once the eviction moratorium is over, you will be facing an eviction notice.

Mark Giancaspro and David Brown writing for The Conversation said: “Your landlord will have the right to keep your bond to cover the rent. If you owe more, they can chase it up through debt collectors or file court proceedings. If this happens, your personal credit rating could take a hit, and costs may be added to any judgment against you.”

The general consensus, from the government through to Mark Bouris is that the best approach is a pro-active conversation with your landlord to figure out a suitable solution for both parties. 

Giancaspro and Brown said, “Try to work out an arrangement both sides can live with. Remember, many private landlords rely on rent to pay the mortgage. Even with the major banks offering mortgage relief during the coronavirus crisis, the interest on that debt will keep accruing.” 

Queensland Rental grant

Queensland is offering some form of rental assistance as a result of the Coronavirus – a one-off $2000 grant paid directly to your lessor, for eligible people. The Queensland Government said, “This grant is only available to Queenslanders who need it the most and have exhausted all other options.”

“The COVID-19 Rental Grant is a one-off payment of up to 4 weeks rent (maximum of $2000) available to those affected by the COVID-19 pandemic who do not have access to other financial assistance.”

There are criteria for eligibility, including a loss of job due to the pandemic, proof you’ve exhausted all options including having discussed with your landlord and you must have applied to Centrelink for income support. 

Tasmania  Rental grant

The Tasmanian Government announced an immediate halt to termination by notices to vacate. It is a four-month ban on evictions.


Mark Giancaspro and David Brown stated that, “the Tasmanian legislation prohibits commercial and residential landlords from serving notice to vacate for rent arrears for the duration of the “emergency period”, except for certain instances:

  • the lease is non-fixed term and property is being sold (with notice being served before April 3)
  • the Residential Tenancy Commissioner orders termination because of “severe hardship” to either party.”

Any notice to vacate issued by an owner to a tenant is of no effect until 30 June 2020.’

More to come. 

Mentored communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication.