The NT Tenancies Legislation Amendment Act 2020 (Residential tenancies)

The following is intended to provide commentary and general information only in relation to this topic as at 27 April 2020. It is not legal advice.  Every effort is made to ensure the content is accurate; but no warranty is made as to the accuracy, currency or completeness of its content at any time.

What is it about? 

The (NT) Tenancies Legislation Amendment Act (TLAA) has commenced and the Minister will shortly issue “Modification Notices” (MN) that will prevail wherever the matters in the MN are inconsistent with the (NT) Residential Tenancies Act (RTA) and leases.

This is related to the public health emergency declared in March.  On 18 Mar 20, the Northern Territory (NT) Minister for Health under the (NT) Public and Environmental Health Act (PEHA) declared “a public health emergency for the whole of the Territory arising out of the serious public health risk from Novel coronavirus (COVID-19)” (Declaration).   The Declaration was extended for 5 days from 23 Mar 20.  On 27 Mar 20, after amending PEHA to allow for, the Declaration was extended for 90 days from 28 Mar 20 (ie to 26 Jun 20).  For further information about PEHA, please see RLA update on that.

The TLAA was passed by NT Parliament on Fri, 24 Apr 20 and received assent from the NT Administrator the same day.  It commenced 25 Apr 20.  The changes made by the TLAA will (temporarily) amend the RTA. These changes, discussed below, will only be in place for the duration of the Declaration.   However, the Minister also said this will be for the “duration of the COVID-19 emergency and the recovery phase.”

The TLAA:

  • sets the basis for the Minister deciding what to do about leases and occupancy arrangements but does not set out any details.  The details will be provided in the MN.
  • gives the Minister a considerable amount of power to make wide ranging changes to leases under the RTA and “occupancy arrangements” (an arrangement relating to occupying premises for residential purposes that the RTA does not cover).

Modification notices

The Minister is given broad power to do several things by MN, including suspending or modifying the RTA and regulations and to make provisions about the RTA and regulations including to make provisions where the RTA does not provide coverage.

MN’s will override inconsistent terms in the RTA and leases.  The MN can be backdated to 18 Mar 20 (when the Declaration took effect). Generally, arrangements, entered during the period of the Declaration will run their course after the period ends.

What do you need to know?  

Because of legal constraints in the Northern Territory (we are not a State and we are subject to an overarching law of the Australian government), the NT cannot “impose measures such as a moratorium on evictions, rent waivers and rent freezes.”

Having said this, whilst not banning evictions, rent waivers and rent freezes, it appears the TLAA will allow for something approaching that.  In case any Landlord believes the operation of the MN would “result in an acquisition of property from a person otherwise than on just terms” then the person can apply for compensation.

Matters the Minister may deal with in the MN

The Minister has said “there is no rent holiday mandated.  Rather it is up to the parties to agree something. The rent will need to be paid at a time agreed by both parties. This is a mechanism to support tenants who may be experiencing hardship.”

However, the MN can allow NTCAT to:

  • suspend an order for possession and determine the conditions on which such a suspension may be imposed and any time periods applicable to the suspension or the conditions of the suspension.
  • terminate a tenancy, with or without suspension of the order for possession.
  • refuse to terminate a tenancy.
  • create a new fixed term tenancy for up to 6 months with the same terms and conditions or any condition that could legally be agreed between the landlord and tenant (examples given by the legislation – reduction in the amount of rent payable; deferring the amount of rent payable, with or without forgiving an amount of interest accruing; adding or removing tenants from the tenancy).

As for hardship, the Minister may, by a modification notice, “make the alleviation of hardship the principal consideration in a tenancy dispute, including by changing provisions of this Act affecting a landlord’s right to obtain fair rent; or terminate a tenancy; and any other right of a party, or obligation on a party, arising as a result of a tenancy or occupation arrangement.”

The MN may specify:

  • the nature of the hardship to be alleviated.  The nature of the hardship may include financial or any other kind of hardship to either party.
  • different kinds of hardship for specified classes of persons, tenancies or occupation arrangements.
  • any evidentiary or procedural requirement for determining whether a party is suffering hardship or may suffer hardship.

The Minister has said how this would work is that hardship “will be defined as a reduction in income to a level where the proportion of rent payable by the person exceeds 30% of household income” and “the reduction in income was the direct or indirect result of the public health directions or emergency directions.”  The documentation to demonstrate hardship “could be something like a letter from their employer or providing bank statements to show that their income has reduced.” 

As for other matters:

The Minister may, in a modification notice, “add to, modify or suspend any provision of” the legislation “for, but not limited to, any of the following purposes:

  • determining matters that may, or may not, be listed on a tenancy database.
  • facilitating social distancing and other public health measures.
  • determining health and safety considerations for landlords, tenants and other persons who may visit premises.”

Offences

The TLAA also increasing some penalties by doubling them or increasing some tenfold.   These include contracting out of the RTA, falsifying rent records or requiring extra payments. New offences are created in relation to the following:

  • .  It is an offence to intentionally or recklessly “misrepresent the financial situation” of a party “in the course of negotiations” that “seek to adjust the terms of an arrangement for the occupation of premises for residential purposes” (maximum penalty $31,400 or imprisonment for 2 years).
  • n. Subject to certain exceptions (eg to seek legal advice, by agreement or for use in Court proceedings), it is an offence if someone “intentionally or recklessly discloses information about the other party’s financial situation or personal affairs that was obtained in the course of the negotiations” (maximum penalty $31,400 or imprisonment for 2 years).

Overall

In terms of guiding principles, on 24 Apr 20, the Minister said the TLAA was developed with the following in mind:

  • “parties are expected to keep meeting their tenancy obligations where possible, including by making best efforts to access government support, mortgage relief, and to transition businesses to alternative working arrangements, where this is possible”.
  • “where parties are struggling, they should at first attempt to negotiate to share the losses, with landlords strongly encouraged to reduce or defer rental obligations to assist tenants to get through the COVID-19 period without an unreasonable debt given the tenant’s capacity to repay.”
  • “where parties cannot agree, dispute resolution mechanisms take into account the COVID-19 situation, including – …the public interest in preventing homelessness and overcrowding particularly at this time, given the additional complexities involved in managing these issues and the burden this would place on the public health system during a pandemic”.
  • “it is appropriate to increase deterrents in relation to opportunistic, intimidating or dishonest behaviour that takes advantage of others as a result of the current need to renegotiate tenancy arrangements.”

For further information please get in touch with our lawyers at RLA

office@rousssoslegaladvisory.com
+61 8 8981 8783
GPO Box 457 Darwin Australia 080

We hope you enjoyed reading our update.  It is not a substitute for specific legal advice.  We would be pleased to assist you with your specific enquiry; in which case please contact us per the details above.   We cannot accept any liability or responsibility for loss occurring as a result of anyone acting or refraining from acting in reliance on any material contained in this summary.