Welcome to the first edition of our weekly legislation update which aims to provide information on new and upcoming legislation (and/or bills) as they pass, primarily focused on legislation arising as a counter-measure to COVID-19.
20 to 24 April 2020
The week started with the Residential Tenancies (COVID-19 response) Bill 2020 and Commercial Tenancies (COVID-19 response) Bill 2020 being passed by both houses (20 April 2020). The Commercial Tenancies (COVID-19 response (early termination)) Bill 2020 was also passed in the Legislative Assembly on 20 April 2020.
Residential Tenancies Bill: An Overview
As we know, the National Cabinet announced a moratorium on evictions in response to COVID-19 on 29 March in an attempt to facilitate a reduced risk of eviction of tenants during a time when we are supposed to be snuggled up at home. The Residential Tenancies Bill has been implemented to give effect to that as well as providing other forms of relief for tenants, regulating residential tenancy agreements, long-stay agreements in residential parks and the accommodation agreements for boarders and lodgers. The Bill will apply only for so long as we remain within the ‘emergency period’ which has been initially set at 6 months. The emergency period began on 30 March 2020. Notably, this new bill introduces:
- Clause 8 – rent not to increase during the emergency period (including notices given after 30 March and before the passing of the bill)
- Clause 11: Owner not required to maintain and repair under tenancy agreement if unable to do so during the emergency period (where doing so would cause financial hardship)
- Clause 14 – giving default notices under tenancy acts for failure to pay rent during the emergency period (owners cannot issue rent default notices unless a rent repayment agreement has been entered into and defaulted (or due to the Commissioner making a decision re: conciliation)
- Clause 18 – Termination of tenancy agreements arising out of family violence (tenant can still terminate tenant’s interest by notice where there has been family violence)
- Clause 19 – A tenant may terminate a fixed-term lease early (where the notice of termination is given not less than 21 days before the day on which the agreement ends) and the owner is not entitled to compensation for loss (including loss of rent)
- Clause 20 – An owner cannot otherwise terminate a residential tenancy agreement unless:
- A lessor has entered into a contract of sale of the property – in which they can give notice (but there must be more than 30 days notice prior to possession) (s63 residential tenancy act)
- Where the agreement is frustrated – ie where the premises are destroyed (s69 residential tenancy act)
- Where the tenant abandons the premises (s60(1)(f) RT Act)
- Where vacant possession is delivered up pursuant to a written agreement (s60(1)(g) RT Act
- Every owner dies (s60(1)(i) RT Act.
- Clause 13 – repossession of property during the emergency period (where property is repossessed by someone whose title is superior to the owners, the tenancy continues and the mortgagee or other person becomes the landlord)
- New dispute resolution processes.
For more information on the Bill, you can find a copy of it and the EM presented to the legislative council here: https://www.parliament.wa.gov.au/Parliament/Bills.nsf/A727F5F4D108F1434825854C000F9512/$File/187-1.pdf and
Commercial Tenancies (COVID-19 response) Bill 2020
The Commercial Tenancies (COVID-19 response) Bill 2020 will introduce a range of measures to provide for urgent relief for commercial tenants – these measures largely aimed towards ameliorating the harsh conditions faced by small businesses, by providing certain allowances such as:
- A 6-month moratorium on termination for certain breaches
- A freeze on rent increases
- A prohibition on landlords charging interest on rent in arrears
- Dispute resolution mechanisms.
You can find the bill here: https://www.parliament.wa.gov.au/Parliament/Bills.nsf/ED7097E743C7BC2D4825854C00102B97/$File/186-1.pdf
And EM here:
Commercial Tenancies (early termination) Bill
Just quickly, the Commercial Tenancies (early termination) Bill will confer a right on tenants in severe financial distress caused by COVID-19 to terminate certain commercial leases. The usual ‘break lease costs’ will not apply. The financial hardship must be accompanied by reasonable endeavours to negotiate deferrals or concessions of rent with the landlord. See the Bill presented to and agreed to by the Legislative Assembly here: https://www.parliament.wa.gov.au/Parliament/Bills.nsf/7CDCFDA8EE2BA09C4825854C00139362/$File/188-1.pdf
Financial Sector Reform Act
Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2019 Measures)) Act 2020 (Financial Sector Reform Act), which received royal assent on 17 February 2020. This will take effect from 5 April 2021. This new Act will amend Section 15 of the Insurance Contracts Act 1984 (Cth) to clarify that all contracts of insurance subject to that Act will also be subject to the UCT laws (this will of course include such things as car insurance, travel insurance etc) provided they are standard form contracts that are either consumer contracts or small business contracts. Contracts subject to the ICA will only fall within the purview of the UCT regime if entered into on or after 5 April 2021 so we have a bit of time before we start to see the effects (and potential fall-out…) from these changes.
The Financial Sector Reform Act will also introduce new provisions into the ASIC Act specifically addressing contracts subject to the ICA. Some of the effects of these provisions are to:
- Prevent terms from being unfair if they set the amount of the excess or deductible, provided the term is ‘transparent’ and disclosed before the contract is entered into.
- A term will be prevented from being unfair to the extent that it describes the ‘main subject matter of the contract’ (with ‘main subject matter’ being defined narrowly to include a description of ‘what is being insured’).
- Enable ‘third party beneficiaries’, as well as the parties to the insurance contract, to challenge an allegedly unfair term
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How can HHG Legal Group assist?
For over 100 years HHG Legal Group has been proudly serving Western Australian families, businesses, governments and individuals and never before has the State seen such a crippling time and we are committed to supporting the communities in which we operate.
Do you require any advice or representation but have been financially affected by the pandemic’s lockdown measure, or are you a worker on CV’s frontline*? HHG Legal Group is committed to helping those in need and those who are looking after the community too and are offering community fee assistance to these two groups. You can send us an enquiry via our online form or call 1800 609 945.
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