Finance Property Why your rental contract should not be a prison sentence amid COVID-19

Why your rental contract should not be a prison sentence amid COVID-19

An alleged attack on a Sydney renter has highlighted the tensions between landlords and tenants amid COVID-19. Photo: Getty
Twitter Facebook Reddit Pinterest Email

Renters’ advocates say state governments must take further steps to enhance tenants’ rights in rental disputes, after a Sydney landlord allegedly held his tenant hostage for not paying rent.

NSW Police charged 56-year-old property owner Mario Vennuri and a male accomplice after they allegedly assaulted and held the 24-year-old tenant inside his rental property until he paid his outstanding rent.

Officers say the tenant was in arrears because of financial hardship due to COVID-19 and had negotiated a new rental payment plan with the landlord.

“It became very clear that the tenant was detained against his will and that led to the repayment of those funds,” Superintendent Tim Beattie told reporters on Friday.

“There are processes and mechanisms to retrieve the outstanding money but if they cross the line there will be certain consequences that go with it.”

Along with the other states and territories in March, NSW announced a six-month moratorium for evictions where tenants’ finances were affected by job losses or reduced income because of COVID-19.

Under NSW tenancy laws, landlords who have forced entry into their rental property without the tenant’s consent could face fines of up to $2200 in a NSW Civil and Administrative Tribunal hearing.

Tenants’ Union of NSW senior policy adviser Leo Patterson Ross told The New Daily the alleged attack was one of the “most egregious cases of landlord behaviour [he’s] heard during the COVID-19 crisis.”

And he said the case underscored the distorted power landlords have in rental negotiations.

“The problem is that with the power to evict, the threat it might happen can be enough to hamper tenants’ confidence in their legal rights,” Mr Patterson Ross said.

“This [alleged case] is not unfamiliar behaviour because landlords have a sense the property is theirs to control, and NSW does not have a regulation scheme that dictates which landlords should provide this essential service of housing.”

State-by-state guide on how to negotiate a rent dispute

Case highlights pressure on both parties

With property ownership the only barrier of entry to the rental market, the lack of a database tracking landlord behaviour and complaints reduces transparency for tenants hoping to enter a contract, Mr Patterson Ross said.

“The average tenancy contract in NSW is $20,000 a year, and can be as high as $40-50,000” he said.

“You wouldn’t enter into a contract with any other person who you didn’t know anything about their approach to their business, what they’ve been like to previous customers.

“And although NSW has a complaints register, you need to have 10 complaints in a month to get on that public list, so most landlords will not get on there as they don’t own 10 properties.”

Property Owners’ Association of NSW President John Gilmovich also slammed the Surry Hills landlord’s alleged behaviour, saying there are clearly defined guidelines that enable landlords to pursue outstanding rental debt.

Under the state’s new rental measures introduced at the height of the pandemic, tenants and landlords must first enter ‘good faith’ negotiations with an NSW Fair Trading mediator to come to a suitable new arrangement.

Failing that, landlords can then apply to NCAT for an eviction under ‘fair and reasonable’ circumstances.

However, Mr Gilmovich said the case highlighted how the state’s COVID-19 tenancy regulations have placed further pressure on landlords who are in financial distress.

“Previously, the process did not involve mediation where both parties would have to disclaim personal financial information, and the landlord could lodge an application for a hearing with NCAT and the process would be heard within two to three weeks,” Mr Gilmovich told The New Daily. 

“Now, landlords are in a financial pickle because they are also suffering and some are highly leveraged with their mortgages.

“Some may have been under some severe pressure and acted by taking the law into their own hands, because they’re not happy with the current arrangements that prolong the repossession process.”