Australian Property News
NSW closes loophole to save landlord headaches
Posted on Friday, June 26 2009 at 11:27 AM
The New South Wales Opposition says it's helped identify a loophole in new legislation that could have created additional headaches for landlords who were already struggling to pay their mortgage.
The Rees Government has introduced legislation to establish a 'rent withholding' provision to take effect when a mortgagee obtained a court order for possession.
But Shadow Minister for Fair Trading Greg Aplin says the Opposition raised concerns over a loophole in the legislation.
"While the aim of the legislation was to assist tenants to have funds to cover the cost of moving premises following mortgagee repossession, a hole in the Bill's wording meant the rent holiday could stretch well beyond the intended 30 days," Apllin says.
"A landlord, already in dire financial straits, could be left standing off to the side watching helplessly while a malicious or poorly run mortgagee dithers with the property and its future sale, with no rent coming in to offset against interest."
"The practical solution the Rees Government overlooked was to limit the 'rent withholding' to 30 days."
Aplin says the Government has now amended its own Bill accordingly.
"This is great news for residential landlords but it's also a benefit for tenants caught up in a mortgagee sale," he says.
"You just know this is the type of financial mess which ends up dragging people into unnecessary legal proceedings because of its uncertainty. The amendment saves everyone from this nightmare."
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