April 2020 | Scott Freidman

Moratorium legislation is typically enacted in periods of civil unrest e.g. wars and recession. However, moratorium legislation can also be effective during periods of pandemic chaos.

The word ‘moratorium’ is defined as “a temporary prohibition of an activity”. In a legal context, ‘moratorium legislation’ effects a temporary suspension of certain laws until such time as the suspension becomes unnecessary or issues related to the suspension have been resolved.

The Federal Government has announced a six month moratorium on evictions applicable to households that have lost at least one quarter of their income. Other principles apply in relation to commercial premises.

Prior to the Federal Government’s announcement, the NSW Government passed the COVID-19 Legislation Amendment (Emergency Measures) Act, 2020. Other States and Territories have since followed suit. As a result of this legislation the NSW Parliament now has the power to pass legislation urgently, as and when needed, to protect the welfare of tenants under the Residential Tenancies Act 2010 (NSW). You can read more about the specifics of this legislation here.

But when was the last time Australia enacted moratorium legislation?

Throughout the 1930’s all State Governments enacted moratorium legislation to prevent home and farm foreclosures resulting from the Great Depression. In NSW, then Premier, Jack Lang (nicknamed “The Big Fella”), enacted the New South Wales Moratorium Act of 1930, which prevented all foreclosures until 1937. The explanation for this legislation was as follows: “It was not expedient in the national interest that the welfare and comfort of the community should be unnecessarily imperilled by allowing debtors to be crushed out of existence….”

Moratorium legislation was also enacted as a result of World War I when the Federal government passed the War Precautions Act, 1916 which prevented foreclosures until 1920. The Great Depression moratorium legislation was based on this legislation.

If you have any further questions about the specific application of the current moratorium legislation and the impacts it may have on your situation please contact Scott Freidman on 9231 2466 or sfreidman@hflawyers.com.au.