Should I let my tenant reduce their rent?
Not without reason. Tenants need to prove hardship directly due to the COVID-19 crisis. A letter from their employer is a start. The government-declared moratorium on evictions is not a rental holiday. Ask your property manager for advice. We’re still waiting for the government’s rent relief package, and we would be reluctant to make any commitment before that comes through.
My tenant does face hardship and says they can’t pay the rent. I’m just a mum-and-dad investor, will the bank help me out?
If you’re a good customer, and all things being equal, then it’s likely your bank will have packages available to support you. Depending on who you bank with, you may be able to delay your repayments for six months. However, a word of caution for both you and your tenant: delaying rent and repayment leaves you both with a big bill at the end of the six months. Property managers will suggest you both keep at least a percentage of rent and repayment flowing to avoid significant financial hardship at the end of the crisis.
My tenant is pleading hardship. How do I get them to prove that?
A letter from their employer is the first step. Ask your property manager to work with the tenant to ensure the tenant is taking advantage of the various government programs and payment increases available to them. This is the best chance to keep rent rolling in. Some people are doing it tough, so be flexible and understanding.
Will landlord insurance cover me in this crisis?
That depends on the coverage you’ve paid for. You should seek advice from your broker or insurance company. Be sure to ask them if there are any actions – such as agreeing to a rent reduction for the tenant – that might compromise the terms of your insurance and, therefore, the benefits you would receive from it.
Do I still need to pay expenses on a property if the rent stops coming in?
Yes. Expenses such as rates, water, insurance, repairs etc. need to be paid by you unless the lease agreement says otherwise.
Is the government going to reduce land tax or rates to help landlords?
This has been discussed at state level but no action has been taken to date, possibly because state governments are also seeing stamp duty revenues dry up at this time. If you have a tenant who’s stopped paying rates, then alterations to the tax system are not going to ease the problem in the short or even medium term. Talk to your property manager if you need to negotiate with your tenant.
I own an apartment and the rent is an essential part of my income, as I’m a retiree. The tenant says they can’t pay, even with these government programs available, such as JobSeeker. What do I do?
The government has made it clear this crisis is not an opportunity to avoid rent. If a tenant has the means, they should pay. We’ve seen cases of tenants seeking relief because their job is “uncertain”. That is not a reason to reduce their rent or to allow them to stop paying it. While the JobSeeker allowance has doubled to $1500, don’t assume they qualify. Ask your property manager to work with the tenant to substantiate hardship. It’s reasonable to ask for a letter from their employer to substantiate hardship. From there, the expectation at government level is that you and the tenant will find an equitable solution. If not, seek legal advice. Be aware that while all states have agreed on a moratorium for evictions.
I’m worried about the state of my property. Can I organise an inspection?
Yes. The tenant should be absent at the time of inspection. If you want to see the property yourself, consider asking the property manager to use inspection software (there are lots of platforms available) or even Facetime or Skype to show you the property via a video call. Social distancing will limit the number of people being allowed in a property at the same time in this situation.
I want to sell, can people view my property?
Yes. The moratorium on open houses is over but no more than 10 people can be in a property at the same time. Be aware, the tenant has the right to limit the number of inspections in situations where they must vacate. Talk to your agent about creating virtual tours and videos to minimise disruption. Right now, prospective buyers are qualifying properties more thoroughly before they agree to a walkthrough. Without video of your property, you may miss out on potential buyers.
Can I issue a notice to vacate for reasons other than an eviction?
Eviction is tricky. This amounts to the same outcome for the tenant. The real estate industry is awaiting guidance from the government on this, as it relates to the declared moratorium on evictions. While you may have a legitimate reason to issue a notice, the current situation may force you to put your plans on hold. That said, if you issue the notice before any legislation is enacted, it will likely be enforceable but could be disputed, possibly making this a costly and time-consuming legal exercise. Ask your property manager for advice and, despite the inconvenience, consider being a good landlord in this crisis.