Can't Pay Rent This Month?
Several big announcements have been made in the last week, some of which affect landlords and renters, but details are still scarce. The lack of information has caused uncertainty for everyone involved, including the property managers who are attempting to assist them.
While we await further clarification and information from governments, here is a summary of what we now know.
Prime Minister Scott Morrison has announced a six-month nationwide moratorium on evictions of commercial and residential tenants who are experiencing financial hardship as a result of COVID-19. This is a comfort for tenants who will be able to maintain their roofs over their heads, but it is a major problem for landlords who rely on rental money to survive and, in some circumstances, pay mortgages.
However, it is not as simple as a nationwide prohibition. The six-month eviction moratorium will be enacted by each state and territory, and no one has yet provided details on how this will work.
To make matters even more complicated, Mr Morrison invited commercial and residential landlords and tenants to "sit down and chat" about how to proceed. This has caused problems for property managers, who are increasingly serving as mediators with minimal information.
Many tenants will be relieved, but this does not mean that their rental payments will be frozen.
If you don't think you'll be able to pay your rent because of employment circumstances, you should reach a reasonable compromise with your landlord.
Your property management and/or landlord will ask you to fill out a form that will allow them to determine what action has to be taken, whether it's a rent decrease, rental freeze, or payment delay.
If you have suffered a loss of income and need to discuss your tenancy, the following is the information you need to know.
Maintain an awareness of the many forms of financial assistance to which you may be entitled.
In addition, the federal government is investigating the possibility of providing financial support for rent, and it is cooperating with the provinces and territories to address concerns around residential tenancy.
However, the federal government has outlined a range of financial measures that renters may access in order to aid them while they wait for the new regulations to take effect. In the meanwhile, the Big Four banks are providing mortgage holders who are experiencing financial strain as a result of COVID-19 with loan holiday opportunities, and the Australian Banking Association has extended a helping hand to commercial landlords.
The Victorian government has not yet disclosed specifics on the implementation of the six-month eviction moratorium or whether or not renters will be eligible for financial aid as a result of the measure.
Premier Daniel Andrews of Victoria has stated that the state will put in place a prohibition on evictions for commercial and residential tenants alike for a period of six months, but he has stated that the specifics are still being worked out.
Do some research on possible sources of financial assistance that you could be eligible for before contacting the manager of the property you are renting from and pleading with your case.
In order to provide assistance to the people of Australia during this difficult period, the federal government has distributed multiple relief packages.
The most recent one is called the JobKeeper allowance, and it's a part of a stimulus package that's worth $130 billion. If you've been put on administrative leave because of the coronavirus, this payment of $1500 per two weeks might be enough to cover your rent for the duration of this time.
There is also an allowance for job seekers, assistance with rent payments, a supplement for people with coronavirus, and early access to your retirement savings.
Don’t just up and leave
Whatever you do, don't just walk out of your rental without taking the keys with you.
Unbelievably, some tenants have been quitting their rented properties, which has put both the landlord and the agency in an extremely precarious position. Not to mention the fact that running away will not be of any use to you in the long run.
Keep in mind that if you just up and leave your rental without giving any notice, not only will you forfeit your security deposit, but there is also a slim likelihood that your previous landlord will give you a referral the next time you need to rent a place.
There is a procedure that must be followed; therefore, if you are a tenant on a non-fixed term, which means you pay month to month, you must give a notice of 28 days, and if you need to move earlier than that because you are unable to pay for the full 28 days, you must inform both the agent and the landlord. They are then in a position to move up the date of availability and find a tenant more quickly. After then, the only rent payment you'll have to make it up to that point in time.
Maintaining open lines of communication with your landlord and property management should be considered the top priority.
Don’t muddy the waters
The property management will ask you to fill out a form, and within that form, they will search for evidence that you have genuinely lost your work and that there have been significant changes to your income. They will do this so that they can determine whether or not they will grant you a rent reduction.
Now is not the time to test your limits and see what you can get away with; you could end up making it impossible for other tenants who are in true need of assistance.
If you are in a position to make your rent payment on time, you should. Realize that on the opposite side of your rental agreement is a landlord who is probably attempting to pay off a mortgage and will carry the pain of your actions from the banks if you default on your rental payments.
You should also make an effort to reduce aspects of your lifestyle that might be eating into your funds at this period. According to Nokes, he has already been approached by tenants who have requested that their monthly rent be reduced by an amount equal to the cost of their subscription to Netflix and/or online exercise classes.
The government has the expectation that the cost of housing will come in second place, behind the cost of food and water. I know that you're at home and you don't have a lot to do, but if reducing your spending on luxuries is the only way for you to afford a place to stay, then that's what you have to do.
Be truthful, and keep your fingers crossed
When you phone your landlord, explain your predicament. Share with them the reasons you believe you will be unable to pay the rent on time or at all, as well as your thoughts on whether you will be able to continue living there or whether it would be better for the property management to look for new tenants.
If you have a history of being a responsible tenant at the rental property, there is a good probability that your landlord will stand up for you at this difficult time. You never know which landlords will be in a position to assist their tenants because some landlords are in better financial shape than others and will therefore be in a better position to do so.
Many property owners are coming to us and claiming that they, too, have been laid off from their employment. Therefore, even if this is their second property, if they have been laid off from their work, they are dependent on the income from that rental property.
Because of this, I believe that the most significant aspect of these requests to change the rent is that each and every one of them is evaluated on an individual basis. There is no formula that can be used to describe them.
Understand Your Landlord’s Situation
A good number of landlords have put in a lot of effort to save up enough money for a deposit so that they can buy a house, which they then rent out in order to pay off their mortgage. Some people count on the rent that their renters pay to pay off their debt. While some landlords are able to make a living off of other sources in addition to their rental income. The likelihood of your landlord being a gigantic magnate who has access to all of the wealth in the world is practically nonexistent.
Landlords who rely on rental incomes will be harmed, regardless of whether the measure in question is a moratorium on evictions, a cut in rent, or delayed payment.
Mortgage holders will continue to accrue interest, and there is a possibility that their monthly payments will increase after the pandemic is over, despite the fact that the "big four" banks and some other financial institutions are providing loan holidays to customers who are having difficulty making their mortgage payments.
On the other hand, property managers from all over the country report that a significant number of landlords are supporting their tenants ever since the epidemic broke out. This could be because banks have provided a safety net for them.
We need to cooperate with one another
Aside from the prohibition on evictions, it is currently unknown what other forms of help, if any, will be made available to landlords and tenants during this challenging period. Here is what we are aware of at this time.
Property managers are putting in extra hours acting as mediators between renters and landlords in order to assist them in coming to rental arrangements that will carry both parties through the upcoming few months.
When you phone your landlord, explain your predicament. Share with them the reasons you believe you will be unable to pay the rent on time or at all, as well as your thoughts on whether you will be able to continue living there or whether it would be better for the property management to look for new tenants.
If you have a history of being a responsible tenant at the rental property, there is a good probability that your landlord will stand up for you at this difficult time. You never know which landlords will be in a position to assist their tenants because some landlords are in better financial shape than others and will therefore be in a better position to do so.
At the end of the day, we are going through a difficult time, and we need to look out for one other's best interests. The objective is for everyone to make it out of this situation unscathed.