mother with baby stressed by finances

COVID19 – A Renters Guide on Negotiating with Their Landlord

Can't Pay Rent This Month?

There have been several major announcements in the past week, some of which impact landlords and renters – but the details remain sparse. The lack of information has created confusion for all those concerned, including the property managers who are trying to help them. 

While we wait for further clarification and information from governments, here’s a wrap of what we know so far.

Prime Minister Scott Morrison has announced a nationwide six-month ban on evictions of commercial and residential tenants who are struggling financially because of COVID-19. This is a welcome relief for renters who will keep a roof over their heads, but a huge concern for landlords who rely on rental incomes to live, and in some cases, pay mortgages.

But it’s not as simple as a nationwide blanket ban. The six-month moratorium on evictions will be legislated under each state and territory jurisdiction, and so far, none of them has provided details on how this will play out.

To complicate things further, Mr Morrison encouraged commercial and residential landlords and tenants to “sit down and talk” about how to move forward. This has created a headache for property managers who are now acting as mediators, equipped with very little information.

This comes as a relief for many tenants, but it doesn’t mean there will be a freeze on their rental payments.

If you don’t think you’ll be able to pay rent due to your circumstances at work, then you need to come to a reasonable agreement with your landlord.

Your property manager and/or landlord will ask you to fill out a form, which will allow them to make an assessment of what action needs to take place, whether it’s a rent reduction, rental freeze or deferral of payment.

hands exchanging house and money

Here’s what you need to know if you need to negotiate your tenancy due to loss of income.

  1. Stay informed about what financial aid you’re entitled to

The government is also looking at rental assistance payments and working with the states and territories when it comes to residential tenancy issues.

The federal government has, however, announced a series of financial measures that renters could tap in to assist them in the interim. Meantime, the Big Four banks are offering loan holidays to mortgage holders under financial stress because of COVID-19, and the Australian Banking Association has thrown commercial landlords a lifeline.

The Victorian government is yet to release details on how it will roll out the six-month moratorium on evictions, or whether it will provide financial assistance to renters.

Victorian Premier Daniel Andrews said the state would implement the six-month ban on evictions for both commercial and residential tenants, but said the details are still being finalised.

Before you call up your property manager and plead your case, research what financial aid you could be entitled to.

There have been several relief packages released by the Federal government to help Australians during this time.

The most recent is the JobKeeper allowance, which is part of a $130 billion stimulus package. This fortnightly payment of $1500 could be enough to cover your rent throughout this time if you’ve been stood down due to the coronavirus.

There’s also a JobSeeker allowance, Rent Assistance, a Coronavirus Supplement and early access to your superannuation.

investment growth with coins with house

Don’t just up and leave

Whatever you do – don’t just leave your keys in your rental and go.

Unbelievably, some tenants have been abandoning their rentals, leaving the landlord and agent in a very dire situation. Not to mention, fleeing is not going to help you in the long run.

Keep in mind that if you do just leave your rental without giving notice, you will not only lose your bond, but there's a fat chance of getting a referral for the next time you need to rent.

There is a process – so if you’re a tenant on a non-fixed term, so month by month, just provide 28 days notice and if you need to move sooner than that because you can’t pay for the full 28 days, let the agent know and the landlord know. They can then make the availability date earlier and find a tenant sooner. Then you’ll only need to pay rent up until that time.

The most important thing to do is to communicate with your property manager and landlord.

Don’t muddy the waters

The property manager will request for you to fill out a form, and in that, they will be looking for evidence that you have actually lost your job and that there are major changes to your income.

Now is not the time to see what you can get away with – ultimately you could ruin it for other tenants who genuinely need support.

If you are able to pay rent on time, then do it. Realise that on the other side of your rental is a landlord who is most likely trying to pay off a mortgage and will bear the grunt of your actions from the banks.

Also, try to cut back on lifestyle factors that could be eating up your savings during this time. Nokes says that he has already had requests from tenants who have asked for decreases in rent for the equivalent of what their Netflix and/or online exercise classes cost.

The government’s expectation is that food and water are first and the cost of housing is second. I get that you’re at home and you don’t have a lot to do, but if that means you’ve got to cut out luxury items to pay for accommodation, then that’s what you’ve got to do. 

Be honest and hope for the best

When you phone your landlord, explain your situation. Tell them why you feel you will be unable to pay rent on time, or at all, and whether you think you will be able to stay or if it’s best the property manager seek new tenants.

If you have proved yourself as a reliable tenant in the past, chances are your landlord will have your back during this time. Of course, some landlords are in better financial situations than others so will be in a better position to help their tenants, but you never know.

We have a lot of landlords coming to us saying they have also lost their jobs. So even if this is a second property for them, if they’ve lost their job, then they are relying on that rent for income.

That’s why I think the most important thing with these rent alteration requests is that every single one of them is case by case. There’s no cookie-cutter for them.

Understand Your Landlord’s Situation

Many landlords have worked hard to save a deposit to purchase a property, which they then lease out to pay off their mortgage. Others rely on their tenants’ rent to pay back the debt. While some landlords depend completely on their rental income to live. The chances of your landlord being some giant mogul who’s got all the money in the world are almost zero.

Whether it’s a moratorium on evictions, a reduction in rent or delayed payment, landlords who rely on rental incomes will be impacted.

While the big four banks and some others are offering loan holidays to struggling home loan customers, mortgage holders will still accumulate interest and potentially find themselves with higher repayments once the virus pandemic is over. 

However, property managers across the country say many landlords are supporting their tenants since the pandemic broke, which could be due to the lifeline from the banks.

Two red and blue arrows meet around a sphere with words Common Goals representing mutual interests and same needs and desires

We need to work together

Aside from the eviction ban, it’s unclear what, if any, assistance will be available for landlords and tenants during this difficult time. Here’s what we know so far.

Property managers are working overtime as mediators between tenants and landlords, to help them reach rental arrangements that will see both parties through the next few months.

When you phone your landlord, explain your situation. Tell them why you feel you will be unable to pay rent on time, or at all, and whether you think you will be able to stay or if it’s best the property manager seek new tenants.

If you have proved yourself as a reliable tenant in the past, chances are your landlord will have your back during this time. Of course, some landlords are in better financial situations than others so will be in a better position to help their tenants, but you never know.

At the end of the day, we are experiencing a crisis and we should have each other’s backs. The goal is for everyone to get through this in one piece.

Scroll to Top