May Rent Review: Covid-19

There’s no doubt we are going through some unusual and unpredictable times and I write these words immediately after reading the freshly release NSW ‘Residential Tenancies Amendment Regulation’ swiftly built around COVID-19. I think both Federal and State Governments are doing their best to quickly address a fast changing environment and I can only imagine the many long hours that have been spent conceiving, writing and rebuilding a whole stack of rental Legislation that had taken decades to evolve.

Meg and I manage a large and varied portfolio of property covering most of the Hills District. Because we are actively involved with all our tenants and landlords we have a good insight into how the Covid-19 pandemic is generally effecting tenants so If I convert our information on the impact of Covid-19 into statistics it looks a bit like this: Tenants who have requested a rent reduction: 6%. Tenants who currently cannot afford to pay any rent: 1%.

Thankfully with the governments updating of Legislation there is now a frame work under which we can operate but unfortunately for tenants there is not much relief for there landlords to pass on because its built around Land Tax. For example, If we look at an average Hills District property worth $1.3 million that’s rented at $850 a week. The owners Land Tax bill may be around $4,000. 25% of which (being $1,000) can be credited to the landlord to be passed back to ‘Covid-19 Impacted tenants’ as rent relief. In most cases that converts to a week or two’s rent, that’s it… All other negotiations must be done in ‘good faith’ and tenants can still be liable to repay reduced rent and ultimately evicted for non-payment of rent.

I don’t know any of our landlords that want to see there tenants loose there home because of Covid-19. That’s why we encourage open and transparent negotiation because every situation is different and it’s the best way to navigate a path that works for both landlords and tenants. And just as landlords need to be mindful that not all tenants are trying to take advantage of the situation, tenants need to be mindful that not all landlords are heartless rich people.

Fortunately we have a great group of landlords and tenants and for landlords who don’t receive rent, we don’t charge. And for tenants who can’t afford rent we’ll help guide you toward the best outcome. If you need some helpful advice just call us and we’ll do our best to help, even if you’re not a Mode client (yet).

Neil Clark, Principal- Mode