COVID-19, Money, Wellbeing

COVID-19: Maintaining your rental income – information for landlords

Published on April 16, 2020 1:18 am, by

Key points

  • Governments around the country have rushed to implement changes to support residential tenants – including suspending existing eviction notices, a 6 month moratorium on evictions for rent arrears caused by COVID-19 and in some states,  restrictions on rent increases
  • The exact arrangements vary by state, but generally landlords are being encouraged to negotiate with tenants to provide rent relief such as rent discounts and rent pauses for tenants suffering financial hardship
  • In most cases rent arrears will still be owed to the landlord and should be received at some stage when things return to normal
  • Landlords may be able to claim for lost rent under landlord insurance policies, but exactly how this works and what your entitlements may be is complicated, depends on your policy and on the actions you take
  • In exchange for assisting tenants suffering financial hardship, most state governments are offering landlords land tax rebates and deferrals

Landlord options in New South Wales

MeasureDetails
60 day freeze on any existing eviction notices Where a tenant has not yet vacated the eviction notice is suspended
6 month moratorium on evictions for tenants suffering financial hardship due to COVID-19To be considered as suffering financial hardship the tenants income or the income of their household must have reduced by 25% or more
Landlords and tenants are encouraged to negotiate rent relief in good faith where a tenant cannot pay their rentRent will accrue during any negotiation period and will continue to be owed to the landlord
Some other eviction criteria have been extended by 90 days
Land tax rebates and deferral of land tax is being offered to landlords as an incentive to support tenants suffering financial hardship due to COVID-19Where a landlord provides tenants with a rent reduction equal to or more than 25% of their land tax the land tax will be rebated, Where are rebate is provided the land tax payment can also be deferred by 3 months

More information on rent relief arrangements in NSW is available from NSW Fair Trading

 

Landlord options in Victoria

MeasureDetails
6 month moratorium on evictions for tenants suffering financial hardship due to COVID-19
Rent freeze for 6 months
Landlords and tenants are encouraged to negotiate rent relief in good faith where a tenant cannot pay their rentRent will accrue during any negotiation period and will continue to be owed to the landlord
Hardship assistance for rentersTenants must have less than $5,000 in cash savings, be paying for than 30% of their income in rent and have registered a revised rental agreement with Consumer Affairs
Land tax rebates are being offered to landlords as an incentive to support tenants suffering financial hardship due to COVID-19Where a landlord provides tenants with a rent reduction equal to or more than 25% of their land tax the land tax will be rebated, Where are rebate is provided the land tax payment can also be deferred by 3 months

More information on rent relief arrangements in Victoria is available from Consumer Affairs Victoria

 

Landlord options in Queensland

MeasureDetails
6 month moratorium on evictions for tenants suffering financial hardship due to COVID-19
Landlords and tenants are encouraged to negotiate rent relief in good faith where a tenant cannot pay their rentWhere are new agreement is reached the tenant will not be liable for the previous amount
Hardship assistance for renters of up to $500 for 4 weeksTenants must have be homeless or at imminent risk of becoming homeless, have exhausted all other options, have lost thier job and have less than $10,000 in cash savings
Land tax rebates are being offered to landlords as an incentive to support tenants suffering financial hardship due to COVID-19Where a landlord provides tenants with a rent reduction equal to or more than 25% of their land tax the land tax will be rebated, Where are rebate is provided the land tax payment can also be deferred by 3 months

More information on rent relief arrangements in Queensland is available from the Queensland Government

 

Landlord options in Western Australia

MeasureDetails
6 month moratorium on evictions for tenants suffering financial hardship due to COVID-19
Rent freeze for 6 months
Leases that end during the emergency period autmatically convert to month to month leases
Landlords are not required to make non urgent repairs during the emergency period
Tenants can break fixed term leases during the emergency period without incurring break feesTenants must have be homeless or at imminent risk of becoming homeless, have exhausted all other options, have lost thier job and have less than $10,000 in cash savings

More information on rent relief arrangements in Western Australia Australia is available from the Western Australia Government

 

Landlord options in South Australia

MeasureDetails
Moratorium on evictions for tenants due to rent arrears caused by the financial impact of COVID-19For a period of 6 months or more
Restrictions on rent increasesResidential rents cannot be increased for 6 months or more
Landlords cannot charge interest on rent arrears amounts
There have been some changes in the procedures for repairs and maintenance and property inspections
Agents are not allowed to blacklist tenants with rent arrears due to COVID-19Where a landlord reduces rent by at least 25% for up to 6 months they will be eligible for a land tax rebate

 

Landlord options in Tasmania

MeasureDetails
Suspension of all evictions that have been served but where the tenant has not vacated until 30 June 2020
Moratorium on evictions for tenants due to rent arrears for 120 days
Tenants and landlords are encouraged to negotiate temporary rent reductions where required
Tenants and owners are able to apply to the Residential Tenancy Commissioner to break a leaseThis will be considered where continuing the lease would result in severe financial hardship
There are new limitations on carrying out general repairs and property inspections
Some changes to tenants obligations to keep premises cleanWhere this isn't possible due to COVID-19

ore information on rent relief arrangements in Tasmania is available from the Tasmanian Government

 

Landlord options in Australian Capital Territory

MeasureDetails
Moratorium on evictions for tenants due to rent arrears
Tenants and landlords are encouraged to negotiate temporary rent reductions where required
Tenants can request a rent payment freezeThe rent arrears will still be owed and must be paid to the landlord. The landlord cannot charge interest on the arrears
Agents cannot blacklist tenants for rent arrears
Landlords that provide rent relief for tenants are eligible for land tax rebatesWhere a landlord reduces rent by at least 25% for up to 6 months they will be eligible for a land tax rebate

More information on rent relief arrangements in the ACT is available from the ACT Government

 

Landlord Insurance considerations

If you have Landlord Insurance you may be able to make a claim for lost rent caused by COVID-19. However, there are some traps and you should carefully consider the terms of your policy and the impact of any actions you take.

One of the key issues you need to consider is that negotiating with a tenant and reaching mutual agreement on reduced rent will probably prevent you making a claim for the foregone rent. There may also be difficulties claiming lost rent if you don’t follow the normal processes for notifying tenants of rent arrears. The best option is to seek advice from your insurance provider. In the interests of helping tenants suffering financial hardship you should also consider whether other benefits such as land tax rebates that might be available offset lost rent or the inability to make a claim for rent you forgo.

 

If you are concerned about the financial impact of COVID-19 or you are facing the uncertainty of losing your job or having your income significantly reduced we can help. Sign up to MoneyBrilliant and we will give you access to a host of tools and features to help you organise your finances and make better decisions about your money. We’ll also give you tailored insights about the financial assistance available from governments and businesses to help you face the economic and financial challenges caused by the COVID-19 pandemic.

You can register for MoneyBrilliant online at www.moneybrilliant.com.au or download our app from the App Store or the Play Store.

 

This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711, ACL 493068). The information in this summary is of a factual nature only. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice or taxation advice you should seek advice from a licensed financial adviser or tax agent. You may also be able to access additional information from the websites of the Australian Securities and Investment Commission (ASIC) and the relevant product providers.

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Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.

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