Sydney-based property advisor and manager Gault & Co has provided a guide to help tenants and landlords deal with rent reviews due to hardship in the wake of the COVID-19 measures. 

Ramon Mitchell, founder of Gault & Co property advisory, said both landlord and tenants are overwhelmed and confused by what to do in relation to changing circumstances. 

“Property managers are receiving an extraordinary number of calls on what do in relation to rental properties," said Mr Mitchell. 

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Ramon Mitchell, Managing Director, Gault & Co Photo: REINSW

“It’s coming from both directions – landlords and tenants.

"While tenants are anxious about making rental payments, landlords are under financial and employment pressures as well.” 

Mr Mitchell said clear guidelines on how to address the issue are needed immediately. 

“We are still awaiting on a detailed response from state governments on exactly how they expect landlords and tenants to proceed in the wake of the Prime Minister’s announcement last night about a six-month moratorium on rental evictions. 

“Of course, regardless of additional detail, there is already a formal process to follow in seeking a change to rental terms. 

“On a positive note, there seems to be a genuine desire by both landlords and tenants to find solutions.

I’ve already had landlords contact me asking that their tenants be made aware that they’ll do whatever is necessary to keep them in place during this uncertain time.” 

“It’s a symbiotic relationship, so clarity on the process will benefit both parties. 

“If we can all just maintain a sense of humanity and fairness, it will bring benefits to everyone.”

Checklist for Property Managers/Negotiators

• Ascertain the situation of the tenant in writing with proof of job loss.
• Obtain an outline of the current rent arrangements including amount, due dates and length of lease and then changes needed ie. reduced rent, lease duration or payment timings.
• Obtain information of what government assistance the tenant qualifies for and if they've applied.
• Ascertain the situation of the landlord and whether insurance or negotiation is best for their situation.
• Work towards an agreement that will benefit all parties involved.

Doug Driscoll, founder of Starr Partners whose business includes a rental roll of around 13,000 properties and 11,000 landlords, agrees that communication is key.

"We currently have around 10 per cent of tenants who are in a position where they can not pay their rents and we will need to negotiate with the landlords for them," said Mr Driscoll.

"I see it like a hostage situation where, despite there being very experienced law enforcement officers around, they still bring in a negotiator to bring the situation to a good conclusion for all parties involved."

Mr Driscoll said his property managers have had to upskill in the past few weeks to ensure they are providing the best service to their landlords in such unprecedented times.

"Our property managers have had to learn about insurance for landlords so they can advise what insurance will cover the situation," said Mr Driscoll.

"We have reached out to the major insurance companies so we can educate our landlords on such matters, for example if a landlord negotiates a reduced rent with their tenant, they cannot claim insurance."

Mr Driscoll still saw the results of negotiating being a better outcome than claiming insurance in the long run.

"If you 'come to the party' you will at least get some rent," said Mr Driscoll.

"The worst thing we can do is assume tenants and landlords know their rights.

"There is a lot of information coming out and we need to get on top of it as an industry."

Ray White Group Managing Director Dan White said they also were talking to both tenants and landlord clients to understand both positions while they wait for formal advice from the Government over rent relief.

"We think our best opportunity for supporting each of the parties is to  relay the tenant’s current employment situation and any concerns over ability to pay rent with the landlord, so they may be informed as possible," said Mr White.

"Many landlords have shown great concern for the welfare of the tenant, their state of employment and what they think their future employment situation will be for six months.

"Fortunately, the majority of tenants are still employed and still paying their rent."

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Ray White Managing Director, Dan White Photo: Ray White

Mr White said there was a concern for vulnerable landlords who do not have a mortgage and rely on rental income as their only means of support.

"These people will generally not be eligible for any government support due to holding assets, ie means testing for pensions.

"With the moratorium on evictions for non payment of rent but no guarantees that government subsidies will flow to the landlord, this should be of grave concern to all. 

"We hope  a rent relief package will be delivered soon and so our guidance has been to negotiate on the current payment cycle and wait for news of the stimulus package."

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