RENTAL SUPPORT: HOW TO NEGOTIATE WITH LANDLORDS, TENANTS AMIDST THE COVID-19 CRISIS
- Posted By Prince Lakshman
The Victorian Government announced a $500 million rental relief package during the coronavirus pandemic as support for the negotiations between struggling landlords and tenants. The unveiling of the support package, which has been greatly welcomed by the real estate industry, means both sides can now come to a fair agreement in terms of rental payments.
WHAT’S INCLUDED IN THE SUPPORT PACKAGE?
Part of the support package is a six-month moratorium on evictions and rental increases, which was already announced on the 29th of March. However, tenants can still be evicted if they engage in hostile behavior or maliciously damage a property, or if a landlord is selling the property or they or their family needs to move in it.
As a consolation for landlords who reduce rents to help struggling tenants, Victorian property owners will be eligible for a 25 per cent discount on their land tax as part of a $420 million package. The remaining land tax can be deferred until March 2021.
There is also a $80 million rental assistance fund for tenants who are still paying at least 30 per cent of their income towards rent following rental reduction mediation with their landlord, who have less than $5000 in savings. However, these rental assistance payments will do directly to landlords.
According to Premier Daniel Andrews, it is imperative that Victorian landlords and tenants “work in partnership” to get through this crisis brought about by COVID-19.
When both parties don’t come into agreement, they are advised to seek the assistance of Consumer Affairs Victoria. Matters may then be referred for dispute resolution or to a Victorian Civil and Administrative Tribunal hearing.
Below, experts share some tips on how to come to a fair agreement.
TENANTS NEGOTIATING WITH LANDLORDS
— Determine the amount of rent you can afford to pay, and talk with your landlord or real estate agent to see if you can come to an agreement to reduce your rent until things return to normal.
— Do not stop paying your rent altogether. Continue to pay some rent, even if you can’t afford to pay it all upfront. This will show that you want to work with the landlord on a compromise.
— Get any agreement in writing, and don’t sign anything until you’ve had a proper look at it and a proper think about it.
— If you can’t strike an agreement you think is fair, use the formal mediation process with Consumer Affairs Victoria.
— Have a sense of confidence in the fact the Victorian Government has indicated they want to support tenants through this process. The process may not be straightforward, but don’t give up.
— Refer to the Tenants Victoria website.
— Don’t suffer in silence, know support is available and seek that support.
LANDLORDS NEGOTIATING WITH TENANTS
— Remember your tenants are likely suffering elevated levels of stress, so ask them to speak first and summarise their essential points to show them you’ve heard what they have to say.
— You can ask them to demonstrate loss of income, but beware keeping any documents they provide could open you to privacy concerns.
— Be aware you have two options: rent reduction or deferral of payments. If you offer rent reduction, ensure your agreement has a time limit. And if you offer a deferral, be aware of the fact you may find your tenants unable to pay the accumulated debt when it comes due.
— For many landlords, offering a temporary rent reduction may be enough to secure a long-term tenant and access the land tax reduction and deferral.
— If your tenant is still paying more than 30 per cent of their income towards rent following mediation with you, and they earn less than $100,000 and have less than $5000 in savings, they will be eligible for rental assistance payments from the state government.