Rental First
Information for landlords and tenants:
The Government has announced significant measures concerning commercial and residential leases in the country. States and territories are moving ahead with moratorium on evictions of persons resulting from financial distress as a result of the Covid-19 pandemic and legislation has already been passed to this effect in New South Wales as at 2nd April 2020.
This moratorium will last for 6 months with the PM calling for landlords, tenants and banks to sit down and talk to each other and work this out.
That is the big picture. If one delves deeper there are a few points to ponder:
- The lease agreement between a landlord and a tenant is a contract. If the tenant is under financial hardship as a result of the pandemic they can ask for relief from the landlord with respect to rent but conversely the landlord might have a mortgage to pay. The banks may provide a loan holiday or suspension for some duration but the loan amount and/or interest is not waived off for that duration.
- Similarly landlords may offer a payment plan to the affected tenants to pay reduced rent for the duration and then catch up with the stated amount over a period of time.
- Additionally the allowances and subsidies the Federal Government has announced for affected workers should be able to cover up a good portion of rents.
Therefore from a landlord’s perspective it is better to have an affected tenant paying reduced rent for the time being rather than nothing or having a vacant property in these uncertain times.