Property Managers dealing with residential tenants during COVID-19 crisis  

7 April 2020

These comments must be considered in the light of regular changes to government policies and yet to be enacted legislation. The situation is changing on an almost daily basis.

As the landlord’s agent you should maintain your existing procedures for ensuring tenants continue to pay their rent when due and issue appropriate notices if they do not.

Under no circumstances should you give financial advice to tenants or landlords. Refer them to the many releases from the government and others.

As a general comment, early contact with all landlords and tenants should be made. An email or conversation along these lines with tenants and landlords would be appropriate:

We appreciate the impact the COVID-19 crisis may have on some of our tenants and landlords and assure you that your health, wellbeing and safety is most important to us. Unsurprisingly we are fielding a large volume of calls and enquiries from our tenants and landlords. We ask for your consideration during this time and if your matter is urgent, please call our office.

This communication is to try and help each of you consider the changing future and to plan ahead accordingly.

It is very important to understand that:

  • The government has announced that the proposed moratorium on evictions in cases of severe financial distress, that is not a moratorium on paying rent.
  • The government has announced various financial assistance packages to assist employees who have lost their jobs or had their hours reduced including a grant to meet rent payments. Tenants should investigate these fully.
  • Likewise landlords should investigate fully any financial assistance your bank is offering where there is likely to be financial hardship (for example non-payment of rent).
  • You should investigate these assistance packages, seek expert advice and if you consider it necessary, make any requisite application as soon as possible.
  • In view of these assistance packages it is expected that very few tenants will be unable to meet their rent obligations – however if you are a tenant having difficulty in meeting your rent, or believe that you will have difficulty in the future, please let us know as soon as possible.
  • Whilst we will do what we can to assist tenants in such situations the landlord is the one who will make any final decision. Many landlords rely on the rent they receive to meet their mortgage obligations and other property expenses.
  • Even if a landlord agrees to defer rent payments, unless otherwise agreed, the rent will remain owing.
  • Whilst there will not be any evictions for non-payment of rent by tenants in severe financial distress during the period of the crisis, tenants will still be subject to the usual breach and enforcement procedures for other defaults.

We encourage open and transparent communications and a cooperative approach to the problems being faced.

If a tenant asks for a rental reduction or a deferment of payment of rent, the points above should be made to the tenant if they have not already been made.

You are quite entitled to (and indeed have an obligation to your landlords to) enquire of a tenant if they have sought any of the assistance available to them and to require evidence from such a tenant that the tenant is in fact unable to pay the rent. That evidence might include a letter from the tenant’s employer that the tenant’s employment has been terminated, the employer’s confirmation that the tenant is not receiving the $1,500 per fortnight assistance package, copies of bank statements and or advice from Centrelink confirming the tenant has sought benefits. You are quite entitled to ask why the tenant has not sought the grant available through the state government.

You should discuss the tenant’s request with the landlord and also advise your landlord to check with the landlord’s insurer as to what loss any landlord’s insurance policy will cover. It is understood that the typical landlord’s insurance will not cover an agreed reduction in rent or a deferment of rent but unless you have something in writing from the insurer for your landlord/s which you should pass on to them, you should not make any comment about that.

If a landlord is willing to reduce or defer rent, it should be on the basis that if the tenant does not meet these new obligations, the existing rent continues to be payable.

Any reduction or deferment in rent should be recorded in a signed document or in an exchange of emails, with those records kept on file.