Prime Minister's announcement re: evictions

Discussion in 'Property Management' started by Lil Skater, 29th Mar, 2020.

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  1. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Just finished watching the press conference with the PM.

    Still limited information, but it looks likely there will be no evictions for rent arrears for the next 6 months if your tenant is experiencing hardship because of COVID-19.

    He did say commercial throughout, but had mentioned residential as well - not very well presented, so I assume it’s for both, but who knows.

    The salt in the wound was the approach of “work it out yourselves”. But then apparently there’s more to come? What?

    Will be an interesting few days, worst case if you had no rent coming in for 6 months, could you survive? Keeping in mind there was no discussion about taxes, council rates etc and of course you’d need to keep maintaining the property. So it’s not as simple as deferring a mortgage and paying additional interest at the end of it all. Positive would be that hopefully they’d need to pay it back, but that could take years.

    Of course this is all new information and no official statement, but it will be interesting to see the impact on all sides if this proceeds.
     
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  2. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    upload_2020-3-29_18-15-8.png
     
  3. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    I think the take home is if the tenant can't pay now, they can stay, but they must pay later, there is no free ride, and Lessor/Agents should not offer any rent reduction or rent abatement because they'll only be shooting themselves in the foot later when trying to make a LL loss of rent claim etc.
     
  4. Hetty

    Hetty Well-Known Member

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    I would think most would be able to manage it if they can freeze their mortgage(s), it’s just that that wouldn’t be fair if interest is capitalised and they never need to pay it back. Though that’s not everyone, there are landlords renting out places and having that fund their retirement, or livelihood, wouldn’t be fair on those people either who may be forced to sell.
     
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  5. Hetty

    Hetty Well-Known Member

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    Did he say that? I couldn’t watch it, was wrangling a toddler. I read snippets on The Guardian and didn’t get that impression
     
  6. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    No that's my 2c and how I will be handling my portfolio for clients I manage unless they instruct me otherwise
     
  7. Hetty

    Hetty Well-Known Member

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    This makes me think he’s asking us to take a hit “we need landlords and tenants to sit down and come up with arrangements that enable them to get through this crisis.”
     
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  8. Owlet

    Owlet Well-Known Member

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    Therein lies the issue - good luck trying to get back any rental arrears. After the 6months some will just move to a new property rather than back paying the arrears. VCAT will be no help either.
     
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  9. Lil Skater

    Lil Skater Well-Known Member Business Member

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    It’s how I interpret too - but if you’ve ever had a payment plan through VCAT for a months’ rent that takes MONTHS to make up. Imagine 6 months of arrears? You can’t do an extra $20/week, it’s just not feasible.

    Someone I’m in a chat with said they think we’ll be able to get possession through VCAT for a breach of a payment order during that 6 months. I doubt it, if the tenant says they can’t pay due to the pandemic they won’t move for a possession order - no way.

    Even those that can defer mortgages, average investor earns less than $80k pa. Even without the mortgage you have thousands out of pocket a year on fees, let alone maintenance etc which quickly will eat into an average kind of income.
     
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  10. Jasper

    Jasper Well-Known Member

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    He is a pretty bad communicator. Will just need to wait for the written statement
     
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  11. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    I'm in QLD, I'm fairly confident most will be fine to clawback - basically, Tribunal assess hardship on case by case basis, if they haven't qualified for Centrelink and also used their Super, then why should they get hardship?.. failing that, this is what you'd hope LL insurance as a backup would be for...we'll find out soon enough though
     
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  12. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    Re: QLD,

    upload_2020-3-29_18-37-6.png
     
  13. Owlet

    Owlet Well-Known Member

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    I think it will be hard for tenants to prove they can't pay
    - The gov is providing Newstart and Rent Assistance for those that lose their jobs
    - The gov has allowed withdrawal of 10k from super

    Landlords won't be able to evict but tenants will be allowed to break lease - financial hardship.

    No mention by the government about car loans, personal loans and novated leases etc. Some tenants will pay their car loan obligations before their rent.
     
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  14. Guzz226

    Guzz226 Member

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    I think hope is the key word...don't you need to evict before LL insurance will payout?
    If legally you are unable to evict.......

    Hopefully the official guidelines provide clarity as surely they have thought about the next link in this chain of landlords......
     
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  15. Owlet

    Owlet Well-Known Member

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    I hope we retain the ability to end leases for all other reasons. For example: if you genuinely planned to move into an IP in 6months time or the tenant has trashed the property and breaches have already been served.
     
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  16. Lil Skater

    Lil Skater Well-Known Member Business Member

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    We’ve so far put requests on hold for adjustments for the most part, pending announcements. Once the written statement is out we can figure out a course of action.

    @Michael Mitchell VCAT is moving to phone too, there’s a bit of a delay - but that won’t be the issue. I just see it being difficult to get the possession order.

    @Owlet I agree too, I think all the jumping up and down at the moment is a knee jerk reaction, and a lot of people don’t want to dig into their super. Which I can understand, but the expectation that one persons financial hardship can be placed on another doesn’t work.
    Can’t say I blame them though, we’re fortunately both still working (wait and see about hubby) - but I would be pretty upset if one or both of us was out of a job and didn’t look like we could secure another for months.

    I feel like other options would still be on the table, but I’m sure it will be a wait and see as well.
     
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  17. Jasper

    Jasper Well-Known Member

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    Yes, this is exactly what I'm waiting for (l added it to my LL insurance but I've got til mid-April to pay it). No idea if it's worth the increase
     
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  18. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    Not now, but in the future, then we'd hope loss of rent from during the tenancy + loss of rent until released, up to 22 weeks I think it is with TSI currently.
     
  19. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    State and Territories will be moving to put a moratorium on evictions of persons as a result of financial distress if they are unable to meet their commitments, and so there would be a moratorium on evictions for the next six months under those rental arrangements.
    Now, there is a lot more work to be done here and my message to tenants, particularly commercial tenants, and commercial landlords, is a very straightforward one — we need you to sit down, talk to each other and work this out about looking at the businesses which have been closed, businesses that may have had a significant reduction in their revenues and we need landlords and tenants to sit down and come up with arrangements that enable them to get through this crisis so on the other side, the landlord has a tenant which is a business that can pay rent, and the business is a business that can re-emerge on the other side of this and be able to go on and employ people on the other side of these arrangements.


    Live: Indoor and outdoor gathering sizes reduced to two people, moratorium on evictions announced
     
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  20. Lacrim

    Lacrim Well-Known Member

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    Yeah unfortunately its open season on landlords. Renters just got an out to pay the rent - unbelievable. You can try and say its only a deferral etc etc but my gut tells me....
     
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