One of Western Australia’s biggest residential property managers has called for more clarity around how tenants impacted by COVID-19 renegotiate rental agreements and how landlords can continue to service debt under the federal government’s moratorium on evictions.
Rental Management Australia chief executive Andrew Graham, who manages a rent roll of more than 3,500 properties in WA, Queensland and Victoria, said relief was desperately needed not only by renters, but also by landlords willing to support their tenants.
Mr Graham said issues that needed to be addressed included the ability for landlords to make mortgage payments if they grant a rent-free period or an abatement to their tenants, the ability to continue to maintain properties, and the prospect of continuing to make other statutory payments.
On the tenant side, Mr Graham said more clarity was particularly needed over a tenant’s obligations in the forms of paying additional rent or accepting an extended lease period once the COVID-19 crisis passes.
“The impact of this pandemic will be felt by many, if not most people, and that includes tenants and the hundreds of thousands of hardworking Australians who own investment properties,” Mr Graham told Business News.
“We haven’t yet heard any further detail from the state or federal governments as yet on residential tenancies and from our perspective, this announcement has raised more questions than answers.
“While we firmly support keeping as many Australians in jobs as possible via whatever support is available, our landlords and tenants remain in the dark as to what this means for them.”
Mr Graham said a common misconception emerging was that tenants could simply press pause on rental payments for the same period that a landlord could press pause on their mortgage.
“People will think they can get free mortgages or free rent, but the fine print is it gets tacked on to the other end,” he said.
“You’re still paying for it, it’s not free. Everyone thinks they are getting a six-month holiday on their mortgage repayments, but unfortunately it balloons back at the end.
“The banks have taken this on board quite well, but I also have to remember the devil is in the detail at the end.”
Mr Graham said RMA had put several initiatives in place to help tenants and landlords, with the centrepiece of the company’s plans around understanding what government stimulus was available for both parties.
“I see both sides of the story, the tenant’s side and also the landlord’s side,” he said.
“And when tenants say they can’t pay their rent, and you advise them of all of the packages that are in place, some of them don’t realise that there are options available to them.
“There is a lot of stimulus in the marketplace at the moment but there are people that fall through the gaps, too.
“I know of one commercial owner in their 70s, people are not paying their rent, they have a mortgage on it and also don’t get a pension, so that property funds their needs also.
“They are quite stressed about it all.
“The biggest thing for us at this point in time is really understanding what the stimulus packages are, getting our staff to understand what those packages are and then look at what’s in place and also heightened communication.”