Helping tenants keep a roof over their heads

CO-OPERATION: With over 3.3 million rental properties across the country, banks, real estate agents and landlords will all need to work together to help a huge number of tenants to keep a roof over their heads.
CO-OPERATION: With over 3.3 million rental properties across the country, banks, real estate agents and landlords will all need to work together to help a huge number of tenants to keep a roof over their heads.

The main take from the Government's announcement on March 29, is that when it comes to real estate, landlords and tenants will need to work together to get through the next six months.

Australian states and territories will put a six-month moratorium on evictions for both residential and commercial tenants during the coronavirus pandemic.

There are over 2.2 million rental properties across Australia, so for many, this will be the help they need to keep a roof over their heads.

But what about the mum and dad investors who rely on rental income to cover their mortgage payments on an investment property?

If you are a landlord, this doesn't necessarily mean you won't see any rent for the next six months. It's not supposed to be a free for all.

For those not significantly affected by coronavirus, it's business as usual with tenants and landlords both expected to honour their agreements.

However, tenants facing financial distress are encouraged to work with their landlord to agree on rent relief or temporary amendments to the lease including a reduction or waiver of rental payments for a defined period.

The banks have also implemented a range of initiatives to help mortgage holders.

The Reserve Bank has dropped the cash rate to a record low of 0.25 per cent making it cheaper to service mortgage debt.

The big four banks have also come to the party by offering the ability to pause repayments by up to six months.

The Federal Government's $130 billion Job Keeper wage subsidy will also help to relieve the financial pressure on renters and landlords.

Landlords want to maintain a healthy relationship with tenants but are generally not in the financial position to cover mortgage repayments for months on end

Peter Koulizos, PIPA

PIPA Chairman Peter Koulizos said the wage subsidy of $1500 per fortnight to eligible employees and businesses would go a long way towards solving tenant and landlord issues during the coronavirus crisis.

He said the subsidy would allow more tenants and landlords to meet their regular financial obligations including paying rent and mortgages.

"This policy has prompted a collective sigh of relief of sorts from tenants and landlords as well as everyone employed in the real estate sector nationwide," Mr Koulizos said.

"The payment will hopefully mean that there doesn't have to be a philosophical debate over whether tenants or landlords are more worthy of financial support during these difficult times."

Mr Koulizos said that before the announcement, many property investors had been worried about covering mortgage repayments if their tenants could no longer afford to pay the rent.

"The subsidy provides much-needed support for businesses and employees significantly financially impacted by the pandemic, which will ultimately see more people keep the roofs over their heads."

This story No evictions for next six months first appeared on Port Macquarie News.