Has COVID-19 changed my relationship with my tenants?

Has COVID-19 changed my relationship with my tenants? 27 May 2020
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If you own an investment property, you may have heard that the government has enacted measures which changes your relationship with your tenants.

Is your tenant falling behind in making rental repayments? If so, from 15 April 2020, the government has put a temporary stop on landlords taking steps to evict tenants. This is in place for 60 days.

If your tenant is claiming that they are financially impacted, they must prove that as a result of COVID-19 that their household income (including government assistance) is reduced by 25% or more.  You can require your tenant to prove documentation to evidence this.

Once the 60 day period has expired, you are required to negotiate a rent reduction with your tenant and can only take steps to terminate the lease if it is fair and reasonable to do so.

Your tenant’s eligibility for this initiative will, of course, change over time depending on their reason for hardship.  Your tenant may find new employment, or be reemployed as their employer is now eligible for JobKeeper payments.

The government has also extended the notice period to 90 days in circumstances where you want to end a:

  • Fixed term agreement
  • Periodic agreement
  • Tenancy breach for reasons other than non-payment of rent or charges.

Your investment property may have a mortgage and you rely upon rent repayments to service your loan.  If you are struggling to make ends meet, contact your mortgage provider immediately to negotiate a form of repayment holiday or variation of mortgage repayments.  A conversation with your mortgage provider should form part of your negotiations with your tenants.

We can help you through the negotiation process.  Contact Us on (02) 4943 3988 to speak to one of our property lawyers.

This blog was written by Senior Associate,
 Liz McIntyre
Liz practises in the areas of Family Law, Wills & Estate Planning,
Deceased Estates, Wills disputes and Conveyancing

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