End tenant abuse of rent rules
Some renters are taking advantage of virus moratorium, writes Louise Elliot
THE state government is considering extending the one-sided protection whereby tenants can not be evicted when they do not pay rent.
In making its assessment the government must be aware that the extreme safety net it introduced is being abused. There are many disturbing cases of tenants whose financial situations have not changed, or have improved, simply choosing not to pay rent.
As founder of a group made up of more than 450 property owners, I am aware of at least $50,000 being owed to a dozen property owners which is payable by tenants who have the means but have decided not to pay because they don’t have to. This is no doubt the tip of the iceberg. In many cases this started immediately after the moratorium was announced and has coincided with the tenants ceasing all communication.
When the government stripped property owners of their right to be paid in accordance with the lease agreement, the government effectively made the property owner an interest-free loan provider, with this loan carrying a high risk of not being recoverable. The government also transferred the responsibility for providing social housing to everyday, hard working people who are trying to secure a sound future for themselves and their families, thereby being less of a drain on the government purse. Imposing the duty to provide free housing on everyday people cannot continue. Extending this onesided protection cannot continue. It is the government’s role to provide the housing safety net.
Yes, housing is essential. Food and transport are also essential. The government’s intervention in residential housing contracts has been extreme, yet we have not seen multi-million-dollar supermarkets forced to accept IOUs or cut their prices by a third. There is no interest-free loan system in place for transport, and payment plans for electricity and water must be asked nicely for. Payments for 60-inch TVs still need to be made, credit cards paid.
The “every investment carries risk” excuse has no weight here. Tenanting out residential property has plenty of risk — the house could burn to the ground, be destroyed by tenants who disappear, sit vacant — but the risk of nonrent payment is limited and mitigated by a legal contract, the Residential Tenancy Act 1997, the payment of a bond and the court system. Well, it was, until the fundamental principles of a lease were ripped apart.
For many, there is a deep sense of distrust now in the residential property system because a lease has proven to be worthless. OK, so sell, some might say and be pleased. But think that through. Given the nervousness banks have around lending and the reduced income and lack of job stability out there, the sale is likely to go to another investor or the property will sit vacant because of fear of being taken advantage of again. Others may be lured to shortterm rental where no pay, no stay is one of the advantages.
Abuse of government support is nothing new. Centrelink has entire teams dedicated to this. What is new is that the government has transferred the burden of this abuse to mums and dads, retirees and those just trying hard to secure a good future. This abuse should also not come as a surprise given the stick-it-to-the-man anticapitalism groupthink that surfaced with the ammunition the pandemic has provided. The mental and financial anguish this has imposed on property owners must stop.
THERE ARE MANY DISTURBING CASES OF TENANTS WHOSE FINANCIAL SITUATIONS HAVE NOT CHANGED OR HAVE IMPROVED SIMPLY CHOOSING NOT TO PAY RENT