Landlord, tenant confusion should clear up soon

CONFUSION reigns among landlords and tenants following the Federal Government’s decision to ban evictions for six months and then leave residential property rules and assistance packages up to the individual states.

But clarity may be close, real estate specialists say, suggesting most states should have laws passed by the end of this week.

Real Estate Institute of Australia president Adrian Kelly said “it would have been nice to have a national framework”, adding new rules did not mean tenants could stop paying rent.

“At the end of all of this the debt will still be sitting there,” he said. “Most of the states are making sure that the rent still accrues – otherwise it would become a free-for-all.”

While the Federal Government urged landlords and tenants to speak with each other, in many cases they have never met and instead use a property manager as their gobetween. Property managers and real estate agents should be your first contact at the moment, until state-based authorities get their laws finalised.

“It’s hard for us to give definite answers when we haven’t got the legislation for each state,” Mr Kelly said.

“But it’s coming. There’s so much confusion out there and everybody’s jumping at shadows.

“Not only are we getting phone calls from tenants who are losing employment, we are getting phone calls from property owners who have lost employment. The landlord’s mortgage isn’t going to go away.”

Landlord insurance generally won’t cover an agreement to reduce rent, and investors should check with their insurer.

Binnari Property managing director David Hancock said it made sense for states to manage short-term residential tenancy changes because they had the existing infrastructure to deal with landlords and tenants, and each state “has its own set of laws and quirks”.

“While the decision by the Federal Government to introduce a six-month moratorium on evictions is admirable, the reality is that the current lack of detail will make it extremely difficult for each state or territory to manage these situations without undermining other aspects of the rental market,” he said.

“Most people can understand that renters who’ve lost their jobs require support during these unique times.

“However, until further policy is provided, how does a landlord deal with a tenant who has damaged their property and can no longer be evicted?”

Some property specialists have urged investors to think about the long-term when working out a deal with renters.

Landlords who make life difficult for tenants may end up losers because of rising vacancy rates in some areas, caused by unemployed people moving in with others and short-stay rental properties switching back to the traditional housing market.