Risk Mitigation for Landlords In Viral Times
Risk Mitigation for Landlords in Viral Times
Recently our Director was invited to discuss the latest situation for both tenants and landlords during the pandemic.
Uwe Jacobs of Property Friends hosted the interview which can be seen below.
Rent Reduction
Landlords and tenants are encouraged to negotiate for a temporary rent reduction, however they will need to make up the payment once the six month period has finished. A payment plan should also be agreed to make up the shortfall.
If a landlord does provide a tenant with a rent reduction, the landlord can then receive a 25% discount on their land tax, and defer the payment of the balance of their land tax until 31 March 2021. However, many landlords own one property and do not pay land tax! Land Tax is calculated on the land value of any property you own but do not live in. Your principal place of residence (home) is exempt. Follow this link for more information on Land Tax Relief.
Mortgage Relief
Landlords can apply for mortgage relief from their Bank. This allows them to hold all mortgage payments for an agreed period - up to six months. However, the unpaid amount is added to the loan, and interest is calculated on the whole of the outstanding balance, ie they end up owing more at the end of the six month period, than they would have owed, if they had continued to make their regular payments.
Rent Relief Grant
Tenants can apply for a rent relief grant of up to $2,000 if they are experiencing rental hardship due to the coronavirus (COVID-19) pandemic.
The one off grant is specifically for tenants to help them maintain safe, secure and stable accommodation. It is paid directly to the tenant’s agent, lessor or landlord to contribute to the tenant’s rental payments, under their new rental agreement.
A Tenant can apply for the grant if they have:
- reached an agreement for a rent reduction with their landlord,
- have less than $5,000 in savings and
- be paying at least 30% of their income in rent, and
- their household income must be less than $1,903.00 per week.
Rent is frozen until 26 September 2020 - no rental increases are allowed.
No evictions until 26 September 2020 - unless in special circumstances which include
- the tenant damages the property,
- use it for criminal purposes,
- or if serious violence occurs.
Routine inspections - online only - the tenant can be asked to do a virtual walk around for the landlord, and ask photos to be sent for any areas that require maintenance.
Private inspections - properties for sale/rent - inspections can be conducted in person, however only two people can be in the property at one time - ie the agent and one other.
VCAT - only hearing urgent cases - these are being conducted over the phone. All non-critical cases have been adjourned indefinitely.
Financial assistance from the Government includes:
Job Keeper payment.
The Commissioner has extended the time to enrol for the initial JobKeeper periods, from 30 April 2020 until 31 May 2020.
If you enrol by 31 May you will still be able to claim for the fortnights in April and May, provided you meet all the eligibility requirements for each of those fortnights. This includes having paid your employees by the appropriate date for each fortnight.
For the first two fortnights (30 March – 12 April, 13 April – 26 April), we will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by 8 May 2020. If you do not pay your staff by this date, you will not be able to claim JobKeeper for the first two fortnights.
You can enrol and claim for JobKeeper earlier if you choose. For example, you can enrol by the end of April to claim JobKeeper payments for the two fortnights in April.
Job Seeker payment.
The rules you need to meet to get JobSeeker Payment depend on your situation.
You’ll need to meet all of these:
- you’re between 22 and Age Pension age
- you meet residence rules
- your income and assets are under the test limits.
You also need to meet rules for either of these situations:
- You meet our definition of unemployed and you’re looking for work.
- You’re sick or injured and are unable to do your usual work or study for a short time.
Please be aware, that changes are being implement almost daily during this difficult time. It is important that everyone keep open the lines of communication and ensure that we all respect each other's position, take care of each other, and work together to get through.
If you have any questions, please do not hesitate to contact us.
