Coronavirus rent relief: Wave of requests expected in Victoria
Another influx of tenants seeking rent relief from landlords is on the cards as Victoria’s emergency legislation comes in. Many believe the package is not enough to support those struggling.
More struggling tenants are tipped to request rent relief now the Victorian Government’s emergency legislation has come into effect.
Property managers across Melbourne say about 12 per cent of tenants on their books have already lodged applications for rent discounts or deferrals during the COVID-19 crisis.
But several believe the worst is yet to come.
Barry Plant Doncaster East property management director Brendan Di Rago said his office had received more than 200 relief requests, with landlords commonly granting reductions of about $100 per week.
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In cases of serious financial hardship, arrangements had been made to defer up to 50 per cent of regular payments until later in the year, he said.
“But the real effect of coronavirus isn’t going to kick in for another month or so, when people’s annual leave or redundancy payments dry up,” Mr Di Rago said.
“We’ve had talks with tenants who have been able to pay rent so far, but know they will still be struggling to in the months ahead.”
He believed the $500 million rent package — which passed parliament on Thursday and included $420 million of land tax relief — would do little to support landlords or improve negotiations.
“Land tax costs mum and dad investors up to about $2000 a year, so 25 per cent off that isn’t even going to cover one week of rent,” he said.
Collings Real Estate head of property management Caleb Pikoulas expected the government package to alleviate landlords’ pain in the short term, noting many had already “come to the party” to help tenants.
“A lot realised, ‘I can’t evict someone in financial hardship, and I’m going to lose money either way’,” he said.
Mr Pikoulas said about 70 renters of properties he managed across Melbourne’s inner north and northeast had requested reductions over the past month.
Landlords mostly approved 20-40 per cent cuts for either three- or six-month periods. The vast majority offered a straight discount rather than deferring payments.
Real Estate Institute of Victoria president Leah Calnan said many renters were waiting to receive details about JobKeeper and JobSeeker payments before making formal requests.
She advised them to provide pay slips, letters from their employers or former employers, proof of government support, and bank statements when requesting relief.
WB Simpson and Sons director Richard Simpson said rent relief for commercial tenants was often negotiated based on how much income a small business had lost during the pandemic.
“But the way things are going, there may be some restrictions lifted next month that could help non-essential shops reopen. So we’re not looking to make agreements that last as long as six months,” Mr Simpson said.
— with Samantha Landy
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Originally published as Coronavirus rent relief: Wave of requests expected in Victoria