Small investors fearful of rent relief backlash

Small-time property investors fear they will bear the brunt of a generous rent relief package, amid claims the scheme is heavily weighted in favour of tenants.

Michelle and Jason Love outside their rental investment home in Westlake, Brisbane. Picture: Lyndon Mechielsen

Small-time property investors fear they will bear the brunt of the Queensland government’s generous rent relief package, amid claims the scheme is heavily weighted in favour of tenants at the expense of “mum and dad” landlords.

Treasurer Jackie Trad on Thursday moved to hose down the property sector outrage, insisting both landlords and tenants would be protected by legislation due to be introduced and pushed through parliament next week.

The Queensland government has promised a six-month eviction moratorium for tenants in financial distress because of the coronavirus pandemic.

If landlords and distressed tenants can’t negotiate a short-term reduced rental arrangement themselves, there will be mandatory conciliation through the Rental Tenancies Authority.

Tenants will not have to pay back the discounted rent at the end of the period, and there has been no income-loss eligibility threshold set by the government, as there has been in other states.

Real Estate Institute of Queensland chief executive Antonia Mercorella issued a dire warning on Thursday that the scheme was far too generous to tenants and would send “everyday people” to the edge.

“We’re not saying tenants don’t need protection at this time; we absolutely acknowledge there’s a need for tenant protection,” Ms Mercorella said. “Thirty-five per cent of Queenslanders rent their home, and the vast majority of that housing supply is provided by everyday people, mum-and-dad investors who have ordinary jobs, they’re not wealthy, they’ve taken a risk to buy property, make sacrifice to buy the property and hold it, and we need to protect them too.”

Ms Mercorella said the government should introduce a requirement for tenants to repay rental arrears after the crisis was over, and enforce a hardship threshold requiring tenants to prove they had lost 25 per cent of their income to be eligible for relief.

Brisbane couple Michelle and Jason Love are paying three mortgages, for their own home and for two investment rental properties. Ms Love is still working as an insurance broker, and Mr Love as a junior engineer, despite the corona­virus crisis, but they are concerned they will struggle to pay their mortgages if their tenants ask for a drastic rent reduction.

Mr Love said they were not the stereotypical cashed-up landlords, but rather ordinary people who scrimped and saved and bought ­investment properties in 2008 and 2010, in an attempt to prepare for retirement.

Their tenants, who pay about $450 a week for three and four-bedroom homes in suburban Brisbane and the Gold Coast, have not yet approached the Loves for discounted rent, and may not.

Mr Love said while they would try their best to work with their tenants should that situation arise, he believed renters should eventually repay discounted rent.

“Like the banks, you can do deferred payment for six months, but you still have to pay back that interest that accumulates,” Mr Love said. “The banks are still getting all that money, it’s just being delayed. If the banks can do that, why would I have to be out of pocket?”

Ms Love said they would much prefer to negotiate reduced rent than have to find new tenants in the current climate. “Both of our tenants are reasonable, I think they would try to do the right thing, and we would not like to see them put out on the street,” she said.

REIQ’s claim that tenants would not need to provide evidence of financial hardship was shot down by the government. Housing Minister Mick de Brenni said full fin­ancial details would have to be provided to the RTA in the event of a dispute. Tenants Queensland chief executive Penny Carr said the REIQ’s “cynical” campaign against the Palaszczuk government’s policy was pushing the rights of real ­estate agents, rather than landlords, and the focus of the entire industry should be to keep people in homes as a health measure.

“Our home is our first line of defence to this pandemic: that needs to be the first principle for this debate,” Ms Carr said.

Ms Trad said the government was giving landlords a $400m land tax relief package, which involved three months of refunded land tax and a deferral for the rest of the year. Tenants who had lost their jobs and were not eligible for any other financial assistance could apply for a one-off government grant of $2000 to go directly to the lessor, if negotiations failed.

“We know that landlords aren’t just property owners who have a huge amount of land; they’re also mum-and-dad investors whose rents are part of their income,” Ms Trad said.

Queensland Greens MP Michael Berkman has been strongly pushing for the rent relief, and criticised the REIQ argument as a ­“disgraceful scare campaign based on lies”.

“I’ve heard from many worried property owners who have been given a letter (from the REIQ) which wrongly claims tenants don’t have to show any loss of income and scaremongers about ‘false claims’,” Mr Berkman said.