Good Evening to all our valued Landlords
I refer to my email to you dated last Friday 10th April, regarding the announcement by Deputy Premier, Jackie Trad and the Minister for Housing & Public Works, Michael DeBrenni regarding the proposed special COVID-19 protections for residential tenants and owners. The REIQ has received further information since that announcement and advise they are now further concerned more than ever and have written to Annastasia Palaszczuk requesting for urgent amendments to the proposal.
It is important to acknowledge that the industry, REIQ and ourselves don’t want to throw tenants to the wall. We support the implementation of protection measures, but it must be fair and equitable for both Landlords and Tenants to ensure a stable property market. The Palaszczuk Government proposed package is clearly ignoring the rights of property owners and is eliminating the basic fundamental rights as owners along with our voice.
The Government needs to recognise that property owners, just like tenants, are extremely vulnerable due to COVID-19 and both property owners and tenants are losing jobs and financial stability.
Following are some specific concerns:
Rent Moratorium – Originally when Minister Michael DeBrenni first announced the Rent Moratorium, he said it would be a rent deferral. The Palaszczuk Government has introduced something completely different by changing it to a rent waiver. This means the rent arrears cannot be recovered. By the Government not allowing the rent to be recovered, they are expecting Owners to negotiate a rent reduction with the Tenants. How this affects you….If your original rent is $400pw and a new rent was negotiated with the tenant due to financial effects of COVID-19 to $200pw, then it is reduced in writing as an amendment to the Lease and that will be the rent you will receive moving forward. You cannot recover the shortfall and you cannot increase the rent whilst the tenant is living in the property which we assume is for the lease term. When asked to comment on how Owners are supposed to pay their Mortgage, DeBrenni is recommending owners speak to their Banks for assistance. Now what everyone needs to understand is, you will receive a reduced rent that cannot be recovered and all the Banks will do is give you a payment pause and you will need to eventually pay it back with less funds from your rental property. This is extremely unfair and it is also important to note the ‘big 4’ banks are not consistent in their relief packages for their customers as it varies from bank to bank.
Moratorium period – The Queensland Government has now gone beyond what the Federal Government has recommended. The Federal Government recommended a period of 6 months for a moratorium, however, the Queensland Government are recommending 12 months. This is absolutely ridiculous and we are appalled by this that the Queensland Government would clearly not care about the financial stability of our property owners. It is a bitter pill to swallow to accept a 6 month moratorium, let alone our Government pushing for 12 months.
End of Lease – Once again, another ridiculous proposal by the Government. If your tenant’s lease expires in the moratorium period, your tenant will immediately be allowed to get another lease for a further period of 6 months at the agreed reduced rent in the previous lease. This is despite the Owner’s financial situation; whether you are moving into the property; or wish to sell the property. The Government is only looking after the tenant in this regard and clearly not considering the financial destruction they will be causing a lot of property owners.
Rent Reduction Request – Minister Michael DeBrenni initially made it clear we were not allowed to request financial evidence from the tenant to substantiate their request. It is absolutely unreasonable to expect an Owner to make a decision with no evidence. Late today, the REIQ received confirmation from DeBrenni’s office that they are re-considering this to ensure we can request such financial evidence. It will be interesting to see whether the Government honours this and allows us to seek evidence.
Notice to Leave prior to 29/3/2020 – If your Tenant was issued a Notice to Leave prior to 29th March 2020, we expect this to stand.
Under the proposed package, the landlord is still required to perform emergency repairs to the property. It is important for you to understand, if your tenant’s rent is reduced, you still must carry out maintenance. These are and have always been 2 separate issues.
Landlords need to think very carefully about selling in the moratorium period because tenants are able to refuse access for you to sell your property despite your reasons for selling. Basically, if the tenant won’t give your Agent access to sell, my recommendation is not to place your property on the market until we can vacate the tenant. Our Agents can certainly guide you through this process and are happy to discuss this with you at length.
Landlord Insurance – Landlord Insurance has been widely misrepresented to the industry by the Government. It has now been advised the rent arrears due to COVID-19 may not be covered by Landlord Insurance. This is because the Government has dictated the property owner needs to negotiate a rent reduction with the tenant and once this occurs, it renders the insurance invalid. A lot of our landlords took out Terri Scheer Landlord insurance prior to the embargo, however, it is still important to have this insurance in place for tenant damage etc. that may require a claim to be lodged.
Break Lease – normally in this situation if a tenant breaks their lease, they are responsible for payment of rent until a new tenant is found, they pay the smoke alarm maintenance, advertising and let fee. Under the new proposal, the Government is now saying a tenant can break their lease with 1 week’s notice and the tenant paying 1 weeks rent, and then they get to walk away ‘scott free’.
The proposed package is considerably more supporting of tenants than the Federal Government intended, however, the Federal Government has passed the responsibility onto the State Government so this all comes down to the Palaszczuk Government looking after tenants to the extent it has the potential to bankrupt some property owners. The REIQ are continuing to advocate for change to the proposal, however, what has previously been advised and the content of this email is the framework that will be put in place if the Government chooses not to listen to us and protect our property owners.
As mentioned previously, the majority of our tenants will do the right thing and we will be speaking to any owners whereby the tenant’s are financially struggling due to loss of jobs. This might also be a good time to consider refinancing your mortgage. If you would like me to put you in touch with our Mortgage Broker, please let me know because a Mortgage Broker has around 40 products to choose from instead of considering just 1 bank. It will cost you nothing to look into this and it could reduce your weekly mortgage payments.
I would also like to point out that the REIQ are doing an incredible job fighting this battle, however, they now want everyone to get onboard to amplify the message to the Queensland Government. The REIQ have provided us with a letter for you to download and sign and send to the Premier. The link for the letter is: https://www.reiq.com/everyonematters and then click on the landlord letter, insert your name, print and sign the letter and send it to the Premier via post of email. Parliament is due to meet again on 22nd April 2020, so please ensure you express your concerns prior to this date.