Stop the fight: it’s not about landlords vs tenants at the moment

OPINION

There has always been a divide between landlords and tenants. That us-versus-them dynamic is extra prevalent amid the coronavirus pandemic, as both parties have found themselves in uncertain situations. 

As a renter living in a share house in Melbourne, you would think I sympathise more with tenants – but this isn’t the case. I actually feel for landlords whose tenants are now jobless and unable to pay their rent due to COVID-19.

It’s not about us versus them. It’s about understanding both sides of the coin and working through this difficult time together.

I’m writing this off the back of another story I wrote, reporting on the announcement of a six-month moratorium on evictions across Australia.

The story sparked a flurry of comments on Facebook, displaying the widening gulf between tenants and landlords.

Many landlords feel the move is unfair and only favours the tenants. On the other hand, tenants are breathing a sigh of relief because they have the security of a home for the foreseeable future.

The states and territories will now legislate the eviction ban under their respective jurisdictions. In the meantime, landlords and renters in financial stress are being encouraged to come together and negotiate rental agreements.

Understanding landlords

Before working in the property sector, I naively thought most landlords were wealthy investors with million-dollar property portfolios that provide me with a home. But now I understand this isn’t the case for the vast majority of landlords.

Many landlords have worked hard to save a deposit to purchase a property, which they then lease out to pay off their mortgage. Others rely on their tenants’ rent to pay back debt. While some landlords depend completely on their rental income to live.

Financial problems

Landlords have mortgages to pay back and they will get penalised by the banks if they fail to meet this. Picture: Getty

“The chances of your landlord being some giant mogul who’s got all the money in the world is almost zero,” says Sam Nokes, head of department – property management at Jellis Craig.

“It’s probably the little nonna in the next house who owns that property and that pays for her life. And because of her assets test, she won’t be able to get the pension and now she has no money,” he says.

Whether it’s a moratorium on evictions, a reduction in rent or a delayed payment, landlords who rely on rental incomes will be impacted.

While the big four banks and some others are offering loan holidays to struggling home loan customers, mortgage holders will still accumulate interest and potentially find themselves with higher repayments once the virus pandemic is over. 

However, property managers across the country says many landlords are supporting their tenants since the pandemic broke, which could be due to the lifeline from the banks. 

“We actually had a landlord offer a rent reduction before the tenant had to ask for one. He said, ‘I love my tenants, they’re really good people and you guys did a great job choosing them’,” says Noakes. 

Understanding tenants

On the other side of this is the tenant, many of which have found themselves without work, or with reduced income due to their workplaces closing up shop amid the virus threat.

Renters, like me, want to stay in the place they call home, but many will be forced to move out because they can no longer afford the rent.

The fact is, many renters don’t have the option of moving in with mum and dad, and what we don’t need right now is an increase in homelessness.

Those tenants who have been left without work or are experiencing loss of income are racing to apply for new government payment packages – but there is a waiting period and not everyone is eligible.

In most states, there have been no changes in tenancy laws and tenants are still required to pay rent on time. Even when the moratorium on evictions is set in stone, tenants who can’t pay rent will still be faced with a debt once the six months is up.

I’ve already had friends leave their rentals to move back home because they are worried of being in debt once this is all over.

We need to work together

Aside from the eviction ban, it’s unclear what, if any, assistance will be available for landlords and tenants during this difficult time. Here’s what we know so far.

Property managers are working overtime as mediators between tenants and landlords, to help them reach rental arrangements that will see both parties through the next few months.

“I was talking to one of my property managers… and she said she had six requests so far [for tenants seeking assistance] and that five of those had been approved,” says Nokes.

“We’ve had people who have asked for a reduction in rent; people who have asked for a deferral. That’s to say people who have said ‘look, I cant pay rent this month but I’ve got a gig next month, so I’ll be able to pay then’.”

At the end of the day, we are experiencing a crisis and we should have each other’s backs. The goal is for everyone to get through this in one piece.