Some tenants are going on ‘strike’ and refusing to make rental payments. This comes with the Government announcing a 6 month moratorium on tenant evictions during Covid-19. It is important to remember that this pause on evictions is only for tenants who have experiences severe financial distress and lost employment and income as a result of Covid-19. Tenants whose circumstances that remain unchanged, are still required to pay rent.
There is also a misconception associated with a ‘rent reduction’ for tenants. Similarly to home loan repayment holidays, which we explain further in this blog, the amount which the rent is reduced by during the ‘rent reduction’ period, continues to accrue and is simply payable at a later date.
If my tenant stops paying rent, these are the steps that I would take:
- Your first contact point will be your insurer to discuss your landlord insurance. Often landlord insurance policies will provide some coverage for loss of rental income. Therefore, please make contact with them to see what you are covered for.
- Secondly, make contact with your property manager. This is to ensure if the tenant is able to make any contributions towards rent at all. The tenant may be able to access Rental Assistance or some kind of benefit through Centrelink. This would assist in making the rent repayments until they are able to work again.
- If it does get to the point where you’re not receiving any rent at all, and you foresee that you may have difficulties in making the repayments on the loan, then you will need to contact your financial institution to commence the Covid-19 financial hardship process.
Regardless of your situation, we are here to help you. Let’s work together to create a plan to help you and your family through this challenging time!
Our Covid-19 blog is full of more useful information and additional resources, so please make sure you click here to check it out!
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