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How best to handle tenant job loss during COVID-19 (Coronavirus)?

Photo by Tim Gouw from Pexels

It looks like we're heading into an economic recession prompted by COVID-19. It's more than fair to assume a lot of people will experience financial hardship, and there will be a large scale of job losses across the country.

A lot of landlords would be thinking of the best ways to handle the potentially inevitable situation of tenants losing their jobs, what it means for their tenants, but also their rental business and their mortgages.

The Government has put a temporary freeze on rent increases in a bid to provide relief to tenants facing reduced working hours or job losses as a result of the coronavirus crisis. Tenancies can't be terminated by the landlord during the lockdown period, unless the parties agree, or in limited circumstances, regardless of when notice was provided.

But the situation is not that simple as landlords still have to pay mortgages, rates, insurance, and maintenance costs. The Government has announced a six-month home loan deferral scheme or mortgage holiday scheme for homeowners whose income has been impacted by Covid-19.

It is important, however, to remain empathetic and compassionate about potential problems arising with tenants.

Firstly, landlords should strive to be proactive. Reach out to your tenants today, tell them you're completely aware of the current situation and would want to work with them to come up with a solution that works for you both if things get bad. But for this to happen, they need to contact you as soon as possible and not wait until rent arrears are racked up.

What can you do if your tenant loses their job?

  • Assuming another person in the household still has a job, you may be able to negotiate a payment plan, provide a rent discount or allow tenants to spread out payments if they urgently need to spend money on something else.

  • Seek outside assistance:

If you're not registered as an accommodation provider, you can use myRent to help you collect payments from WINZ on your behalf.

  • There might be an opportunity turning to the bank for the tenants to get a short-term loan.

The Government has indicated that there will be more initiatives to come to assist larger scale employers with workforces that may be affected. More details are due to be announced in the days to come.

  • Lastly, landlords should review their insurance. Some might have policies in place covering for the loss of rent. Contact your insurance provider today to find out if they can assist in future.

It certainly pays to be prepared for what to come. We've put together a list of things landlords should consider now that might help to tackle some unprecedented challenges in the weeks and months to come. Read more here


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