4 options to explore if you can't pay your rent or mortgage due to COVID-19 related hardship

Article by Shantelle Santos

With 1000s of job losses due to ongoing COVID-19 lockdowns, many landlords find themselves navigating uncharted territory with otherwise reliable tenants, who suddenly find themselves unemployed and unable to pay rent. 

Many tenants in this situation have approached landlords asking for a reduction on their rental payments or even a suspension of rent until they get back on their feet. While the situation is stressful for landlords and tenants, the directive has been to talk and negotiate a solution that will hopefully work for both parties during this time.

Here are some things that landlords can look into if they find themselves or their tenants suffering hardship and financial stress due to COVID-19.

#1 See what your State has to offer

If a tenant can’t pay rent due to coronavirus inflicted job loss, it is important to note all of the feasible options outside of just pausing rent payments or offering rent reductions. Depending on the state, there are also many programs, stimulus, and rental-aid packages, which can assist tenants during this hardship. In Victoria, for example, there is the Coronavirus Rent Relief Grant, with similar grants being offered in other states to help tenants finding themselves in this situation.

#2 Rent Reduction

Laws introduced by the Australian Government allows for tenants to apply for a rent reduction during this time. Landlords, agents, and the tenants need to be in agreement when seeking a rent reduction, put it in writing, then submit it to Consumer Affairs for approval. Tenants who request a reduction will need to prove that they are going through a difficult time in order to apply.

#3 Deferring Mortgage Payments

If the tenant cannot manage a rent reduction OR cannot pay their rent at all, landlords are able to defer mortgage payments for at least 6 months (with a 3 month renewal period). Keeping in mind that the interest will be capitalised. If a tenant is able to pay a reduced amount of rent, landlords should consider a partial deferral of the mortgage.

#4 Landlord’s Insurance

Your Landlord’s insurance may be able to cover the rent depending on the policy and what it covers, if the tenant is unable to pay rent. Although the coronavirus pandemic may not be taken into consideration, it is still worth asking your insurer to see what out of pocket costs can potentially be covered by insurance. 

The coronavirus pandemic has been a difficult time for many and hardship will likely continue into the near future. It is important for the lines of communication to be kept open between both Tenants and Landlords. It’s important to remember that there is assistance and advice available out there. 

Are you suffering financial hardship, need assistance or advice? Start with some of these organisations:

For updated information on help for both Landlords and tenants check the Australian Government’s official website regularly here.

Published on 26th of July 2020 by Marty Stanowich
Marty Stanowich
Marty Stanowich


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