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  • Writer's pictureMelanie Dennis

Residential Rent Negotiations During COVID-19

During COVID-19 the Government has directed landlords to negotiate rents for tenants in “Severe Financial Hardship” What does this mean exactly?

…..Well there has certainly been no assistance from the Government in working this out! Essentially it is up to the owner and tenant to decide.

It is important to have strong systems and procedures in place for when a tenant requests assistance with rental payments or vacating – and that is for both Property Managers and Owners who manage their own properties alike.

Just because a tenant askes for a certain amount in reduction, does not mean that is what they should be given…..and sometimes does not mean that is what is needed either.

It is unfortunate that some people are taking advantage of the situation as that means we need to make sure there is proof of the severe finance hardship that a tenant is suffering. From our tenants we expect to be provided with bank statements, loss of job or wage reduction letters from employers and the past 3 payslips at a minimum.

If a tenant is suffering from severe financial hardship due to COVID-19 they should also have applied to CentreLink for Job Seeker and Rent Assist. These details should also be provided for proof of hardship. Tenants may also be receiving the $750 per week payment through the Job Keeper program.

If the tenants rent exceeds 30% of their income, they earn less than $100,000 per annum and have less than $5,000 in saving they may also be eligible for a grant of upto $2,000 from the Department of Health & Human Services.

Another avenue to look at is if the Landlord is subject to land tax payments, they may be eligible for up to 25% reduction. This has to be then passed on to the tenants for the landlord to be eligible. We recommend finding out total of your land tax, working out the 25% amount and then offering this to your tenants. The balance of the landlords land tax can also be deferred until 2021 but we caution our clients of this as it will need to be repaid along with 2021’s land tax owing.

When negotiating rent reductions the above payments need to be taken into consideration along with any money that might be earned. If the rent is 30% or less of the total household income then no reductions in payments should be needed. If it is above 30% any reductions given should bring the rent payments to this level.

Reductions can be in the form of waivers or deferments – depending on the landlords financial situation also. Another option for owners who are struggling during COVID-19 there is also the option to defer your mortgage repayments.

For more information on this check out my recent interview with Phoebe Blamey from Clover Financial Solutions here

For our owners at Domain & Co. if you haven’t heard from our team then all is tracking along as per usually with your property and your tenant. If your tenant contacts us for a hardship claim we will let you know as soon as they do and the next steps involved. So no news is good news at the moment!

And if you haven’t downloaded my FREE guide yet on  the 5 STEPS YOU CAN TAKE to avoiding loosing rent during this COVID-19 pandemic click on this link

I hope this article has been useful for you and if you need any further information do not hesitate to contact me directly on or 0416 218 003. You can also find me on WhatsApp under Mel Dennis. I look forward to talking with you and assisting with your property needs 😊


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