COVID-19 - Who is going to save Landlords?
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Dear Prime Minister Hon. Scott Morrison,
We are writing to you as landlords of Australia with this petition.
Before we proceed, we would like to thank you and your entire cabinet for the hard work you have done thus far in steering our country from natural disasters upon disasters, first through fires, then floods and now Covid – 19.
We do this on behalf of all Australians.
We would, however, like to address the issue of landlords and the challenges we are made to face.
The issues are enumerated below:
1. We are ordinary middle class working citizens who acquired properties through years of sacrifice and hard work, often giving up our social life and we did this so that we can have a retirement income and not rely on the government for support.
2. Just as our tenants have been impacted by COVID 19, we have also been affected by it and lost our income, jobs, and businesses. Furthermore, many of us have rental properties where the rent does not cover all outgoings and are negatively geared properties
3. Therefore, we cannot financially afford to subsidize tenants by providing free rental premises as we rely on this income to help us cover the various costs of owning a property like mortgages, council rates, land taxes, insurances, property management fees, water rates, body corporate rates, maintenance, etc
4. We are unable to cover these significant losses from our minimal savings that were set aside to cover our basic living expenses, given that we lost our usual income as well.
5. It will not be humanly possible for us to survive without declaring bankruptcy if we are obliged to do so.
6. Deferred loan repayments by lenders simply adds more debt to our existing debt. For example on a loan of $500,000, extra interest being added to this loan is $59,193 for just a 6 months deferral.
7. Not all lenders are pausing loans, and many of them will only do so if landlords can prove a source of income, which is difficult given the current situation.
8. Landlords seem to have been left out of this entire equation. If we provide free rent or even subsidized rent to tenants the cashflows all the way through will be affected. For instance, we won’t be able to pay the mortgage, we won’t be able to protect our assets with insurance covers, we won’t be able to pay the council and land taxes, real estate agents won’t get management fees, tradesmen who carry out repairs won’t get jobs, water companies won’t get paid, etc It will just cause a ripple effect right through the property industry and all these companies that employ staff won’t be able to survive just because of this domino effect.
We would all like to be able to help one another in this crisis, so my proposal is as follows:
1. We propose that a rental assistance package be worked out by your Government paid directly to the landlords whose tenants are unable to meet their rental obligations because of COVID-19.
2. This will be applied only in those cases where the stimulus package already offered to tenants is not enough to meet their current costs.
3. This needs to be done not only to avoid financial losses and bankruptcy of landlords, but also to prevent the rising levels of anxiety, depression and financial stress
4. Other measures may be that all parties concerned halt recovery of any kind of fees, levies, etc. and offer subsidized rates to landlords so that we all have a level playing field.
5. Landlords can then definitely give their tenants the option to stay free for the period that the government has compensated landlords and this will ensure no homelessness for renters.
6. This will ensure harmony and peace between landlords and renters furthermore reducing anxiety, risk of suicide, depression and financial stress on both sides
7. If landlords can still pay their expenses, It will also ensure all the other companies can still maintain their employees to keep the economy going.
8. This will ensure renters are not stressed out and they just need to focus on their families and look for jobs and they will have a safe home to remain socially isolated and locked down during this period.
9. Another proposal is we suggest that the government negotiates with the lenders loans that tenants and landlords can take, at a reduced rate, with a government guarantee and for a short term period for those of us who don’t have enough savings to sustain them even after the stimulus packages are given.
Today food, hospitals and medical staff are crucial especially at this time. However, having a roof over our heads is also important and we have a lot of Australians providing private housing, so let’s remember to look after them as well.
We hope in your discussions with the cabinet that you will cover this proposal so that we don’t have to be the ultimate sufferers in this crisis.
Thank you for your consideration and we look forward to a favourable outcome for all.
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