All Topics / Help Needed! / Landlord Insurance – Corona virus

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  • Profile photo of propertyboypropertyboy
    Participant
    @propertyboy
    Join Date: 2008
    Post Count: 232

    Anyone started looking at clauses in their policies or had a tenant stop paying rent due to coronavirus and start looking to claim?

    Please keep updated.

    My policy excludes government quarantined events.

    On a separate note, If landlords are to get a holiday and have to pay back capitalised debt logically I would think the same logic should apply to tenants?Otherwise the landlord takes the hit and has to pay back debt which has been delayed and write off rent not received.. I hope the government is reasonable on this.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi propertyboy,

     “I hope the government is reasonable on this.”

    Yep, me too – I’d recently heard the comment that commonsense is also in lockdown, and, though sarcastic, it did make sense to me at the time !!  Was it to do with Govts?  Not sure – I think it was more to do with the hoarding/blackmarketing of toilet paper.

    From where I sit, I would have thought that the injection of dollars that is occurring would (should?) have been to minimise the pain that is being felt all over.  Or, in other words, that we all should be tightening the belts a little, so that no one group is shouldering all of the burden.  And if Govts are saying “Give renters a holiday”, then there should be something similar for landlords.  Small businesses are getting some help – and isn’t landlording a “small business”?   On the flip side, this whole drama is monstrous from a whole heap of angles, so if Govts are needing a bit of time to get their heads together on it, I understand that – so long as they keep on correcting any “unintended consequences” that may come about as they take frantic moves to keep Australia’s head above water.

    Benny

    Profile photo of StevenSteven
    Participant
    @steven1982
    Join Date: 2017
    Post Count: 189

    And if Govts are saying “Give renters a holiday”, then there should be something similar for landlords. Small businesses are getting some help – and isn’t landlording a “small business”?

    In NZ, they are changing the phrase such as “rent freeze” or “mortgage holiday”, because those terms are being grossed mis-understood. Both of those terms created a great deal of confusions and as such, they are using different terms that have better clarity and more transparent.

    eg 1:, NZ government is now using the term “rent increase freeze” rather than “rent freeze”, because that is what “rental freeze” really is: Landlords are not allowed to increase rent for x months defined by the government, but that doesn’t mean tenant should just outright stop paying altogether. Tenants can request for rental reduction if they are genuinely affected by Covid-19 and are stressed out financially. At the other hand, there are also many people affected by Covid-19, who are getting support from government and that resulted in them getting higher income than their job, so obviously those people have no issue with continuing with rental payment.

     

    eg 2: NZ banks are now prohibiting their employees to use the term “mortgage holiday” and instead are using the term “mortgage payment deferral”, which is a more accurate reflection of what is actually happening.

     

    As for rental reduction, one particular person suggested the following. I don’t know if this is legal, but it sounds quite reasonable to me:

    ——————————————– snip ———————————————

    Rent reduction is fine. Although if tenants are having cash flow issues, I would allow them to pay less (specify what the amount is … don’t say pay what you can) and call it a rent payment deferral. Record all rent shortfalls as arrears. When this blows over, you can then decide how they catch up on the arrears or if you’re in the position to do so, you can waive some or all of the arrears.

    Don’t call it a rent reduction as you cannot put the rent up for 6 months due to the rent increase freeze that is in place.

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