The Real Estate Institute of NSW has expressed serious concerns over news that some insurance companies are making things difficult for Australian landlords, with tenants economically affected by the COVID-19 pandemic.
In a statement issued to the media, REINSW president Leanne Pilkington flagged some landlord insurance policies offering cover for rent default are “preventing landlords from complying with government instructions to negotiate with their tenants”.
Ms Pilkington said she was disappointed “that insurance companies are not stepping up to support policyholders”.
“Landlords have been asked by the government to negotiate in good faith, yet the insurers are saying they will not honour their rent default cover in the policy if the landlord voluntarily agrees to a rent reduction,” she said.
“To preserve the insurance cover, the landlord must refuse to negotiate in good faith which will force the tenant to take the landlord to NCAT and seek an order from NCAT to reduce the rent.
“Effectively, if the landlord agrees to reduce the rent for their tenant then their landlord insurer abandons them. This is clearly an appalling requirement and contrary to spirit of what is required across the entire community.”
Ms Pilkington said she and the REINSW are calling on the government to take necessary action.
“Landlord insurance companies have made millions of dollars from landlords over many, many years, and now that it’s time to make a claim, the insurance companies abandon the landlord,” she said.
“We are calling on the government to direct the insurance companies to respond to the claim when the landlord has agreed to a reasonable reduction in the rent, or that the landlord, at their option, can compel the insurer to take over the negotiation.
“That way, when the landlord negotiates an outcome with their tenant, if the insurer wishes to call a halt to it, then the landlord can give the insurer the right to take over the negotiation.”
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Emma Ryan is the deputy head of editorial at Momentum Media.
Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.
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