Landlords are the ones left to deal with administrative challenges and red tape as a result of rental protections and support packages, the Real Estate Institute of New South Wales (REINSW) has warned.
As an extra four weeks were added to the duration of the Greater Sydney lockdown, the NSW government announced an extension of its residential tenancy support, including up to $3,000 in support for landlords losing income.
While the support package sounds good, REINSW CEO Tim McKibbin warned that landlords may be bearing the brunt of the responsibility.
“There has been some recognition that this financial support is the government’s duty to provide, instead of the burden falling on landlords,” he said.
According to Mr McKibbin, the government’s approach puts landlords in a “zero position”, meaning they’re expected to become an enduring entity and navigate a series of administrative challenges while also unravelling considerable red tape.
“Landlords must educate themselves on the grants program, ensure they apply correctly, obtain the tenant’s consent to send their personal information to Fair Trading, obtain separate consent from the tenant that their changed circumstances qualify for the landlord to ask for a rebate, then hope Fair Trading agrees the tenant’s claim is valid,” he said.
“It’s onerous, it asks mum and dad investors to unravel considerable red tape, and it relies on landlords providing the reduced rent up front.
“Then the challenge of reclaiming the lost income begins, with break-even the best possible reward for their effort.”
Mr McKibbin also questioned the scenario when the maximum $3,000 threshold is reached, and both tenant and landlord have exhausted the government support available.
“In this scenario, it’s unclear whether this financial stress will be borne by the landlord, tenant or both, should government not commit to further support in the event of lockdown being extended again,” Mr McKibbin said.
Amid this backdrop of challenges, red tape and uncertainty, mum and dad investors are still expected to meet bank repayment deadlines.
As such, the CEO has urged the government to recognise that “a secure rental accommodation environment requires support on both sides”.
He said: “Rental vacancy is tight, those looking for places to rent have limited options, so it makes sense to encourage people to invest in property and provide rental accommodation.
“Unfortunately, when there’s too much politics at play, the opposite is often the result.”
Mr McKibbin’s concerns come after the Property Council of Australia expressed similar dismay regarding the “unfair and costly” commercial rent waivers reintroduced in NSW amid the ongoing lockdown.