News & Insights

Agent wants help for landlords and tenants

May 14, 2020

Agent wants help for landlords and tenants

Thursday 14 May 2020

Supporting local businesses.

PROPERTY manager Nichols Crowder is lobbying Frankston and Mornington Peninsula councils to help landlords and tenants by deferring property rates and dropping marketing levies.

Director Michael Crowder says councils, banks, utilities, insurers and governments “should be waiving or freezing payments – interest free – in line with the mandatory code-of-conduct”.

“In this way the costs a [landlord] saves can be passed on directly to their tenants.”

Mr Crowder wrote to the councils asking them to waive the marketing and promotional fund levy for commercial businesses. Mornington Peninsula Shire had not responded by Friday 1 May, but Frankston Council refused to remove the 25 per cent levy on the basis that “businesses can afford it and it is tax deductible”.

If Frankston dropped the levy it would mean the council would have to take the “unpalatable” decision to increase residential rates.

“We are not advocating for an increase in residential rates at all. We believe they are too much as it is. We want the council to reduce [them],” Mr Crowder said.

“We would like both councils to defer the balance of [their] 2019-20 rates in line with the banks with no interest charged and we want a commitment rates will not be increased in 2020-21.”

Mr Crowder said COVID-19 had made it a “very difficult time both for landlords and tenants”.

“None of us knew [the pandemic] was coming, we couldn’t prepare for it, we can’t control it and we have no idea how long it’s going to last,” he said. The “emotional and financial impact it is having on our clients, tenants, staff and family is unprecedented”.

Problems were exacerbated for agents “trying to get our heads around all the various state and federal business support packages”, Mr Crowder said. These ranged from business support funds, tax relief packages, the JobKeeper program, cash flow assistance packages and now the federal government’s mandatory code-of-conduct for commercial tenants.

“In the first few weeks [of the pandemic] it was changing by the hour. It was very difficult to keep up. Then we would get constant updates from owners, their accountants, solicitors, the REIV. As with any legislation they all had a different opinion.”

The mandatory code which came into effect on 3 April has given agents a set of good faith leasing principals applying to landlords and tenants. Once legislated, tenants registered for JobKeeper can apply for rental assistance, but under strict rules relating to breaches of lease and turnover.

“Ultimately, tenants need to demonstrate to an owner (or their agent) how much their business has been affected by COVID-19 and that means providing financials,” Mr Crowder said. “It must be sufficient and accurate so an owner can make an informed decision.

“Once we have such information, agreements will be reached around rent payable, rent waivers and rent deferrals. In most cases variations to extend leases will be entered into to protect both parties.

“If agreements cannot be reached the Victorian small business commissioner will be the final arbitrator.”

Mr Crowder said while new rules stated tenants cannot be evicted for six months, they must continue paying rent. “As the Prime Minister Scott Morrison said: ‘Leases entered into are still legally binding’,” he said.

“The big issue for agents is that we are the middle men, we are not financial advisors and it’s very difficult keeping both landlords and tenants happy. There’s no winners or losers here but tenants and landlords must work together and share the pain.”

Mr Crowder said landlords had to cope with mortgages, rates, taxes, and maintenance fees which cannot be waived – only deferred.

“Some of our clients are having to forego 75 per cent of [their property’s] rental for six months, which is never to be paid back, while the balance is amortised and paid back over a minimum of two years,” he said.

Managing these issues are real estate agents whose staff are “on the front line”. “There is a misconception that property managers have no concern for tenants or that they have no feelings,” he said. “Quite the contrary, our staff are wonderful, kind, loyal, hardworking people. Mums and dads with children.

“We have a difficult job. Most of our clients and tenants are great and understand this situation is not of our making while others are angry and abusive. You sometimes see the worst in people when their backs are to the wall.”

He said his staff were “dealing with about 300 emails and 200 phone calls a day. We would just ask for everyone to be kind, patient and understanding. We will get through this together.”

First published in the Southern Peninsula News – 12 May 2020

Put your property with the Leaders of the South East

We’re proud to lease and sell, through auction and private sale, hundreds of commercial and industrial properties annually. Beyond that, our property management services extend across Melbourne, into regional Victoria and interstate. Our quest for innovation, real experience, unmatched database and the fact that we’re the only commercial and industrial agents with offices that stretch from Bayside to Moorabbin, Braeside to Dandenong and Carrum Downs to Mornington Peninsula has made us the Leaders of the South East.