Government backs rent strike!

Via the AFR:

Finance Minister Mathias Cormann has flagged that commercial and residential landlords will have to wear some of the “pain” by granting rent relief due to the coronavirus economic downturn, as governments prepare to lead by example and waive rent for business tenants.

Ahead of a national cabinet meeting of federal and state leaders, Senator Cormann also flagged a third economic rescue package would be announced in the “next few days”, on top of the $189 billion in government spending and central bank lending measures taken so far.

After today’s video meeting of the prime minister and premiers, governments are expected to lean on landlords to give relief to commercial and residential tenants who lose business and employment income due to large swathes of the economy going into virtual shutdown.

So, there you go. Stick it to your landlord.

Via The Australian:

In one of the single biggest blows to the nation’s embattled retail sector billionaire Solomon Lew has announced the shock closure of all stores within his Premier Investments business, which includes popular fashion chains such as Just Jeans, Portmans, Dotti, Peter Alexander and Smiggle, with the loss of more than 9000 jobs.

Premier said it intended not to pay any rent to landlords during the shut down, triggering a possible battle with shopping centre owners.

It’s global, via Bloomie:

Major U.S. retail and restaurant chains, including Mattress Firm and Subway, are telling landlords they will withhold or slash rent in the coming months after closing stores to slow the coronavirus, according to people familiar with the situation.

In a brewing fight, chains are calling for rent reductions through lease amendments and other measures starting in April, said the people, who asked not to be named because the discussions are private.

These moves mark the next phase in virus fallout: What happens to billions in rent owed for businesses that have been closed? The stakes are high. Retail has a slew of big chains in turnaround mode. And if they do withhold payments, there would be a ripple effect. Landlords can’t afford to stop collecting rent for long, with many property owners sitting on loads of debt.

And what’s good for the goose is good for the gander is it not? Previously from Guy Rundle at Crikey:

The Centrelink lines are going round the block, the government has made vague announcements of rent assistance, twitter buzzes with notes from the newly laid-off wondering how they’ll put food on the table and pay the rent and the mortgage.

Here’s a suggestion. Do the former by omitting the latter.

If you have lost most or all of your income, or are about to, don’t pay your rent, don’t pay your mortgage. Write to your landlord or bank and tell them you won’t be paying for the next X months, and that you don’t regard this as a deferral, but as non-rent/non-mortgage months.

There’s a silver lining to every turd dropping from heaven, and the shining fringe around COVID-19 is that it will make it clear just how much of our economy is composed of dead value, non-productive ownership and the payment going to it: the rent.

The rent and the mortgage swallow up 30%, 40%, 50% of our incomes. They go into the maw of a property system whose prices have been ludicrously inflated by the privatisation of urban land development, land banking and the hidden inflation of a decade of quantitative easing; pumping trillions into a global economy in which neither production nor full-time jobs rose to anything like the levels intended.

So don’t pay it. Or negotiate a sharp reduction. Or negotiate a figure which covers part of the rates and part of maintenance and repair. If the landlord says they have a mortgage to pay, tell them to go on mortgage strike.

After the virus comes the revolution.

David Llewellyn-Smith
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Comments

  1. Market forces. The other side of Capitalism, debt and risk. It has to be this way.

    I will be calling the tenants union next week, then asking for a substantial rent reduction from my residential landlord, citing genuine hard times.

    Welcome to the other side of real life.

    • Spoke to my tenant yesterday. Asked if they where able to pay the rent with all this going on. They have savings and said they will be able to apparently. I have a mate and his tenant has lost his job and stated to him that he won’t be able to pay the rent shortly as the dole was not enough to cover it even after its been doubled and that he (landlord) should do the right thing and drop or stop the rent. My mate has a massive loan and needs the rent to make the repayments. No rent no house. My Mate also said if he does not pay the rent to me and I still have the house in six months after the eviction ban stops, He will gone. That is promise he said.

        • The point is if the tenant does not pay the rent he is going to lose his accommodation. Not now but definitely is six months. Either because the landlord had to sell the house or because the landlord holds a grudge.

          • ApproachingZero

            After your friend kicks him out, the tenant will move into another property owned by a desperate landlord willing to take any money he can get. Your friend will then get a tenant who was kicked out of another property for not paying his rent because your friend will be desperate for any money he can get.

            See how that works?

          • Point BreakMEMBER

            So home owners should get a holiday but renters keep getting bent over? Why should property owners be given a free ride anyway? It’s called risk. Are equity investors getting a free ride? No refunds for them. Let the property market implode so renters that want to buy can.

          • #Point Break, what “holiday” are property owners getting? THERE IS NO HOLIDAY. you can DEFER your payments to the bank, that is it (pending some other announcement).

            Rates = pay it
            Land taxes = pay it
            Strata = pay it
            maintenance = pay it,
            insurance = pay it
            mortgage = defer for up to six months….. then pay it all back + interest on interest.
            rent = yeah na, just pay your netlfix and iphone bill instead, sweat as bro

            Getting it yet?

            References to equity markets totally miss the point, your dividends are cut and capital value falls because some of these business are closed. what you are talking about is like telling that business to stay open, give it’s customers services and products but NOT charge them for it. Or telling nurses that they need to go to work for the good of the nation but hey, the hospitals don’t need to pay you for it.

            Grow up.

      • That last sentence of yours is a mess, it needs some repairs, but I think I know what you mean.

    • I was waiting for the Lords of the Land to be covered in some way by the government for their loan repayments. It would have been absolutely normal for them not to pass on that cover to their scum renters. They will be shocked if they are told to.

  2. There’s a world of difference between giving rent relief to a small shop and giving rent relief to Woolworths.

    Businesses with turnover of more than $50 million should surely have the financial strength to withstand this. This could turn out to be yet more Big Corporate welfare.

  3. TailorTrashMEMBER

    I hope they have an ICU bed for Reusa ……..he is going to to be in severe shock ………

  4. reusachtigeMEMBER

    I’ve planned for this over recent weeks. Have contracted some serious heavies. They are getting to work as I write. There will be no rent relief without coming to a special arrangement. As I get “told” they aren’t paying I’m not even responding. I’m sending in the heavies. That decision is quickly reversed. All good. Cheers!

    • These are not ordinary times old fella, I think you’ll find it hard to retain these heavies after they start seeing their comrades on the wrong end of a kebab knife handled by a desperate tenant protecting their patch. I’m fine with my rent payments, but if I wasn’t and some landlord resorted to heavies instead of being reasonable, I’d take great offence and respond in kind.

  5. My Chinaese landlord has treated me like dirt for years, while we never missed a day payment and maintain the property and yard better than any house in our street. Impossible to get him to fix anything. Now I just do it all myself and even pay for the materials. Its easier than fighting with him.
    I really hope the government legislates a 3 month waiver of all rents. It will be a pleasure to watch him explode with anger.

    • As long as it’s a waiver or reduction, and not an accruing deferral.

      A holiday for a mortgage holder is not the same as a tenant – it’s worse for the tenant.

    • I wish we had had you as a tenant – we had the opposite scenario. Wilful destructive tenants in Sydney who new how to play the system. Couldn’t get them out without going to court and it cost us thousands. Of course they could get public funding – talk about a waste of taxpayers money. We live interstate and NCAT has no jurisdiction hence had to go the Court. Been awarded some costs but now have to try and recover from them. Absolute scum.

      • I often wish I had a decent landlord. My mum is a landlord and I know she’s a decent 1. Just as many bad tenants as there are landlords. I can relate to the original comment above. I used to fix stuff because the landlord had no interest. Then when we moved out he wanted to retain the bond. He gave up within 24 hours though as he had no leg to stand on.

        • Despite the property we rent being in better condition now then when we moved in (because of us) I know the landlord will try to take our bond. However because this is so obvious, my record keeping and evidence would make a crown prosecutor proud.

      • I never understood why people would damage the house that they have to live in. They have to live there? It makes no sense why you would do that.
        Its the same as when you see some people in housing commission homes that look like a bomb went off inside. There is no financial cost to put stuff away and keep the house tidy, or clean for that matter.

    • How about we give the tenants what the landlord is getting, a loan to cover costs that must be repaid. The government could easily loan rent HECS style for repayment later.

      • Jumping jack flash

        With debt as cheap as it is, why not just borrow the money for rent from the bank?
        In fact if this was a thing, then imagine how high rents could go!
        Imagine the investment return if it was paid for by someone else’s debt!

        Banks should definitely set up low interest rental loans. You could borrow a lease-load of rent and then pay it at once, repay the interest only, or principal.

        Then it wouldn’t matter what the rents were, you just get the debt that’s required to pay them.
        It’d be just like when buying a house.
        Rents to the moon! Investors would all pile back in!
        The economy would be saved!

    • Keep us posted – and make sure to take a pic of him exploding. Won’t be pretty – but it should be quite a hoot.

    • Dave666
      I also rent from a Chinese. Your experience is similar to mine. Never repair anything, fight over everything and anything. My experience with a Chinese landlord is I would never rent from one of these chunts again.
      If house prices start dropping we will be getting back into the market so I might just stop paying rent and claim hardship. F them. They can keep the deposit. Would take them longer to kick us out than the 4 weeks the deposit is worth.
      My Chinese landlord is geared to gills so any cut or stop in rent may make them a forced seller. Now that would be funny.

  6. I trust that Mathias is also willing to take some pain and have a cut in his ministerial salary? Ditto all the others and not to mention public servants and ministerial advisers.

    • Cut in ministerial salary? You’re dreaming …

      That said, when all this is over and the dust has settled, the national accounts won’t be looking too flash so cuts of some sort will have to made – could be staff, could be an across-the-board haircut. Let’s see ..

    • It would make sense. The banks are still charging interest on the 6 month period in question. It just get deferred and added to the capital. So the long gets bigger and takes longer to pay off. Not really a holiday for landlords.

      I’m not a fan of the rentier class, but it seems harsh to keep a tenant who is not paying to live there when you’re accruing more interest.

      As a home owner I’m not getting any holiday from paying the mortgage. Thankfully it’s very manageable.

  7. You know what? Landlords have been receiving social benefits for decades.

    Think you don’t have a social obligation? Think you should be able to resist the very significant and very real economic forces afoot, especially those facing your tenants?

    Why should the negatives of Capitalism not apply equally to the landlord? Or, even more so, since they’ve taken the speculative risk, and had government perks…

    Think again.

    Hand back your years of tax perks, and then we can legitimately talk about what demands you can justifiably make of tenants.

    Else, market and social forces are legitimately on the side of tenants.

    • I’ll give you my previous landlords phone number, perhaps you can explain it to him? He was totally oblivious to the helping hand he’s been given. Not only that but he was completely opposed to land tax.

  8. This is going to be a “feel good” type thing where the reality will be the tenants screwed over every which way, for sure the landlords will claim that the tenant is not paying and claim the tax / mortgage relief.

    When it comes to RE, GREED is king.

  9. Jumping jack flash

    “Landlords can’t afford to stop collecting rent for long, with many property owners sitting on loads of debt.”

    As long as I’m employed I intend to pay rent. My landlord is retired, has no mortgage and depends on our rent for his income.
    According to him his other tenants are months behind in rent, but you never know he could just be saying that so we pay ours on time. These boomers are pretty cunning.

    If the rent goes up anytime soon I will be very unhappy though. There is no reason to raise the rent, the utility of the property has not been improved to justify any increase, and it would be gouging plain and simple.

    In fact, with no additional investment or upkeep, rent should be lowered over time as the property ages.

    • I agree with you, my mum is a boomer landlord and has no other income stream since her assets make her ineligible for the pension.

      I also agree lack of maintenance should mean no increase or even a decrease. Thankfully I’m not a renter anymore, but I will still be paying my mortgage (P+I) over this period. No holidays for me.

    • Sadly the land value goes ahead more so than the actual value (via utility) of the actual property goes down.

  10. I would normally never invest in a house as shares are my thing and I hate the pain in the arse tenants who expect something in return for the rent each week other then the house its self. I did however inherit a house from the old man when he died. I only keep it as the tenant had been in it for 15 years and did not want to leave which would have happened if I sold it, as it would get developed. The comments on here seem to be from bitter renters who have missed the house price increase for what ever reason or have a shitty landlord.

    • It’s the bad landlord and the bad real estate agent/property manager. You cannot underestimate how many bad one’s there are and how onerus it is to deal with both of them. I only rent through a handful of agencies I know are good, I have no way to know if the landlord is good/bad. The last 3 rentals I’ve had all switched to a new shonky real estate mid lease. All 3 tried to take my bond at exit, all 3 lost at mediation/tribunal and it was evident that they had no idea on what the actual laws were. All 3 properties sat empty for months after I vacated. Landlords really need to choose property managers carefully.

      • +1
        And it’s amazing how many landlords think that because they paid a sh*tload for their property that somehow that automatically translates into their property commanding above market rates.

    • FUDINTHENUDMEMBER

      Our landlord is half decent people. Doesn’t change the fact that rental values just gapped down along with property values (following incomes). Not my heckin problem if someone else is carrying loads of debt.

      Just signed a new lease pre-RONA. We’re cashed up, and have very little stuff. If it makes more financial sense to break lease, move on and save the $$$, then we will. Not like there’s gonna be any real work around here for 6 months plus.

      It’s completely up to landlords discretion if they want to work on cheaper rent. But i’d say you’d want to do what you can to hold on to good tenants, if you’ve got them.

  11. Maybe it’s time to feed the poison pill of giving temporary tax/grant relief to landlords for giving rent holidays but in return removing negative gearing from them.