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Mar 30, 2020 4:31:43 PM

Harcourts Group offers solution for Government to help tenants

Topics: Press Release, Property Management, Australia, Landlords, Tenants, Australia Real Estate, COVID-19 1

Harcourts today welcomed the Federal Government announcement to protect both commercial and residential tenants suffering financial stress due to COVID-19 from eviction for the next six months.

Harcourts also encourages the use of the existing Centrepay facility to help any residential tenants who are struggling with their rent during the pandemic.

Last night Prime Minister Scott Morrison said all tenants would be offered a moratorium on evictions for six months in a bid to deal with the economic impact of the COVID-19 pandemic.

He said, “landlords and their tenants” effectively need to ‘sit down, talk to each other and work this out’.”

“We believe that the Federal Government could offer rent assistance to all victims of COVID-19 through the Centrepay system,” said Harcourts Australia CEO Marcus Williams.

“We are bound by a duty of care to look after both parties - our landlords and our tenants - and the Federal Government already has a system in place, and it works well.

“Given the fast-moving health and economic crisis is so complex, rent relief has not yet been forthcoming.

“No-one is evicting any tenants, but there’s massive job losses across Australia and the Government has a solution already in place, it just needs to be fast-tracked as many other Centrelink payments are.”

Harcourts firmly believes rent relief should only be administered through Centrepay, which is the Federal Government’s billing service.

“We definitely do not want any relief to be paid directly to tenants as a cash payment or even directly to the landlord, as we’ll never know for certain what assistance has been provided. The infrastructure is already in place to protect the interests of both parties and it works well,” said Mr Williams.

Currently in Australia tenants have the ability, depending on their circumstances, to apply for rent assistance.

To facilitate approved assistance payments, there is a government owned payment platform called Centrepay. The benefit of rent assistance, owed to the tenant, is paid through Centrepay directly to the managing agent.

Sadhana Smiles, Harcourts Property Management CEO, stated:

 “It is our view that if rent relief is paid by a government to a landlord directly then the managing agent nor the tenant will potentially have visibility over this,

“This could leave tenants in a vulnerable position, as landlords may receive benefits but not disclose this to management agents and tenants.

“Likewise, if rent relief were to be paid to tenants, then the payment of rent becomes the responsibility of the tenant. The same dilemma applies.

“The landlord and the managing agent do not have visibility over whether rent relief is being received and therefore administered currently.

“It is only the managing agent that is bound by licensing laws and the Property Stock and Business Agents Act that must abide by a duty of care to both parties.

“If such a program was administered by the government to managing agents it will ensure transparency and fairness for all parties.”

As part of an industry that employs over 100,000 people, all property management teams have a great responsibility and opportunity to serve communities in such stressful times like these, and are expected to remain very busy handling urgent maintenance, ensuring housing is maintained and available and consequently ensuring homelessness does not rise. 

BACKGROUND NOTES

Currently in Australia tenants have the ability, depending on their circumstances, to apply for rent assistance. To facilitate approved rent assistance payments, there is a government owned payment platform called Centrepay. The benefit of rent assistance, owed to the tenant, is paid through Centrepay directly to the managing agent.  This is a long established and efficient system which achieves several key points:

  • The government controls the rent payment
  • The rent payment is made on behalf of the tenant so that the tenant does not have to initiate the payment
  • The rent arrives to the managing agent on time
  • The rent is always received as cleared funds as the creditor is the government
  • The tenant never falls into arrears with their rent
  • The managing agent remains in control of the payment on behalf of the landlord, which means they can continue to debit their management fee and any required maintenance invoices in advance of disbursing the funds to the property owner