COVID-19 FAQs for Landlords

Nick Lockhart
Nick Lockhart
April 5, 2020
Property News
COVID-19 FAQs for Landlords

As your ‘partner in property’ we’re committed to getting relevant information to you in a timely manner and, with the rapidly changing ‘COVID-19 landscape’ impacting our lives, as we knew them, such updates may arrive a little more regularly than usual.

Seasoned investors have experienced previous economic crises, experiencing first hand the impact these have had on the property investment market.

History reassures us that things do improve, therefore, navigating your way to the ‘other side’, soberly and with a level head should be your focus for now.

At best, new investors may find the prevailing uncertainty unsettling, or at worst, the current economic reality may be freaking them out completely.

If that’s you or if you have other unanswered questions or concerns about anything property, finance and/or investing, let us know and we will do our best to find the answers for you.

Leave your best contact details for us here.

As things continue unfolding with the fallout from the COVID-19 Pandemic, keep an eye out for further updates from us as we continue to send you relevant and updated information.

Changes to protect tenants and landlords alike are currently being thrashed out by the National cabinet, with progress on changes impacting commercial tenants landlords well advanced. We expect that there will be an announcement next week, designed to further support residential tenants and landlords alike.

MRD clients and staff can rest in the assurance that the Real Estate Institute of Australia and other like minded organisations are lobbying the federal and state governments to provide equal support to landlords as they are to tenants.

There are a range of measures that could ease the burden on landlords so they can be part of the solution for tenants suffering hardship.

Australian Prudential Regulatory Authority (APRA) has relaxed their lending guidelines. Some changes that are being floated as possible ways to help landlords include:

N.B. Just switching someone to an Interest Only loan, and charging the same interest rate as is offered to homeowners paying both principal and interest, would cut their payments down to about half what they’re paying now.

We have a standard offer whereby we will undertake a financial health check to look for ways that we can save you money and add value to your existing arrangements. Respectfully, you would be ‘crazy’ to not take us up on this offer, as you have nothing to lose and potentially a lot to gain; and we won’t charge you to find out.

Leave your best contact details if you want a no cost / no obligation financial health check here.

Landlord Protection Insurance:

If your Landlord Protection Insurance is with Aon, please see the following information regarding coverage. If your landlord’s protection is elsewhere you may want to call them and run past them the same Qs as are below.

We hope this content assists you in these uncertain times. Stay tuned and look out for further relevant information, they we feel could assist you, in the coming days. Stay safe!

Q.  What occurs if following unemployment due to COVID-19, a tenant wants to break their lease due to financial hardship?

A. Coverage may be available under the rent default section based on hardship, but the normal rules of termination will apply subject to the policy terms and conditions and coverage limits.

Q. Can rent default be claimed if the tenant is unable to pay rent due to COVID-19?

A. Yes, this is claimable under the rent default section of the policy. Please refer to the Landlord Insurance PDS.

Q. Can a shortfall be claimed if you and your tenant mutually agree to a reduction in the weekly rental payments?

A. No, the difference in weekly rent is not claimable as this is a mutual agreement between you and your tenant.

Q. Can rent default be claimed if you and your tenant mutually agree upon a suspension of their rental payments?

A. No, as this is a mutual agreement between you and your tenant.

Q. Are there any restrictions in place should a landlord wish to take out a new Landlord Insurance policy that might cover a COVID-19 related event?

A. From 5pm AEST, Friday, 3 April 2020, CGU will not be able to offer ‘Rent default and theft by a tenant]’ cover on new policies. The cover will remain on all existing policies.

CGU is committed to helping customers through this difficult period, so we will continue to offer cover for Contents, Loss of Rent and Liability on new Landlord Insurance policies.

Insurance is intended to protect customers from unforeseen events.  During this difficult economic period, it is likely that some tenants will struggle to meet their rental payments and that cover for ‘Rent default and theft by a tenant’ is not unforeseeable and therefore it is not appropriate to offer this cover on new Landlord Insurance policies.

This will continue until further advised.

Q. If a tenant were to die inside a leased property from COVID-19, will Landlord Insurance cover a forensic clean and property fumigation?

A. No, however clean-up costs up to the bond amount are permitted as per your lease agreement for re-letting expenses.

Q. In the case of a death of a tenant due to COVID-19, how long will rent default cover apply for if the property remains vacant?

A. Landlord Insurance is available to cover the loss of rental income due to the death of a tenant provided that tenant was the only person named on the lease.  The policy will pay up to 15 weeks rent with a six-week reletting period.  Please note that a $12,000 maximum limit applies.

Q. It may be the case that COVID-19 may cause a decline in the demand for rental properties. If the tenant’s lease is about to come to an end and I am unable to secure another tenant due to lack of demand in the rental market, will losses be covered?

A. No, the policy does not respond to rental market fluctuations.

Q. If the tenant advises the agent/landlord of a trip overseas and then abandons the property following country lockouts and falls into rental payment arrears, how will insurance respond if it is deemed a claimable event?

A. This is claimable under the rent default section of the policy. Please refer to the Landlord Insurance PDS.

Q. What is the claims process should I need to make a claim?

A. We have a 24-hour claims hotline. Please call 1800 105 900 to lodge your claim over the phone.

Still have unanswered questions? Leave your best contact details for us here.

Nick Lockhart

Nick Lockhart

MRD Property Expert
Nick is the Founder of MRD. Nick is in his element when he is inspiring, mentoring and teaching safe and responsible finance and investment strategies.

Connect With MRD Today

Book in a time to speak with one of our MRD Property experts and get some free advice.
Setup a Free Appointment

You might also like...

More on this topic

2032 Brisbane Olympics | Real Estate Wins Gold

July 22, 2021
In recent hours, Brisbane was announced as the winner and will host the 2032 Olympic Games.

Australians & Qld Real Estate Values are Heading North!

July 15, 2021
I read an article by Terry Ryder and its content inspired me to pen this (some of which is a copy and paste because he said it so well).

Sign up to our Blog

Our goal is to give you the ability to build long term wealth for your family's future. Sign up to our blog today!
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
© 2021 MRD Partners Australia Pty Ltd | All Rights Reserved. | Website & Marketing Funnel by
Merkury Logo

Book your free appointment today.
One of our friendly staff will contact
you shortly.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.