REIQ Chief Executive Antonia Mercorella has successfully led a call from QLD Real Estate Leaders and Landlords to fight back against the Queensland Government’s COVID-19 relief proposal that was heavily weighted towards tenants.
When PM Scott Morrison announced a 6-month moratorium on evictions for Australian tenants that had been impacted by COVID-19 and the national shut-down the majority of Real Estate Professionals embraced the call. However alongside that protection for tenants facing financial pressures, there was also the understanding that fair and reasonable arrangements could be made between tenants and landlords to ensure the financial burden was equally dispersed. Many industry leaders including property management business Investarent Director Michelle Watt have been speaking out against potentially lopsided protections.
The Queensland Government’s initial proposal seemed to disregard the fact that a large portion of QLD landlords were Mum and Dad investors with their own financial repercussions as a result of COVID-19 and not multimillionaires who could carry the burden of unpaid rent. REIQ CEO Antonia Mercorella was a key player in the fight to come to a fairer arrangement that would take both tenants and landlords into account.
Key Issues of Initial Proposition:
- The Queensland government’s proposition was heavily weighted in the direction of renters, at the landlords’ cost
- Housing Minister Mick de Brenni said the guidelines would detail what a fair rental fee was to be paid based on the degree of effect a tenant had experienced and included:
- A six-month freeze on evictions
- A waiver on rental payments
- And a ban on non-essential inspections and maintenance
- Real Estate representatives were arguing that rent-free durations as proposed by the QLD government were unfair as they didn’t allow for landlords to recoup losses or negotiate to terms
Ms Mercorella was incredibly active in advocating for equal rights of landlords as demonstrated by regular Facebook live appearances, and drafted a template Landlords could send through to QLD Premier the Hon. Annastacia Palaszczuk MP.
“Our Government is saying that if you need to negotiate a rental reduction, you can do so, but that then becomes a permanent reduction,” Ms Mercorella said, highlighting one of the key issues in the State’s proposal and one that took a different route to the rest of the country.
“It’s also inconsistent with what other Australian jurisdictions have done — they have adopted a rental deferral system.” – Antonia Mercorella
Director of Brisbane based Property Management Agency Investarent, Michelle Watt was one of a number of Queensland Real Estate leaders who were disappointed with the initial proposal that expected landlords to take the brunt of pandemic financial pressures.
“The reality is the vast majority of my clients are Mum and Dad investors, dealing with their own financial pressures and the QLD Government proposal made it seem as though everyone who owned an investment property was a multi-millionaire who could fit the bill of struggling tenants.”
Mrs Watt who has been overseeing the management of Brisbane properties for 20 years was in initial shock at the disparity between QLD and the rest of the State’s and believed the Federal Government’s directions weren’t followed.
“Obviously through Investarent, we were aware early on of the 6-month moratorium which I had no issue with as we don’t want to see anybody who was struggling go without a home, what the issue was is that unlike every other State the opportunity for the Landlord to come to an arrangement with tenant’s facing COVID related hardships was going to be taken away, in my opinion that was a massive injustice to landlords and my clients whom I care about deeply.”
Mrs Michelle Watt, who is an industry leader in QLD stated that the initial proposal went against everything that she was always fighting to maintain for her own clients.
“The proposal was simply going to pass the burden from the tenants to the landlords, which meant the issue wasn’t going to be resolved, but just transferred from the tenants to the landlords, which was something myself and my client were vocal about and fought hard against from the get go. My entire business is built around ensuring my clients are looked after and then something like this happens that has a pretty unfair approach. It’s nice to see through constant lobbying, common sense did prevail and we now have a workable framework moving forward. I like to think that my owners and I played a role in that.”
Mrs Watt said that she was very proud of the effort put in by the REIQ as the peak industry body in QLD and Ms Mercorella in particular and admired the result she was able to achieve.
“I do a lot of work with women in Real Estate and Antonia’s composure and prompt action really embodied everything that I stand for and try to do for my own client’s. When the initial announcement was made a lot of my time was taken up with damage control and questions.”
As of the 22nd of April an announcement was made that new regulations had been passed, including an emphasis on a tenant – landlord discussion that would be able to come to a suitable arrangement for both parties. The major legislative change included a Three-Step criteria that tenants could go through of which if they satisfied they would be able to request a rental reduction.
Part 1 – Tenants would be seen to have significant hardship if one of the following applied and can move forward to Part-2
- They or someone they care for has COVID-19
- Subject to quarantine direction
- Public Health direction has closed their employment or restricted their employers trade or business
- Self-isolating because they or someone they live with or a primary carer for a vulnerable person
- They are unable to work because of travel restriction imposed under health direction prevents them from working or returning home
- Prevented from leaving or returning to Australia
Part 2 – Has the tenant suffered a loss of income of 25% or more?
Part 3 – Is the rent payable 30% or more of a persons income?
Covid-19 protections will apply if they meet part 1 and either 2 or 3.
“These questions are relevant as they will decide whether a tenant meets the threshold test” Ms Mercorella said in a Facebook live announcement on the 23rd April.
Tenants can request a reduction, with the new policy encouraging parties to come together to negotiate an arrangement.
“The statement that you couldn’t ask for documentation has been changed. Property managers or owners should be able to ask for the same kind of application at the outset to determine the tenant has financial capacity”
The final decision has ensured QLD landlords would be able to work through suitable arrangements with tenants and neither party would have to face immense financial burden.
Special thanks to Michelle Watt of Investarent for speaking to The Researcher team.