Improving landlord-tenant relationships

Improving landlord-tenant relationships

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A hardship fund for landlords and government guidance on acceptable practice in resolving disputes are just some of the ways the landlord–tenant relationship could be better supported, a leading housing institute has claimed.

The recommendations came as a result of a report by the Australian Housing and Urban Research Institute (AHURI) which studied the lived experience of landlords and tenants during the COVID-19 pandemic.

The Post-pandemic landlord-renter relationships in Australia report showed that during the height of the COVID-19 pandemic, uncertainty and inequalities become key features of the landlord–renter relationship.

For many Australian households, lockdown measures meant an almost overnight income decline, job loss, or reduction in hours of employment, leaving many households struggling to meet their everyday living costs.

In addition, the data showed that what AHURI termed as a “generationally-important” number of Australian households faced uncertain housing futures reflecting pressure on both those living in rental accommodation and those who owned it.

“The labour market and economic impacts of the pandemic quickly manifested in the rental sector, where tenants faced eviction (or even homelessness) because they were unable to pay their rent, and many landlords were, as a result, at risk of defaulting on their investment loans.”

Tenants experienced greater changes in their employment status during the pandemic, with job loss and reduced hours. This meant tenants experienced hardship, with immediate and future challenges meeting rental payments. Tenants also reported they were monitoring costs, reducing spending and even selling belongings.

Perhaps unsurprisingly, this meant the stress levels tenants faced during this period were significantly higher than landlords. Many received various forms of financial support from partners, family and housemates, with government support unavailable for some.

Tenants in small accommodation and/or with multiple housemates found working at home challenging, and many moved during the pandemic for a variety of reasons, which was both challenging and stressful for most.

But the news wasn’t all bad.

In terms of positives, the report also discovered that in many multi-occupancy buildings residents became a closer community during the pandemic, and tenants reported that undertaking indoor or outdoor exercise, as well as more home cooking, had been beneficial for their mental health.

The report says that while federal and state government support packages – such as JobSeeker and JobKeeper, the early release of superannuation and a moratorium on evictions and rent increases – had been well received, there were still many issues as a result of the pandemic that required addressing.

“Overwhelmingly, landlords thought government action had not adequately considered them and gave tenants too much power. Many landlords, for example believed that their tenants had claimed financial hardship without adequate proof. Although JobKeeper and JobSeeker were regarded by tenants as effective support, few discussed any housing-focused government support.”

From a policy perspective, AHURI says the findings show there is a clear need to improve the rent and hardship negotiation processes, and for the landlord–tenant relationship to be helped by a more structured negotiation framework.

As such, the report also contained a number of other recommendations for policy makers to consider, including:

  • Developing a protective negotiation framework to structure rent negotiations as a more formal process
  • Clear government guidance for real estate agents, to provide clarity, guidance, and information on acceptable and unacceptable practice in resolving landlord–tenant negotiations
  • Centralised guidance on tenant hardship, as to how to demonstrate hardship and how this is assessed
  • Policy flexibility on moving, that reduces stress and the risk of homelessness for tenants that give 28 days’ notice and commit to moving
  • Improved information and guidance in defining the end of support, such as protocols for rent deferral repayment plans

By focusing on improving the success of negotiations in the landlord–tenant relationship, both the economic and mental wellbeing of tenants and landlords could be significantly improved, the report says.

“Such support could consider all aspects of the negotiation process, from how negotiations should be initiated, to assisting agents, tenants and landlords by outlining acceptable and unacceptable practices during negotiations, as well as providing further information on future uncertainties.”

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