Ray White offers solution for government to help tenants

Ray White Group Managing Director Dan White 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.

He also encouraged  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”.

Mr White said the Federal Government could offer rent assistance to all victims of COVID-19 through the Centrepay system.

“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,” he said.

“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 have been 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.”

Mr White said the real estate industry firmly believed rent relief should only be administered through Centrepay, which is the Federal Government’s billing service.

“It’s not practical for relief to be paid directly to tenants as a cash payment or even directly to the landlord, as as managing agents, 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.”

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.

“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 not 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.”

Mr White said that 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 our 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.

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 a number of 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
• The managing agent continues to be paid