Landlords and tenants. Sharing the burden.

Mar 27, 2020

So far it seems to me that the average Australian is more worried about the economic impact of the COVID-19 pandemic than catching the virus itself. And let’s hope it stays that way. Some businesses and people will be affected more than others. And some will be able to absorb the pain more than others.

Scomo says the burden will be shared. But will it be shared equitably, and morally? Or are we going to see a kind of financial anarchy where everyone thinks it’s ok ‘not to pay’. And then what happens?

Relaxing insolvency laws might allow those with means to be opportunistic. Our PM says landlords shouldn’t get rid of non paying tenants because ‘will they find another tenant?’. But what about the tenants who can pay!

In this last week we have been inundated with both tenants and landlords seeking advice. Some tenants are seeking a 6 month rent abatement with no impact assessment. Six months. Is that premature? And pushing a landlord too far might be disastrous for everybody. The same applies to every supplier. It seems to me we have 4 different kinds of circumstances affecting tenants and landlords:

  1. Government forced closure where the tenant can’t use the premises.
  2. The tenant chooses to send staff home due to health and safety concerns.
  3. The tenant remains but the environment and closure of other business or absence of custom reduces revenue.
  4. The opportunistic tenant who wants to take advantage of the situation.

No one solution or uniform approach can work. If the burden is to be shared then there needs to real engagement and sharing of information to understand where the hardship lies, what works for both parties, to find the sensible way through. Then maybe the burden will be shared in an ethical and moral manner. In every aspect of this crisis we are in it together. All partners if you like. With the capacity to have a positive impact rather than to destroy those around us. The sooner we realize that the better.