Fewer than one in 10 renters given satisfactory rent reduction amid coronavirus pandemic, survey finds

Fewer than one in 10 tenants who lost income amid the coronavirus pandemic have received a satisfactory rent reduction, a new survey shows.

Tenants and landlords were encouraged to negotiate rental reductions when the economic impacts of the pandemic began to bite, but a survey by Better Renting released on Thursday found the majority of renters felt they’d had little luck.

Only 9 per cent of renters who lost income had asked for a rent reduction and received an outcome they were happy with.

“What really struck me is the sheer number of tenants who are still paying their original rent despite losing their income,” said Better Renting director Joel Dignam.

“Either they weren’t confident to ask, or asked and didn’t get one. A lot of people out there are … just getting by.”

Of almost 1000 renters, surveyed between late April and mid-June, 63 per cent lost income due to the crisis, with 18 per cent losing their full income.

Despite this, only one in two of those affected sought a rental reduction, with many feeling it would be a waste of time. About a quarter of those who refrained were concerned it would result in retribution at a later date.

“Even in the context of the eviction ban … they were not comfortable asking,” Mr Dignam. “This is consistent with research showing renters are so worried about retaliation that they won’t ask for repairs.”

Some landlords met renters halfway, and others contacted tenants to see how they could help, Mr Dignam said, but the most common outcome was a frustrating, protracted negotiation process, with some waiting weeks for a response, some told to access their superannuation or others asked for reams of documentation — ultimately leading to a refusal or a deferral.

Of those who lost income, about 20 per cent were refused a reduction, 9 per cent had fruitless negotiations, 7.5 per cent were given a deferral and 4.5 per cent were given a trivial reduction. One tenant in Western Australia was offered just $5 off their weekly rent, while a Queensland tenant was offered a debt agreement with interest – and decided to borrow money off their credit card instead.

While government support payments meant some had not needed to request a deduction, Mr Dignams said this would change when JobSeeker and JobKeeper were wound back in September.

Already one in two tenants who lost income were struggling to make ends meet, while one in seven reported skipping meals to reduce living costs.

Among those dreading the drop in JobSeeker is Brisbane tenant Tara Ormsby, who previously secured a two-week rental deduction on the two-bedroom unit she shares with her teenage son after losing her part-time job.

After many phone calls, her landlord agreed she could pay half her $250 weekly rent to tide her over until the increased JobSeeker payment kicked in.

It was a short but welcome reprieve for Ms Ormsby, who had chewed through her redundancy payment and was getting discounted groceries from Lighthouse Care and food banks.

“It was a big help, but now I’m looking to the end of next month when JobSeeker will drop by $300 a fortnight, so I have to try to negotiate with my landlord again,” Ms Ormsby said.

Given her previous limited deduction and the lack of success had by friends, Ms Ormsby is stressed about further negotiations and worried she’ll be forced to move.

On the reduced JobSeeker she would have less than $30 a day for other living expenses after rent, even with the rental assistance she receives.

“I don’t feel like I have any power,” she said, adding she would like to see more done to level the playing field to help tenants negotiate.

Unfair evictions needed to be banned for a start, Mr Dignam said, and measures introduced from the National Statement on Renting and Coronavirusis – such as binding arbitration when a rent reduction cannot be agreed on.

He added significant investment in social housing was needed long term, while extending the higher rate of JobSeeker and the eviction moratorium – which is being considered by the Victorian government amid stage four lockdowns – was vital in the short term.

With current emergency rental laws to end in September, Tenants Victoria chief executive Jennifer Beveridge said she had been speaking to the Andrews government about an extension to the eviction ban and other measures, as more Victorians faced job losses.

“This is such an intensely challenging time for renters,” she said.  “We were pleased to hear from Premier Daniel Andrews this week that the government would address this pressing issue soon.”

Ms Beveridge said the take-up of rent reductions in the state had not been on the scale she would have liked to have seen, reflecting the unequal bargaining between renters, landlord and agents, and lack of public awareness among renters of their options.

As of early July,  Consumer Affairs Victoria had registered 17,852 rent reduction agreements, representing approximately 3 per cent of the total number of households renting in the state, according to an interim report on the government’s response released this week .

“We are embarking on an awareness campaign to inform renters about their rights amid the pandemic. Our message is clear: people need to go for the rent reduction ASAP,” Ms Beveridge said.