The impact of tenants not paying their rent can lead to short term and long-term problems
In such uncertain times it’s probably fair to say that many are feeling nervous about their future and their finances. Community housing providers are experiencing first-hand how nervous some tenants are feeling, with some choosing not to pay rent.
As a result of the recent COVID-19 health crisis, it is understood that some tenants will find it harder to pay their rent because of job loss, reduced shifts at work, not having sick leave while under quarantine, or increased health and carer costs, while still trying to manage regular living expenses and bills. Also, that some tenants who are normally reliable with their rent payments may suddenly find themselves having to choose between paying rent or paying for other essentials. Despite all the uncertainties, tenants have been assured that they have access to income support and rental assistance during this period to support them during this time.
Tenants not paying rent
The impact of tenants not paying their rent can lead to short term and long-term problems for both tenants and the Community Housing Providers. If rents aren’t paid, rental arrears will accrue, which may be difficult to pay off. We understand that tenants don’t want to face high bills, evictions or a bad rental history.
Rental income goes towards a number of items including taxes, rates, refuse collection, water and sewage connection and upkeep maintenance and renovations. As For Community Housing Providers Rental income is used to provide services in the community and pay staff and associated costs and the wide range of services they provide. As they are not-for-profit organisations funds that they receive are reinvested back into their organisation, to provide services and to increase housing supply.
Continuing to pay rent is important
We have been advised that some tenants believe that rental payments aren’t necessary, as National Cabinet has agreed to a moratorium on evictions over the next six months, to ensure that people can continue to live in their homes. This is not true. Continuing to pay the rent is important. If this is difficult during this period it is important for tenants to discuss this with their community housing provider to see what assistance can be provided. These are unprecedented times. We know that some tenants may be impacted negatively as a result of the COVID-19 outbreak. We know that community housing providers through understanding issues, are open to supporting their tenants during this period.
Tenants who are employed and/or have financial capacity to pay should continue to pay their rent as per normal responsibility. If tenants fail to pay rent without communicating this, it may still be considered a breach of a tenancy agreement.
To mitigate any risk of people losing their tenancies during this period, some options that can be progressed include;
- Early communication between tenants and housing providers to understand issues and to develop an agreed payment plan;
- Discussing arrangements such as a temporary freeze or reduction of rent and re-assess these as required;
- Focusing in cases of severe financial hardship focus on how the tenant can stay in the home;
- Demonstrating the impact of COVID-19 on rental payment – For example, a communication from an employer that a tenant has lost their job.
The following information may provide assistance and information during this period:
- COVID-19 Information
- Government Rent Assistance
- Tenancy WA – Tenants Advice
- Financial Counsellors
- Energy Bill Assistance
- Family and Domestic Violence Tenancy Related Support
- Tenants FAQ and Consumer Protection
Tenancy WA are currently developing information for tenants in response to the COVID-19 crises. They will circulate this information to assist with this issue.
 Department of Mines, Industry Regulations and Safety. 2020. COVID-19 Tenancy FAQ.