‘Real pain’ to hit landlords and tenants in eight months
A BIG Gold Coast lease manager for residential and commercial property predicts the real pain of the coronavirus pandemic will hit for tenants and landlords in eight months.
Real Specialists Commercial founder Jared Hodge, whose 90 staff look after several thousand residential property leases and hundreds of commercial ones, said the crunch would come in about six to eight months when deferrals of rent came due and bank deferrals of loan payments with added interest hit.
"You can see what is going to happen in eight months time - the pain will kick in."
Mr Hodge said after a month since small business was largely shutdown just about every day for property managers was "a bad day".
He revealed his firm was already dealing with several million dollars in arrears across its whole management book.
"Our arrears have gone through the roof - we are talking a couple of million dollars. There are some landlords that can afford it but some can't."
Prime Minister Scott Morrison has outlined guidelines for a six-month coronavirus business "hibernation" strategy to ensure as many operations and staff come out the other side of the pandemic intact. It includes a code of conduct for landlords to guard against lease terminations due to the virus shutdown.
Mr Hodge said people generally had little sympathy for landlords but "some owners are old, have no other income, don't qualify for anything".
"Every scenario with each landlord and tenant is different. This is not like the Global Financial Crisis. With that it was 'You haven't paid, you can't, you are over exposed and you get shut down'. This is different - landlords and tenants are in the same boat.
"If everyone comes together and discusses it and is honest, it would be easy. But that is not how the world works."
Another Gold Coast property manager said about 10 per cent of commercial tenants were using the virus shutdown as an excuse to avoid rent obligations when they were not as badly impacted as they made out: 'They go 'Screw you, not paying rent'. And we say 'But you are still operating' and they say 'Screw you, there is nothing you can do for six months'."
Originally published as 'Real pain' to hit landlords and tenants