It is an unusual time for everyone as new legislation is pushed through state and territory parliaments to better support landlords and tenants during this unprecedented period.
While it is designed to make lives easier, there is understandably a bit of confusion around exactly how the changes are set to impact the management of rental properties and what part insurance plays in it all.
To assist our clients, we have outlined all the key changes in each state and territory – you can find that info here. We have also started to answer all the FAQs we have been getting around the topic and listing them below (we will update this page, and add questions, as things change).
Can’t find the answer you are looking for? Touch base with the EBM RentCover team at email@example.com.
My tenant has stopped paying rent, but we can’t evict them. How does my EBM RentCover policy respond?
Our RentCover Ultra and Platinum policies offer the below coverage:
- Rent default – up to six week
- Tenant hardship – up to six weeks
When it comes to making a claim, the loss needs to be substantiated (proven) and the insurer needs to see that steps were taken to minimise the loss. This could be in the form of a series of emails between the tenant and agent/landlord, a history of payment in the rental ledger showing attempts to make payments (where possible), or a copy of the newly agreed upon payment plan or rent reduction (if applicable).
During this time, government directives should be followed. So, the first step is for tenants and landlords to work together to find a solution – one that is agreed upon by both parties. If that fails, contact us and we can talk you through options to submit a claim.
If the landlord refuses to work with the tenant to find a solution, a claim may be void because they haven’t followed government advice. Note – the tenant must be impacted by COVID-19 and must have sought all government support to get on their feet. We may ask to see evidence that the tenant has applied for all the government options available to them.
My tenant has stopped paying rent, but we can’t evict them. When can I submit a claim?
You should submit a claim when you suffer a financial loss, and after you have exhausted all options available to you to try and restart or recoup the rental payments. This one is a little trickier than others… Typically, tenants would have vacated a property before a claim is made for loss of rent. If you experience this situation and you haven’t been able to find relief with any of the state/territory-based relief packages, negotiations or mediation, give us a call and we will work with you to submit the claim.
I have been told not to serve arrears, and breach and termination notices. Does this void the policy or impact our ability to claim?
Historically, breach and termination notices and tribunals were the main ways we saw property managers and landlords reduce the loss. The best guidance we can give is: act like the client doesn't have insurance at all and take any reasonable steps available to you to reduce the amount of loss. This is a new world we are living in, and we all must adapt. Here are a few things to consider...
- Work with your tenant to find a solution – follow the advice provided by the state government that your investment property is in
- Unfortunately, insurance won’t cover the difference of a rent reduction. However, if your tenant fails to make good on the newly agreed-upon rental amount, you may have a claim
- If the tenant refuses to work with you at all, keep a record of these dealings (this will help us when settling claims)
We need to see proof of a loss in order to substantiate the claim, and see that you tried to minimise the loss where you could. This could be a series of emails between the tenant and agent/landlord, a history of payment in the ledger showing attempts to make payments (where possible), or a copy of the new payment plan or rent reduction (if applicable).
My tenant has asked for a new payment plan. What happens if I agree but they fail to make payment? Can I still claim?
Yes, rent default would assist in this circumstance, as the payment plan is a legally binding agreement between the tenant and the landlord. If the tenant fails to keep up their end of the deal, and the landlord suffers a financial loss, a claim could be submitted. You will need to provide supporting documents around the payment plan, including correspondence that references how it was set up, the agreed-upon payment terms and proof the tenant has failed to comply.
My tenant wants to break their lease because they have lost their job. Can I make a claim?
This depends on the legislation in your state and if the laws passed negate the lease terms. If the State your property is in has passed laws that allow tenants to break the lease without ongoing responsibility for the tenancy agreement (meaning they don’t have to pay anymore rent or break lease fees) it is unlikely you can make a claim. The tenant actually needs to owe something to the landlord, for the policy to respond.
*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are there, contact 1800 661 662 if you have any questions.
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