Have you lost your job as a result of COVID-19? There could be ways to negotiate a reduction on what you’re paying for your home. Here’s how to write a rent reduction letter.
Experts have tipped Australia’s unemployment rate will reach 10% (or more) off the back of the coronavirus (COVID-19) and the resultant shutdown of businesses across the country.
COVID-19 may have caused you to lose your job or work fewer hours. Maybe your employer has asked you to defer your salary for a period. Whatever the circumstance, encountering financial difficulties can be stressful – but so is asking for a reduction in one of your most significant bills – rent.
If you’re struggling to pay your rent, it’s worth asking your landlord/property manager for a temporary reduction in what you’re paying.
The Federal Government recently placed a six-month moratorium on rental evictions. This moratorium is to help those “unable to pay rent due to financial distress as a result of the COVID-19 pandemic.” But, as with most things around tenancy legislation in Australia, there’s no one rule for rent reductions.
The Prime Minister, Scott Morrison has said all parties (that means tenants, landlords and banks) will need to work cooperatively. Implementing rental assistance measures is up to different state and territory governments.
Where the difficulty lies
In most cases, landlords and tenants will operate in good faith, but there are those who (depending which side they’re on), will:
– Use COVID-19 as an excuse not to pay rent, or pay much less rent than they can afford; or
– Will use COVID-19 as an excuse to try to squeeze more money out of vulnerable tenants.
Many tenants around Australia are out of work or facing reduced hours/pay for the foreseeable future. That said, plenty of renters won’t be able to pay their full rental amount. So what’s an acceptable rent reduction amount, and how do you ask for it in a letter or email?
How to ask for a rent reduction
At this point in 2020, if you haven’t been affected financially by COVID-19, then you should continue to pay your rent as per usual to the full amount and on time. But if you have had your income reduced, or seen a fall in the number of hours you can work, you’re within your rights to approach your landlord for a rent reduction.
A landlord will know that it’s better financially to accept less for a short-term period in exchange for a happy, long-term tenant. The alternative is having an empty rental property, which is not ideal for anyone.
Important: When you ask for a rent reduction, do it calmly and respectfully. When you write a letter or email to your landlord/property manager, be as reasonable and polite as possible.
What to include in your rent reduction letter
- How much money have you lost? Include details about your financial situation and how much your income has fallen as a result of the crisis.
- Show proof of your financial situation. It’s worth including a payslip from your employer or communication that states you’ve been let go from your job/forced to accept fewer hours or pay.
- Explain how much you’re willing to pay in rent. This amount will depend on your financial situation.
An example rent reduction letter
Is your landlord or agent willing to negotiate? Draft an email to your property manager and ask for the rent to be the new lower price you worked out.
Remember, this letter needs to address your issues in a positive tone and get the negotiations off on the right foot. Think about having someone you trust to read over your email before you send it to ensure you sound friendly and your spelling and grammar is correct.
Your property manager may ask you to chat about the rent reduction over the phone, but it’s definitely worth sending the initial email. Your agent may also be busy and may prefer to negotiate on email. If you provide the specifics of what you’re after, you’ll make it easier for them to pass your request onto the landlord.
I’m contacting you about my weekly rent payments for Unit 1, 23 First Avenue in Subiaco.
My financial circumstances have changed significantly because of COVID-19, due to the government’s advice to close all restaurants. I worked as a waitress and recently lost my full-time employment. My original income was $800 per week for 38 hours per week, but I’m now receiving $450 per week through the JobSeeker allowance. My overall income has reduced by $350 per week.
I want to discuss the possibility of reducing my weekly rent payments by $250 per week for the next two months. A rent reduction will help get me back on my feet once restaurants are permitted to open again.
Please find attached proof of reduced hours from my employer, the fortnightly JobSeeker allowance and proof of prior income upon signing the lease.
I can appreciate that you may also be experiencing financial hardship at this time, and I look forward to discussing the matter further with you.
Not affected by COVID-19, but prices are dropping?
Think carefully about how much your rent should decrease. What’s the average rent for similar properties in your area?
How long would you like to stay in your rental property? Are you looking to keep your lease for another few years? If you offer to sign a longer lease, this could be an attractive option for the owner and they may be willing to provide a small discount to keep you on.
Keep in mind that every state and territory has varying rules on this – chat to your tenant advisory service if in doubt.
If you’re planning to move soon, your landlord is unlikely to agree to a rent reduction. The upside is that there’s nothing stopping you from choosing not to renew your lease, providing you given the required notice.
You might also like:
– Know the value of your property and suburb with RentReports
– Rental applications: How long before I’m approved for a property?
– Australia’s cheapest (and most expensive) suburbs revealed