Finance Property Victorian real estate agents push back against calls to block rent reductions

Victorian real estate agents push back against calls to block rent reductions

The REIV and Daniel Andrews are at loggerheads over the return of real estate activity in Melbourne. Photo: TND
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Victorian real estate agents are resisting calls to refuse rent reductions in response to a “double whammy” caused by the Andrews government’s coronavirus roadmap.

The Real Estate Institute of Victoria (REIV), which represents more than 2000 businesses across Victoria, urged members on Sunday to refuse rent discounts until the government engages in “genuine consultation” to reintroduce one-on-one inspections.

Claiming the government has supported tenants more than landlords, REIV urged agents to protest against the Premier by forcing every request for a rent discount into the tribunal dispute system.

But several large agencies have already defied the call.

Representing major agencies including Ray White, Raine & Horne and Harcourts, the Real Estate Industry Partners said it will ignore the advice of the REIV and advise its members to conduct ‘good faith’ discussions between landlords and tenants.

REIP CEO Sadhana Smiles supported the REIV’s calls to reintroduce private inspections to encourage some buying and renting activity.

But placing “undue stress” on an overcrowded complaints system would not produce that outcome, she said.

“If we push our clients onto an overloaded VCAT environment, which is already processing around 4000 cases, that’s not fair,” Ms Smiles told The New Daily. 

REIP CEO Sadhana Smiles says there are more productive ways to negotiate an agreement with the government. Photo: Harcourts

“A more productive course of action would be to sit with industry leaders and work out a plan on how we can do COVID-safe private inspections for both rental and sales property.

“That would allow a level of transactions to allow clients – whether they be mums and dads, tenants or investors – to be able to move because the current impasse is creating additional financial stress.”

Wakelin Property Advisory director Jarrod McCabe told The New Daily his firm shared the REIV’s frustration, but would also not follow the blanket advice on rent discounts.

Despite the industry showing that inspections could be conducted safely and with minimal risk during Stage 3 restrictions, he said it’s unfair for agents to pass their grievances on to landlords and tenants.

“It should be at the landlord’s discretion whether they want to negotiate an acceptable reduction or move to arbitration,” Mr McCabe said.

“You just can’t force either party into that position, because we’re here to give independent advice on what’s the best way to help landlords work with their tenants, and that can only be done through good faith negotiations.”

Currently, no in-person inspections are allowed in Melbourne until at least October 26, while a moratorium on rental evictions was extended last week for an additional six months.

REIV CEO Gil King said the industry group had seen a rise in “illegal rent-strikes with no consequences”, and would refuse to discuss rent discounts until “balance and common sense is restored”.

“What we experienced was the classic example of ‘tick-box consultation’; that is where you put your case forward but are not listened to, with government effectively ticking the box that required consultation,” Mr King said.

“Private inspections are far safer than going to the supermarket. No one watches me there and wipes down the Corn Flakes packet that I pick up and then return to the shelf.”

Victorian Council of Social Services CEO Emma King said in a statement on Tuesday the REIV should reverse its “misguided, callous and dangerous directive”.

“Intentionally undermining this process is a kick in the guts for renters,” Ms King said.

Meanwhile, Tenants Victoria CEO Jennifer Beveridge said she was “disappointed” by REIV’s call, as ‘good faith’ negotiations help landlords as much as tenants.

“At a time when all of us are being told to stay at home, renters who’ve lost income and jobs are doing it really tough and those who’ve lost income and jobs need support,” Ms Beveridge said.

Under changes to Victorian tenancy laws, landlords who provide rent relief could receive a 25 per cent discount on land taxes and also up to $3000 through renter hardship relief grants.

Consumer Action Law Centre CEO Gerard Brody said the REIV directive may contravene real estate agent conduct regulations that require agents to “make every effort to minimise and resolve disputes”.

“If agents follow the advice of the REIV, they may find themselves in breach of the law,” Mr Brody told The New Daily. 

Federal shadow minister for housing and homelessness Jason Clare rebuked the REIV’s calls, telling The New Daily now is “the time for common sense and compromise”.