It’s been a tough few years for renters and landlords alike – contending with Covid-19 lockdowns and restrictions has affected the rental market in ways that were difficult to foresee. 

In South-Western Sydney, where the state’s harshest lockdowns were felt, the tight rental market coupled with the falling away of governmental financial support systems means that there are still significant numbers of renters who are struggling and subsequently affected landlords. 

The NSW Tenant’s Union has released a report titled Eviction, Hardship and the Housing Crisis, which looks at the impacts of the Covid-19 pandemic on affordable renting and ways in which residential tenancy systems can be strengthened to better respond and prevent it from reaching crisis point. 

The report notes that state tenancy laws were likely never up to the task of supporting renters at the end of the 2021 Eviction Moratorium. Several recommendations are included in the report, but the one most likely to require a significant change in the private sector is the recommendation that calls for a mandatory landlord insurance scheme.

The report notes that “In many other businesses and professions insurance is a requirement of operation.” The placement of insurance in these sectors provides cover for a range of circumstances and makes sure that businesses can meet their legal responsibilities. “Common examples are compulsory public liability insurance, workers compensation, and professional indemnity.”

The Tenant’s Union believes that introducing a mandatory landlord scheme would offer benefits on several levels. While it sits separately from building insurance, which is almost always in place for residential properties, the union says that according to “industry sources a majority of landlords in NSW (around 70%) do not have a ‘landlord insurance’ policy.”

The union believes that implementing a mandatory insurance scheme would ensure that hardship provisions would mean that landlords would be better placed to respond to tenant financial difficulty. Additionally, the union believes that coverage against the loss of rental income, which is not always included in landlord insurance policies, should be included as a standard insured event. 

The belief is that with these provisions in place, landlords would be better equipped financially to meet essential legal responsibilities and assist in reducing the risk attached to property investment. 

The Insurance Council of Australia is yet to respond to the report by the union. 

Published On: February 24th, 2022 / Categories: News /

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