many covid 19 regulations are unfair to landlords

Many COVID-19 Regulations Are Unfair To Landlords: JLL

GLOBAL – Governments are urged to provide equal support to both tenants and landlords, as neglecting either can have dire consequences, reported JLL’s The Investor on Thursday (1 October).

According to the property consultancy, countries across the globe have introduced various emergency legal and fiscal policies to mitigate the economic impact of the COVID-19 pandemic.

Each government has adopted their own rules, leading to a plethora of policies pertaining to rent relief, returning to work, and guidelines on payment forbearance, as well as assisting lessors or tenants gain access to loans & grants.

“Many of these relate in some way to either direct fiscal support or regulatory suspension of the standard legal requirements around the tenant-landlord relationship,” said Jeremy Kelly, Global Research Director at JLL.

For example, the Singapore government has provided cash grants and tax rebates to property owners leasing space to small and medium-sized enterprises (SME), whose gross income plunged by over 35 percent between April and June 2020.

In Australia, lessors can qualify for a discount of up to 25 percent on their land tax liability for 2019-2020, as long as they help their tenants and the value of their support is equal or greater than the tax discount.

Over in the United Kingdom, retail, hospitality and leisure companies can receive a cash grant of up to £25,000 (US$32,000) per property. Across developed economies, moratoriums on evicting tenants renting commercial property including office space due to non-payment of rent are now prevalent.

Kelly noted that many of these COVID-19 regulations are pro-tenants. Amidst the weak demand for office space and commercial space in many countries, this group now has a stronger bargaining power over landlords.

Consequently, there are worries over the status of property lessors, who seem to have been neglected in some countries, as government measures commonly involve direct financial support to lessees, or a ban on landlord enforcement actions to collect rent.

Although some markets like Singapore, Australia, and the Netherlands have introduced initiatives to support landlords, other countries around the world have failed to enact measures providing commensurate support to property owners, he said.

Such a situation is fraught with peril. It can have negative repercussions on local communities, companies and the broader economy, as landlords and property developers are a substantial source of tax revenue in advanced economies. Not only do they make sizeable investments in local infrastructure and services, they employ many workers and provide pension benefits, added Kelly.

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