Covid-19 | Cubbi's Learnings
With approximately 10% of tenancies on Cubbi affected by COVID-19, we think there is value in sharing our learnings:
- Common Ground | This core principle of Cubbi has been present throughout. It has been encouraging to see the extent which Owners and Tenants have been working together to reach acceptable agreements for both parties. No tenancy has had to utilise a State's Dispute Service to reach an agreement.
- No one-fits all solution | Owners have at times contacted us to see if there is a set 'standard' change to the rent they should apply. With multiple external factors at play, there is no one rent change structure that will work for all. This is where it's been heartening to see both Owners and Tenants understanding each others' position to come to an agreement. We have put together a detailed Cubbi Help Doc providing guidance to Owners and Tenants: Rent payment issues during COVID-19.
- Rent Reduction vs Payment Plans | The key difference between a rent reduction and a payment plan, is that with a rent reduction agreement, the difference between the original rent and reduced rent is not owed at a later date.
- For example, if there was a 20% reduction from $1000 per payment to $800 per payment, the Tenant would not owe the $200 difference per payment. With payment plans, the $200 rent difference is deferred to be repaid at a later date, meaning the full rent is still due.
- Cubbi has seen a 70% vs 30% split between rent reduction agreements and payment plans.
- Rent reductions have varied from 5% - 100% (one-off reductions), commonly reductions are between 20% - 30%.
- There has been timescales ranging from single payment reductions through to longer-term reductions up to 6 months. Reduction periods are commonly 3 months.
- The general theme is the longer the reduction period, the lower the % reduction.
- Landlord Insurance | As Landlord Insurers have had to be reactive to State legislation changes, there has been discrepancies and sometimes contradictions between Landlord Insurers vs State Legislation. For example, Insurers in some cases still require Breach Notices to be served, but States have explicitly advised that such Notices carry no legislative weight during the ' emergency period'.
- It's easy to point the expectation of change towards Insurers. This is not the case. There is however hope that Insurers will be able to be more fluid with the policy applications for required claims.
As a online management platform, it's been good to see the role of PropTech coming up with viable solutions. For example, Cubbi Users are now able to upload Video Walkthroughs with their ads and arrange Virtual Routine Inspections.
In the last week, we have seen a reduction in the requirements for rent amendments. We hope this is a reflection of more positive news to begin in the coming weeks and months.
This is a working document, that we will continue to update as further learnings are made.