‘This is purely a courtesy notice’: Email ‘threat’ to tenants as property market puts squeeze on renters

An Adelaide real estate agent says a letter warning of possible rent increases because of the city’s tight property market should not be taken as a threat to tenants.

Property managers say they are being inundated with prospective renters amid surging property prices in Adelaide spurred by low interest rates.

Magain Property Management at Ascot Park sent out an email to tenants this week warning that rents could increase by up to 10 per cent when their leases expire because of Adelaide’s “hot market”.

“Please understand this is purely a courtesy notice we are sending out to all our tenants in order to give them as much notice and information about the current state of the South Australian property market,” the company wrote in the email.

“Do not take this as a formal notice of a confirmed lease renewal.

“Given the above information and the greater possibility of a future rent increase, we are simply encouraging our tenants to keep doing a great job with their rent payments and maintenance of their property.”

South Australian Council of Social Service CEO Ross Womersley said “no-one is going to read this as anything but a threat to their tenancy”.

“In fact there would be a really strong argument for renters to be saying … ‘But your costs haven’t actually increased. You’re probably refinancing very quickly, trying to reduce your own overheads, so why are you then insisting that you’re going to have to increase our costs as a renter?'”

He said increasing rents was “simply exploiting the capacity of the market”.

“They’ve enjoyed and they enjoy very cheap finance at this point in time and they’re enjoying very good rentals on their properties already,” he said.

Aim to educate tenants

Magain senior department manager Kylie DePalma said the letter was about educating tenants about the market “just to prevent bill shock, really”.

“With the current rental market being as busy as it is, and rents increasing, it’s just more of a heads-up that this could be a possibility,” she told ABC Radio Adelaide.

She said the agency had only received one negative response, and it should not be seen as a threat.

“Everyone interprets things differently, I guess,” she conceded.

“If they’ve been a great tenant, I’m pretty sure the landlords will look after them,” she added, and said no tenants were being evicted.

Coronavirus laws prevent evictions

Under laws put in place during the coronavirus emergency declaration in South Australia until the end of May, tenants cannot be evicted for not paying rent if they are under “severe rental distress as a result of COVID–19”.

Landlords can also not increase rent if the tenant is “suffering financial hardship due to COVID–19”, according to the State Government’s Consumer and Business Services department.

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Shelter SA executive director Alice Clark said people could go to the South Australian Civil and Administrative Tribunal for disputes or contact RentRight SA for help.

Valley View landlord John, who called into ABC Radio Adelaide, said he would be an “idiot” if he did not attempt to maximise the return on his property investment.

“I’m in the business of getting the best yield I can … on my investment and to build my nest egg for my retirement,” he said.

“It’s the government’s job to provide affordable housing.”

A tenant who texted in said they had received the email from Magain.

“I received this exact same email yesterday and was very concerned in reading it,” the person said.

Shelter SA put out a report last month which found there was a “high volume of speculative vacancies — homes withheld from the sales market but not used”, including more than 1,000 in the CBD that were not being used for long-term accommodation.