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Rent freezes - what does this mean for landlords and tenants?

Rental Property Property Management Investments Landlords Tenants Property Brokers News

Property Brokers 27 Mar 2020

Rent freezes The Government has announced a freeze on rent; the rent levels are to be frozen for half a year due to the spread of the coronavirus in New Zealand.

So, what exactly does a rent freeze mean? Landlords have been instructed that they will not be allowed to increase residential rents for the next six months. Additionally, tenancies cannot be terminated during the lockdown period without an agreement.

If tenants have lost their jobs, and require support, we encourage them to talk to their landlord or property manager at their earliest convenience to see what financial assistance is available to them.

It's important to note that tenancies cannot be terminated during the lockdown period (unless both the landlord and tenant agree, or in limited circumstances).

Fixed-term tenancies will change over to periodic tenancies upon the expiry of the fixed term (unless both parties agree otherwise; or the tenant gives notice).

If tenants had previously given notice to leave, they would be able to remain in the property they're renting during the lockdown.

Previously, landlords could terminate tenancies if tenants' rental payments were 21 days late. The updates now mean that termination can only take place after 60 days.

Other grounds for termination are substantial damage to the premises, significant anti-social behaviour as well as assault or threatening behaviour towards the landlord.

These tenancy termination rules will apply for three months but could be extended.

Tenants are still able to terminate tenancies as per usual, we are encouraging them not to, unless absolutely necessary, we're asking them to think about whether they are managing the risk of spreading COVID-19 in doing so.

Failure to comply with the new law could see people fined up to $6,500 by the Tenancy Tribunal.

Is having COVID-19 grounds for a landlord to terminate a tenancy? Tenants are not required to notify their landlord if they test positive for COVID-19. Tenants are, however, encouraged to advise their landlords of this to protect them in the event that a visit to the property is required, to undertake urgent repairs, for example.

These changes mean that in the short term, families and individuals who are tenants do not lose their home due to a drop in income related to job losses through Covid-19.

It is essential to highlight, that tenants should not abuse the current situation by refusing to pay rent when they have the capacity to do so; or by causing significant property damage, or significant anti-social behaviour. Tenants will still be fully liable for their rent payments as well as any damage.

The measures rolled out by the Government balance the protection of the interests of tenants and landlords as well as the wider community during this unprecedented time.

We all need to work together in these unprecidented times, and help each other to fight Covid-19. This is a time for compassion; equally, it is a time to communicate clearly with all parties. No matter who we are working with, our number one priority is, and always will remain, our clients, staff and safety.

Along with all Kiwi's, we are proud to do our part in helping to ensure that New Zealand beats this virus, and are looking forward to being able to get back to our normal lives as soon as possible.