Covid-19 Update April 2020

Covid-19 - Lockdown

New rental legislation was rushed through and is now active. The summary is with this email. Key changes:
   • All rent increases, even ones already notified, are cancelled and banned for 6 months.
   • For the next 3 months tenants are able to go into 60 days arrears (up from 21) before the Tribunal will terminate the tenancy.
   • They have also severely limited the grounds to end a tenancy.
   • Fixed term tenancies will convert to periodic if the tenants want it.

Impact for owners

The government has little understanding of the standard processes involved in tenancy matters. Our Prime Minister hammered Quinovic for pointing out to their tenants that they will still get 14 day notice letters for arrears, and she even wants the “names” of landlords not being nice enough! The PM and Housing Minister do not appear to know or care that giving a 14 day notice for arrears will be required for tenant hardship applications to WINZ, and is necessary to establish the rental debt with the Tribunal. The news media doesn't have much to report on now, so expect beat-ups like this on property management companies and landlords.

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Tenancies which were due to end have now had their notices cancelled by the new legislation. The existing tenants will be liable to pay the rent and have to give their notice again if they don't change their minds about moving out. Fixed term tenancies will convert to periodic unless the tenant wants a fixed term again.

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Landlord actions

We will notify owners when their tenants are having trouble paying the rent, and let you know what we can about their plans to get back up to date. Many of our landlords are quite generous in these times, but we strongly urge you not to make any concessions or rent relief agreements directly with tenants. In the event of the tenant not being able to keep up their end of payments, you could lose out even more. The time to be generous is once we have a negotiated repayment agreement, and include any rent reductions you want to offer with that. Given the circumstance and legislative changes, it would be prudent to have a buffer in case of having your rental income deferred until later. In the next few days the banks will formalise their 6 month mortgage holiday plans, and you might want to consider taking them up on this. After all, if you don't need the extra buffer in 6 months time, you can always repay it.