COVID-19: Update on residential rent freeze and ending a tenancy
July 6, 2020
Prior to this year’s lockdown, the Government acted quickly to ensure that as many Kiwis as possible had the ability to isolate, #stayhome and save lives.
Effective March 26, the Government passed emergency legislation which placed an immediate freeze on residential rent increases for 6 months. It also increased protection for tenants against having their tenancies terminated during this same period. These changes were enacted under the Residential Tenancies Act 1986.
The rent freeze remains in place up to and including September 25. However, the extra restrictions on ending a tenancy have now been lifted.
Rent Freeze – what you need to know
Increasing rent during the 6-month period March 26 to September 26 is unlawful and can result in a maximum fine of $6500.
You can issue a rent increase notice, but the increase will not be able to come into effect until September 26 (unless further legislation is passed).
Closer to September 26 the Government will decide whether to extend the rent freeze.
If you decreased rent during the lockdown or subsequent alert levels, it is lawful to reinstate this to the original amount.
Tenants remain responsible for paying all rent in arrears. Ideally landlords and tenants will be able to agree on a repayment schedule. If this cannot be agreed on, the matter can be referred to the Tenancy Tribunal.
For more specifics on the rent freeze, the Ministry of Housing and Urban Development has provided these Q & As.
Ending a tenancy – what you need to know
Effective 26 June the Government returned to the usual tenancy termination rules. Under the emergency legislation, a tenancy could not be ended except by written mutual agreement of the landlord and tenant, or under specific conditions. These included:
Substantial damage to the property
Threats/assault against the landlord/landlord’s family or neighbours
Significant anti-social behaviour
Abandoning the property
The tenant being 60 days behind in rent. This was an increase from the usual 21 days.
If you now need to end a tenancy you can give notice from 26 June. Information on ending a tenancy and different notice periods can be found on the Tenancy Services website here.
For further information about the transition back to the original tenancy termination rules, the Ministry for Housing and Urban Development has created these Q & As.
Working together
New Zealand has done an incredible job of stopping the spread of COVID-19. But the economic impact of global lockdowns will have a very long tail. There will be some Kiwis who will bear the brunt through business closures, job losses or reduced hours.
In other words, these could be difficult times for some. If there is an issue, most often the best outcomes - for both parties - will come from working together to find a solution.
The information in this article is provided to summarise and is of a general nature. If you have any residential property/tenancy questions that we can help you with, please get in touch.