26 March 2020
The government has announced a rent freeze and restrictions on lease terminations in response to the Covid-19 pandemic. It has used the Covid-19 Response (Urgent Management Measures) Amendment Act to give effect to the changes.
Rent freeze
The rent freeze applies for an initial period of six months (the government has indicated it will re-evaluate at that time) for residential properties. Commercial landlords and tenants will be unaffected by the changes.
If a landlord has already given a rent increase or termination notice that comes into effect on or after the Bill comes into force (26 March 2020), this notice is of no effect. That means if you are a landlord, and you gave notice before 26 March 2020, but the increase was to take effect after that date, that notice is now of no effect.
Protection against terminations
The government has also announced that protections against terminations will apply for three months. The government can extend the initial three-month period once by order in council.
The shorter time period for restrictions on terminations reflects that these changes are a significant alteration to current landlord property rights.
Landlords will be unable to terminate existing tenancies unless limited and specific, justified, reasons apply. These reasons are when the tenant:
- substantially damages the premises; or
- assaults or threatens to assault the landlord, their family, or the neighbours; or
- abandons the property; or
- engages in significant antisocial behaviour (defined as harassment; or any intentional act, if the act reasonably causes significant alarm, distress, or nuisance); or
- is 60 days behind in rent, which is increased from 21 days (and the Tribunal will need to take into account fairness and whether the tenant is making reasonable efforts to pay the rent); or
- upon the death of a sole tenant or where the premises are uninhabitable.
Tenants still have the ability to terminate their tenancy as normal. If tenants have previously given notice to their landlord, but now need to stay in their property (because they are unable to move house) they can withdraw their notice.
If the Tenancy Tribunal has made an order terminating a tenancy that comes into effect after the Bill comes into force, that order is suspended until the 15th day after the time period that the protections against terminations apply (initially three months).
Fixed term tenancies
Fixed term tenancies that expire during the lock-down will convert to periodic tenancies upon the expiry of the fixed term, unless the parties agree otherwise or the tenant gives notice. That means that if you are a tenant and your fixed term tenancy expires during lock-down, you’ll be able to stay.
Penalties for breaches
Increasing rent within the relevant time-frame or purporting to terminate a tenancy without grounds are new unlawful acts under the Residential Tenancies Act 1986. The Tenancy Tribunal can order exemplary damages of up to $6,500 in each case.
Tenancy Tribunal Powers
The Tribunal has the power to have hearings on the papers or by telephone or video conference if required.
If you are a tenant, or landlord, and want to discuss how these changes will affect you, contact Gibson Sheat on 0800 55 44 66 or contact:
| Louise Newman | | | email Louise | | | P: 04 916 7485 |