The Covid-19 Response (Urgent Management) Act, that went through Parliament and was given Royal Assent in a single day (May 25, 2020) was intended to “put in place the necessary arrangements in order to implement Covid-19 alert level four”.
Schedule 5 of this Act spells out the draconian measures that froze or changed rental property processes to do with unpaid rent and tenancy terminations for three months. These include measures that mean:
1. Tenants can stop paying rent for 60 days before any consequences. This is up from 21 days.
2. Owners face a fine of $6,500 if they give notice or apply to terminate a tenancy.
3. Tenants may stay in a property despite having given notice and without regard to the rights of a new tenant who has signed an agreement to rent the property.
There is an option to extend the tenancy termination provisions for a further three months, which would take us to a period after the election.
We are now in level two and will soon be in level one. If the rental property provisions of the Act were set up for level four, and since we are no longer under those restrictions, surely the rental property provisions of the Act are already redundant.
These harsh, anti-landlord measures appear to have nothing to do with Covid-19 and everything to do with the current Government implementing its controversial amendments to the Residential Tenancies Act without having to get them through Parliament.
This is an affront to democracy and it rides roughshod over the rights of New Zealand’s rental property owners, many of whom are leaving the sector.
This exodus is happening at a time when the waiting list for a state house has soared to 16,309 (more than double that of 2017), and after the Government has failed to deliver on its promise to build 30,000 affordable homes in three years.
In the links below are some news stories which look at some unintended consequences of the Covid-19 Response (Urgent Management) Act, as well as how some have coped with the authoritarian crackdown on residential rental property.
But there is no data is available on how owners had to sneak around dealing with tenancy issues during the level four lockdown at a time that housing was deemed non-essential and rental property owners were locked down and unable to perform basic functions legally.
Neither is there any data on the extent of additional rent arrears incurred during the Government’s Covid-19 panic, or on how owners tried to defuse anti-social behaviour knowing that authorities would only deal with an extreme consequence, such as the recent boarding house murder (see below).
Tomorrow, Cabinet should tell New Zealand’s 290,000 rental property owners and managers that the rules that apply to rental property will be those of the Residential Tenancies Act without the now redundant Schedule 5 of the Covid-19 Response (Urgent Management) Act.
If New Zealand is safe enough to return to level one, it goes without saying that should be no extension of the freeze on rental property processes for a further three months to September 25, which is after the election.
Some unintended consequences of the freeze on residential rental processes:
How some coped during the freeze:
*Mike Butler is a Hastings-based owner and manager of rental properties. He is also the founder of Stop the War on Tenancies.