Wind up emergency tenancy provisions now - REINZ
Friday 12 June 2020
REINZ chief executive Bindi Norwell
Emergency tenancy provisions introduced because of Covid-19 are now doing more harm than good so it’s time to bring them to an end, the Real Estate Institute says.
By Miriam Bell
On 24 March as New Zealand was going into lockdown, the Government announced emergency legislative measures which were designed to protect tenants.
One of the measures was an immediate six-month freeze on rent increases.
The other measure ensured it was not possible to terminate tenancies during the lock-down period, except for a limited set of reasons. These include substantial tenant damage to a property, anti-social or violent tenant behaviour and over 60 days of rent arrears.
Additionally, tenants who had previously been given notice were allowed stay in their rental property if they needed to during the lock-down period.
This measure was put in place for three months, or until at least June 25, unless extended.
REINZ chief executive Bindi Norwell says that, at the time, the measures were important to protect tenants from rental increases and ensure that people were not left homeless during lockdown.
But the reality is that the situation in New Zealand has now moved on dramatically since the legislation was first implemented.
“With no active cases of Covid-19 in the country and 20 days in a row of no new cases, we would argue that the emergency legislation has served its purpose and should be ended immediately, or at the latest by June 26 which was the end of the initial three-month period.”
Norwell says the legislation is now doing more harm than good, with a number of negative stories appearing in the media to this effect.
“Additionally, we’ve had examples from our members where tenants are seriously in arrears with rent and - unlike landlords - have the protections the emergency legislation has provided them, with delays in securing a Tribunal hearing only exacerbating the situation.”
She cited the example of a landlord who had to sell their rental property due to financial hardship. The purchaser of the property required vacant settlement, but the landlord was unable to provide this due to the emergency legislation.
“Now the owner is having to pay penalties in the region of $20,000 until they can provide a vacant property to the purchaser. The mortgage ‘holiday’ scheme does not cover these sorts of issues and the entire process is costing them financially and adding to their stress and emotional wellbeing.”
Another example brought to the attention of REINZ is a couple who have lost their jobs as a result of Covid-19. They are unable to afford a rental property but they are unable to give their tenants notice to move out of the rental property they own, so they are now living in accommodation without heating and a shower.
In yet another example a pair of landlords are living in a caravan with their daughter, as they are unable to move into their own property despite serving their tenants with a 42 notice prior to lockdown.
Norwell says they have also been told of situations where tenants are refusing to pay rent, despite receiving the wage subsidy, with the knowledge their tenancy can’t be terminated.
Further, members are reporting multiple issues around termination and possession orders or mediated orders with a consequential termination clause given by the Tribunal before 26 March 2020 not being enforceable until 15 days after 26 June, she says.
“We appreciate that it may have been difficult for the Government to have foreseen the extent of the negative impact of the emergency legislation on landlords and tenants when the legislation was first implemented.
“However, the consequences have become clear in the past weeks and that’s why REINZ is calling on the Government to bring these emergency provisions to an end immediately.”
A Tenancy Services spokesperson says that, as the June 25 date is approaching, they are expecting an announcement regarding tenancy terminations from the Minister soon.
Meanwhile, the freeze on rent increases remains in place until September 25, unless extended.
However, NZ Property Investors Federation executive officer Sharon Cullwick says they recently received information that rent increase notices can now be given as long as the increase takes effect after 25 September – again, unless the freeze is extended.
Comments from our readers
Sign In / Register to add your comment
Uncertainty continues to cast its shadow over the housing market but economist Tony Alexander has put together a list of reasons which offset the negatives and mean the market remains well-supported.
Global ratings agency Standards & Poors is the latest to join the chorus of predictions around potential house price falls in New Zealand – and they’re picking a 10% drop.
Auckland ’s long-term future is sound as well situated residential developments will always sell and demand for affordable housing remains strong, a leading non-bank property financier says.
New mortgage borrowing rose by roughly $1.6 billion in May as the property market showed signs of recovery from the Covid-19 lockdown.