Dealing with rent arrears
(updated on Monday, October 05th 2020)
Our tenant has not paid for six weeks and was in arrears before that. He has not been paid by his employer since lockdown and has not even been paid for his final fortnight of regular work despite his employer receiving the wage subsidy. He is receiving legal advice. WINZ will not help because he is technically still employed. We told him we would reduce his weekly rent during the lockdown by $80 to help but, to date, we have not received a cent. What are our options?
Our Experts Answer:
We understand it has been a stressful time for many people and we encourage both tenants and landlords to talk through any changes in circumstances due to Covid-19. As you have already provided a temporary rent reduction, make sure you have a written agreement with your tenant on the rent reduction amount and when the reduction will end. Where possible, it might be worth discussing a rent repayment plan with your tenant. Make sure any rent reduction and rent negotiation agreement you reach is recorded in writing and signed, and that both parties have a copy.
You may wish to seal any agreement through our Fast Track service at www.tenancy.govt.nz/disputes/fasttrack-resolution. Any agreement you reach only varies those specific terms in the tenancy agreement. Tenants and landlords’ responsibilities as agreed in the tenancy agreement remain. The tenant will still be liable for any rent arrears, including any agreed reduced rent payment. If you are unable to resolve your situation, you can apply to the Tenancy Tribunal for termination of the tenancy.
Due to the impact of Covid-19, temporary protections for terminations on rent arrears grounds were in place from 23 March 2020 to June 25 2020. This meant a landlord could only apply to the Tenancy Tribunal if the tenant was at least 60 days behind in rent. From 26 June 2020 this returned to 21 days behind in rent.
The Tribunal will take into account fairness and whether the tenant is making reasonable efforts to pay the rent. There is government support available that you may wish to discuss with your tenant, including the wage subsidy extension and the COVID-19 relief payment. A tenant can also talk to the Ministry of Social Development if they require assistance with any rent they owe.
Tenancy Services has information on rent negotiation and overdue rent, while the Ministry of Housing and Urban Development can provide information relating to rental arrears.
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