Some temporary changes
Due to the COVID lockdown and the ensuing impact on the country’s economy, the government has made temporary changes to the Residential Tenancies Act 1986. These changes restrict a landlord’s ability to increase the rent or to end residential tenancies. If you are a landlord, you should read on to ensure you are not inadvertently breaching this temporary law change.
Over the period 26 March 2020 until 25 September 2020, landlords cannot increase the rent for a residential tenancy. This includes any rent increases about which you have already notified to your tenant, but had not taken effect before 26 March 2020. If you try to enforce a rent increase before 25 September 2020 you will be committing an unlawful act.
From 26 March until at least 25 June 2020, landlords may only end a residential tenancy in limited circumstances. These restrictions apply to all residential tenancies, including fixed term tenancies of 90 days or less. There is the possibility of extending the duration of these changes for a further three months, from 26 June through to 25 September 2020.
Ending a tenancy in this period
While these restrictions remain in force, you can only seek to end a residential tenancy in exceptional circumstances:
- The sole tenant of the tenancy dies
- The Tenancy Tribunal finds that your tenant has failed to pay rent for at least 60 days (instead of the usual 21 days) or, if your tenancy is a boarding house tenancy, they failed to pay rent for at least 28 days (instead of the usual 10 days). In both cases the Tenancy Tribunal must be satisfied that your tenant has not made reasonable endeavours to meet rental payments
- Your tenant has, or has threatened to cause, substantial damage to your property
- Your tenant has assaulted, or threatened to assault, you, your family, your agent or the neighbours of your property
- Your property becomes uninhabitable as a result of your tenant breaching the tenancy agreement, or
- Your tenant abandons your property.
Where your tenant is engaging in anti-social behaviour, such as harassment, you can also seek an order from the Tenancy Tribunal ending the tenancy. However, the Tribunal will not make an order if the application was retaliatory or ‘doing so would be unfair because of the circumstances in which the behaviour occurred or the impact that terminating the tenancy would have on the tenant.’
Other issues around tenancies
If your tenant gave you notice to end the tenancy, and your tenant was still in possession of the property on 26 March 2020, your tenant can elect to stay in the property during this period instead.
If you have previously signed an agreement, where you agreed to give a prospective new tenant vacant possession of the property, that agreement is effectively cancelled. You will be released from all obligations to the prospective tenant and that person will have no right to occupy the property. However, as soon as possible, you will need to advise the prospective tenant that the property is no longer available.
Notably, these restrictions will prevent tenancies being ended for the purpose of an upcoming house sale or where you, a member of your family or your employee, intends to move into the property. In these circumstances, negotiation with your tenant will be key as tenancies can still be ended if your tenant agrees.
It is unlawful for you to notify your tenant that the tenancy is being terminated, or for you to bring an application to the Tenancy Tribunal to have the tenancy terminated for any reason other than those listed above.
Important to get it right
It’s always important for landlords to keep up-to-date with tenancy laws, and particularly so at this time. Getting these rules wrong can be costly; there’s a $6,500 penalty for landlords who wrongly increase the rent, or unlawfully attempt to end a tenancy.
If you are considering increasing the rent or terminating your tenancy without your tenant’s agreement, we can help with checking whether one of the exceptions applies. Otherwise, further information on residential tenancy issues during COVID-19 is available here.
If you would like some advice about the options and relief available to you, we are here to help.
DISCLAIMER: All the information published in Property Speaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Property Speaking may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2020. Editor: Adrienne Olsen. E-mail: adrienne@adroite.co.nz. Ph: 029 286 3650 or 04 496 5513.
