The COVID-19 pandemic is an unprecedented event that is creating an understandably difficult and overwhelming time for many. With the closure of schools, businesses and many people finding their lives turned upside down in this new norm it is undoubtedly a challenging and frightening time for property owners and tenants alike.
With the full country now on lock-down there have been a number of updates to how rental properties are to be managed. Here at McDonald Real Estate our team of property managers are working successfully from home to ensure that all landlords and tenants are looked after. Even though we are unable to make visits to complete house inspections or undergo property viewings we are keeping up to date with the latest news and are keeping on top of advice from the Government.
So what changes have been made to rental properties over this time and what changes may affect you? Below we have put together a list of our top updates that could affect both landlords and tenants.
What law changes have been announced as a result of COVID-19?
The Minister of Finance announced on 23 March 2020 a freeze of rent increases and protections against tenancy terminations. This has been applied as law through the COVID-19 Response (Urgent Management Measures) Amendment Act.
Late rent payments
With a number of redundancies as well as unexpected decreases in weekly wages, this could mean that some tenants may experience issues paying their rent. Any tenant that is having trouble paying their rent on time should be contacted as soon as possible to discuss their situation. In our case the Property Management team are proactively doing this to get on top of the situation. Because not all cases are the same these need to be treated individually. Thankfully a tenant can apply for financial support from the Government’s 'Wage Subsidy' and 'Leave Payment' scheme which is available to eligible employers and workers. For more information on this wage subsidy or to see if you or your tenant can apply click here. If you are self managing your rental property and do not feel comfortable discussing late rental payments our team will give you advice. Feel free to contact our property management support services here.
The New Zealand banks have also introduced a mortgage holiday for those affected by COVID-19. The six-month principal and interest payment holiday has been set up for mortgage holders and small business customers whose incomes have been affected by the economic disruption from COVID-19. Of the main retail banks, ANZ, ASB, BNZ and Kiwibank have online application forms ready to go. It pays to contact your bank directly to discuss whether you fit the criteria to apply.
No tenant can move in or out of a rental property
Tenants that were booked to move in or out of a property after midnight on the 25th March will not be able to do so. Under the new laws, if a tenant had already given notice to leave your current rental property, they can withdraw that notice. If the landlord gave notice to end the tenancy, it is of no effect. In essence this means that wherever a tenant was living at midnight, Wednesday 25th of March is where they must stay during the entire lockdown period.
The exception is that tenants retain their existing rights under the Residential Tenancies Act and may still be able to move into a new rental property in exceptional circumstances.
21 days to 60 days in arrears for Tenancy Tribunal
New legislation for the lockdown period was passed on the 25th March which does not allow us to apply to the Tenancy Tribunal until the tenant is 60 days in arrears, up from 21 days. The governments reasoning is to ensure that tenants stay in the property that they are isolating in and also to help them have security when their income has been compromised.
Frozen rent rates
Any rent rises that were due to take effect during this time are now void and rent rates are frozen during the lock-down period. Here at McDonald Real Estate we believe that with good communication between the property managers and the tenants, arrears will be kept to a minimum, however we do want you to be prepared for the few that may creep up over this challenging time.
If there is an urgent property management situation that was to arise our team would arrange the necessary contractor to complete the work. The tenants will need to be well and not in self-isolation or back from overseas travel during the month of March. If the job is not deemed urgent a contractor will be arranged to complete the work once the lock-down has finished.
With our country lock-down now in full swing it is important to know whether your insurance policy is going to be flexible . If you have a 'Landlord Insurance Policy' then you need to contact your provider as soon as possible.
As many insurance policies require three-monthly inspections to fulfil insurance requirements, this is the time to make sure you are covered. Please notify your Insurance company that inspections are temporarily suspended so that it can be noted on your policy.
Thankfully our team of property managers are all working from home and are available via phone, email or through online form submissions. If you have any questions regarding a property that is managed by our team or if you self manage your own rental property and would like some professional advice please don't hesitate to contact us.
If you would like further information, the Government have put together a list of answers to many questions they feel landlords and tenants may have during the COVID-19 pandemic. If you have any concerns or questions regarding how you may be impacted during this time we recommend reading more here.