Lockdown laws that will affect every landlord


Due to the spread of COVID-19 and the new lockdown laws, new restrictions now apply to the New Zealand rental market according to myrent.co.nz

We are receiving are a lot of questions from both landlords and tenants around the topic of property viewings, moving house, and starting tenancies during the four-week lockdown period. Although further clarification from the Government is required, this is what we know now.

Rental viewings and open homes

There will be no individual viewings or open homes. These will be considered non-essential as you will not be able to interact face-to-face with people outside of your self-isolation group.

Virtual tours, pre-recorded videos and photos can replace face-to-face viewings.

Work and Income will still handle tenants in need of emergency accommodation.

Moving house during the lockdown

There are a lot of questions from both landlords and tenants around this topic. Unfortunately, moving house would be deemed as ‘non-essential travel’ during the four-week lockdown period. To handle this, all the parties involved need to make necessary amendments to their agreements, extend their existing contracts and delay moving into their new homes until the Alert 4 restrictions are lifted.

These precautions are in place to protect your health, your applicants, tenants and the wider public with respect to Covid-19.

Inspections and maintenance

Routine Inspections: These would be considered non-essential services, and are now deferred until the lockdown period is over or the restrictions go down to Level 3.

Routine Maintenance: These maintenance issues are likely to be considered non-essential services and are expected to be deferred until the lockdown period is over or the restrictions go down to Level 3.

Urgent Maintenance: Depending on the nature of the problem, this can be considered essential or non-essential. If the maintenance issue is related to power, water, gas, waste (the essential services), then the landlord can contact an essential services company to perform the repair.

What can you do now?

The Government has put a temporary freeze on rent increases and tenancy terminations for residential properties. This was introduced in a bid to provide relief to renters facing reduced working hours or job losses as a result of the coronavirus downturn.

1. Identify risks within your portfolio

It has never been a better time than now to identify the factors that can cause volatility in your property returns. This will help you picture your worst-case scenario, which realistically maybe that some rents are going to be missed. This means that you may end up with less money for a few months.

Good idea to identify which industry your tenants work in and see if there are any possible issues you can predict based on this. Rent payments from WINZ are likely to be safe and consistent. But other tenants are might be at higher risk of losing their jobs and having their work hours cut down. Keep the lines of communications open with your tenants. Talk to them today.

2. Increase your cash reserves

Do you have enough emergency funds to see you through of things turn bad? Are you able to support 1-2 months of missed rent?

Talk to your mortgage broker or your bank to understand how you can achieve a cash buffer and go through your options. Can you upgrade your loan to a flexible loan with a revolving credit facility, so you can have access to credit when you need it? If you’re paying principal and interest, are you able to change to interest-only loan to free up some cash to help you through?

The Government has announced a six-month home loan deferral scheme (mortgage holiday scheme) for homeowners whose income has been impacted by Covid-19. This will see eligible applicants stop the principal payments temporarily and have their interest added to their mortgage. More details are due to be announced in the days to come.

3. Practice compassion

Property values may change and jump and down. But people will still need a place to live.

Be proactive and send a message to your tenants today telling them to contact you as soon as the things get tight (and not wait until they’ve racked up weeks of rent arrears), so you sit down and discuss how you can help.

If your tenant loses their job, work with them to come up with a solution that works for both you and them. Negotiate a payment plan of partial rent payments if you can. Make sure you get everything in writing.

Suggest outside assistance.

  • There might be financial support from the Government’s Wage Subsidy scheme available to eligible workers.
  • Budgeting services may provide some help.
  • WINZ may be able to assist with emergency payments.
    If you’re not registered as an accommodation provider, you can use myRent to help you collect payments from WINZ on your behalf.
  • There might be an opportunity turning to the bank for them to get a short-term loan.
  • Consider allowing tenants to sublet to paying boarders and flatmates to provide some relief.

4. Stay compliant 

The COVID-19 crisis doesn’t change any of your obligations as a landlord. Keep checking Government announcements that may impact some of your rights. If you need any general legal advice and information about renting in NZ, check out www.tenancy.govt.nz. Tenancy Services has FAQs concerning COVID-19 on their website which may be useful.

5. Take care of yourself

Make sure you look after yourself, your body, your family.

Keep your mind healthy and try not to get overwhelmed by the enormous amount of information coming at us from all direction, some of which is fake. Turn off social media if you need, rely on government updates, WHONZPIF, and credible news sources. Turning off unnecessary noise will help you stay up-to-date, alert and help you make better decisions.