New Zealand is in Alert Level 4 which means all non-essential businesses closed at 11:59pm, 25 March 2020. We can assure you that although our office may be closed our business (and support for you) is very much BUSINESS AS USUAL. We will continue to manage your property, your tenants as best we can. Our team is well equipped to work from home during this time and we remain contactable through our normal email address, mobile number and wechat.
Last week, there were significant announcements from the government regarding how we can continue to take care of you, your property and your tenants. I’ve summarised the key points and included links if you wish to read further. We ask for your support and patience as we navigate these new waters.
I have also taken a quick video (excuse the cartoons on the wall) to explain these points, a bit long but I will do a shorter set of videos topic by topic soon. Click below to watch the video.
KEY POINTS ON LAW AND POLICY CHANGES
- Rent Freeze: The Government has confirmed a ‘rent freeze’, effective for an initial period of 6 months from 26th March 2020. This means the weekly rental amount cannot increase for 6 months, not that tenants are able to stop paying rent – this responsibility remains in place (visit www.tenancy.govt.nz for further details).
- Section 40(1)(a) of the Residential Tenancies Act states that the tenant shall pay the rent as and when it is due and payable under the tenancy agreement and this obligation remains.
- Section 4 of the Covid-19 Response (Urgent Management Measures) Legislation Act 2020 states that a tenant may be at risk of eviction through the Tenancy Tribunal only if they become 60-days or more in arrears. The same Bill also states that if a tenant is making reasonable endeavours to pay the rent then this risk is likely reduced.
- No termination notices for 3 months: To keep people in their properties, it was announced that we cannot give notice to tenants until 26th June 2020 (and this may be extended for a further 3 months). If you have a fixed term tenancy ending before then, this will automatically revert to periodic and the tenant will not have to leave. This only affects a handful of our owners and we will contact you directly about this. It is worth noting that you can end tenancies for anti-social behaviour.
- Mortgage “holiday”: While Mortgage holders are able to apply for a mortgage holiday through their bank, there is no such provision for rent not to be paid. The mortgage holder will still owe the total mortgage, plus interest that will have accrued due to their non-payment, there is no actual reduction in the amount owed: https://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=12319594
UNO PROPERTY UPDATE ON OPERATIONS:
- Our arrears are still very low and we’re achieving this by connecting with people (often daily) via phone, checking in, seeing how we can help. We are ensuring our tenants know how to access the government grants, what they can apply for and how they can get help.
- If they cannot pay the rent, we’re asking if they can pay a portion of the rent (with a view to pay the rest back when income increases again) by agreement with the owner.
- If your tenant is unable to pay their rent, you may be able to access a mortgage holiday (link below) if you can prove you have been affected financially by COVID-19. We can help with this, providing statements and rental summaries.
- Under previous law, terminating a tenancy at Tribunal required the tenant to be minimum of 21 days in rental arrears, this has been extended to 60 days effective immediately.
- The government announced a ‘rent freeze’ on Monday. This means that any increase that was due to take effect from today (26th March) has been cancelled. And we cannot increase rents for a further 6 months.
No termination notices for 3 months
- To keep people in their properties, it was announced yesterday that we cannot give notice to tenants until 26th June 2020 (and this may be extended for a further 3 months). If you have a fixed term lease ending before then, this will automatically revert to periodic and the tenant will not have to leave. This only affects a handful of our owners and we will contact you directly about this. It is worth noting that you can end tenancies for anti-social behaviour (we hope to not have to use this).
Property Letting – Finding new tenants for your property
- We are not moving tenants in to or out of properties during the 4 week lock down period. We have been able to move all tenants either side of the lock down period.
- We are still able to market properties online and have arranged property videos for ALL properties that are available now or straight after lock down.
- We can collect references and applications and process these during lock down. Signing a property can be completed virtually. A tenant cannot move in to the property though until the lockdown is lifted (earliest 23rd April 2020).
- We are unable to do any physical viewings for prospective tenants during lockdown.
- All regularly scheduled routine inspections continue to be deferred during the Alert Level 4 lockdown period.
- We are trialing doing inspection with tenants via zoom
Repairs and Maintenance
- Urgent maintenance is an essential service. We will communicate any such scenarios with you as best we can and have advised tenants that non-urgent maintenance will be deferred.
- Some landlords may have insurance policies that can assist in any non-payment of rent scenarios. We implore you to please review any cover you have and ensure your property manager is aware of the specific details outlined in your policy wording. These have been covered by previous 2 emails.
- We encourage those landlords who do not have specific cover for these situations to speak with your insurer and consider the benefit of placing new policies as a safety measure but before you do buy a new policy, make sure it does not have exclusions on the current crisis.
We thank you for your understanding throughout this time and stress that the health, wellbeing and safety of your tenants and property are paramount to us – as is the security of your future income stream. This letter today is simply another step to try and help our landlords consider the changing future upon us and to plan ahead accordingly.
Please reach out to either myself or your Property Manager. We are receiving a higher than normal level of emails and our response time may be delayed. We aim to get back to you as soon as possible. Thank you for your understanding and patience.
To your success and safety,