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NZ Property Investors React to COVID-19 Rent Increase Freeze

By Donna Jones

Property Investors Federation unhappy emergency rules introduced to support tenants during COVID-19 pandemic will remain in place despite New Zealand’s move to Alert Level 1.

What were the emergency rental rules put in place during lockdown?

During New Zealand’s COVID-19 Alert Level 4 lockdown, the government introduced emergency legislation to protect tenants. These rulings prevented landlords terminating tenancies or increasing rents during a time when tenants may struggle to find alternative accommodation or to pay higher rent.

Why aren’t the emergency rules being lifted in Alert Level 1?

Finance Minister Grant Robertson confirmed to Newstalk ZB there are no plans to remove the legislation prematurely, despite the country now being in Alert Level 1 and free to roam domestically.

This means landlords won’t be able to terminate tenancies early until after 25 June. There is however some wiggle room with the rent increase freeze — rent increase notices can now be issued, so long as the increase doesn’t come into effect until after 25 September 2020 (the original timeframe set back in March).

NZ Property Investors Federation (NZPIF) executive office, Sharon Cullwick has expressed the group’s disappointment the legislation isn’t being scrapped. She cited not only landlords, but also ingoing tenants who signed tenancy agreements prior to lockdown and first home buyers set to move into their home as parties potentially impacted by the emergency rental rules.

NZPIF members lose over $600k during COVID-19 crisis

Cullwick noted that 47% of 639 surveyed NZPIF members have lost income through their rental investment properties during the COVID-19 crisis. The sample group are responsible for 6,658 tenancies collectively and lost a total of $633,000 in unpaid rent throughout the period, excluding any losses due to delayed rental increases that would have taken place if the emergency freeze weren’t applied.

Emergency rental rules may be extended if deemed necessary

When the New Zealand government introduced the emergency freeze on rent increases and tenancy terminations, they stated that at the end of each rule’s initial period they would evaluate whether these need to be extended.

McPherson Property Management are here to help

We support any short term measures that can help people recover from the lasting effects of the Corona virus crisis.

If you own a residential investment property and feel you could benefit from a more professional property management service to help guide you through these difficult times… let’s talk.

If you’re a tenant looking for a less stressful renting experience, get in touch and let us know what you’re looking for.

Image:

Beehive, Wellington’ by Khirol Amir via CC BY 2.0.

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