How has the Covid-19 crisis impacted the rental property market?

Like almost all industry sectors in New Zealand, it has been affected. However, the impact is significantly different for commercial and residential property.

No one foresaw a situation like Covid-19 when writing the clause, but lawyers have agreed Clause 27.5 conditions were met during the lockdown with associated forced closures imposed by the Government for non-essential businesses. Temporary rent reductions negotiated varied widely from 20 to 100% depending on the tenant’s business circumstances.

In the residential space, the Government swiftly introduced emergency measures to protect tenants in the short term as New Zealand moved into lockdown. A rent increase freeze was introduced for six months, meaning a landlord cannot serve a notice to increase the rent during this period. If a notice was supposed to become effective after 26 March, then it is declared invalid.

No 90 days’ notice to vacate a property can be issued until at least 26 June. This is to avoid unnecessary move of people and for tenants to know they will not have to move at this time if they don’t want to. Tenants can vacate a property as usual; their right to issue a 21 days’ notice to vacate on a periodic tenancy remains. If there is a major issue with a tenancy that requires termination, a landlord can still apply to the Tenancy Tribunal for an order to terminate in specific circumstances only.

The tenant is obligated to pay rent on time. However, in specific situations where the tenant is experiencing temporary severe hardship, tenants and landlords should discuss what help a private landlord could offer. These can be stressful and emotional conversations, as both parties may be under financial pressure at the same time. Landlords with mortgages or relying on the income for their retirement, tenants facing the loss of their job.

Good communication is key and help from an experienced professional property manager is beneficial, acting as a buffer between parties.

For landlords who want to avoid extra stress navigating the Covid-19 regulatory requirements or want to make sure they negotiate well and fairly, contact Catalise as their job is to protect your asset and remove stress more than ever before, so you can focus your energy on dealing with your personal life, work or business challenges.

Catalise Ltd, 203A Symonds Street, Eden Terrace, M: 021 352 670,