Details to the changes which came into force on the 26 March 2020 are as follows:
The purpose of this letter is to update you on rule changes to the Residential Tenancies Act which will come into effect as of today. In our view the rule changes have been rushed, and as a consequence some of the finer detail is difficult to interpret. For example, the new rules refer to no terminations for the period of the lockdown (presently 4 weeks) and also refer to this being for a period of up to 3 months. Which is it? Also, all rents are frozen for 6 months, but some landlords may wish to lower the rent in order to help a tenant in financial difficulty. Does that mean the landlord will be technically breaching the rules? It’s important to note that breaching the new rules is a ‘new’ unlawful act with exemplary damages of up to $6,500.
Details of the changes are as follows:
- Rent freeze: All rents are frozen for a period of 6 months.
- Terminating tenancies: No tenancy can be terminated (except for very limited reasons – see below) during the lockdown period (for up to 3 – months) unless the parties agree. If a tenant wishes to terminate their tenancy they can do so. Reasons where a landlord application for termination may be considered:
- Tenant substantially damages the premises.
- Tenant assaults or threatens to assault the landlord, their family, or the neighbours.
- Tenant abandons the property.
- Tenant engages in significant antisocial behaviour (defined as harassment; or any intentional act, if the act reasonably causes significant alarm, distress, or nuisance); or
- Tenant is 60 days behind in rent, which is increased from 21 days (and the Tribunal will need to consider fairness and whether the tenant is making reasonable efforts to pay the rent).
- The Tenancy Tribunal will assess on a case by case basis whether the above specific termination grounds are being used appropriately.
- Tenants previously given notice: Tenants who have previously been given notice to vacate or who have given notice themselves can now stay in their rental property for the period of the lockdown – if they wish. Where the landlord had a ‘new’ tenant moving in, it’s the landlords duty to advise the new tenant that the property is no longer available.
- Fixed term tenancies revert to a periodic tenancy: For a period of 3 months fixed term tenancies which end during the 3 – month period will revert to periodic tenancies unless the tenant agrees for this not to happen or both the tenant and landlord agree. There are also some other exceptions but generally speaking – for the next 3 months any fixed term tenancies due to end will revert to periodic tenancies.
- Applications to Tenancy Tribunal for termination for rent arrears: Previously, after 21 days a landlord could apply to the Tenancy Tribunal for termination of a tenancy if the tenant was more than 21 days in rent arrears at the time of the application. This has now changed to 60 days.
As considered previously, the rule changes are designed to help tenants. There’s very little in the changes for landlords to celebrate.
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