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Residential Tenancies & Covid-19

17 April 2020

Many landlords, tenants and property managers are contacting us for information regarding how the current Alert Level 4 Lockdown (Lockdown) affects their residential tenancies.  This article provides an explanation of the current amendments to the Residential Tenancies Act 1986 (the Act) and the potential legal effect of the amendments to the Act and the Lockdown to your residential tenancies.

The COVID-19 Response (Urgent Management Measures) Legislation Bill came into place on 26 March 2020 (the Commencement Date).  This Bill made urgent and necessary amendments to a number of pieces of legislation including the Residential Tenancies Act 1986.  Some of the amendments in the Act only apply for a period of three months from the Commencement Date (although the government has included a provision in the Act giving them the option to extend this period one further time for a maximum of three months if deemed required).

Amendments to the Act include the following:

  1. Restrictions on Terminations of Tenancies

From the Commencement Date, no tenancies are to be terminated by the landlord.  This includes fixed term tenancies.  Any fixed term tenancy that expires during the three month period is to continue as a periodic tenancy.

Tenancies can only be terminated by the Landlord for the following reasons:

  • The tenancy is terminated with a written agreement of the landlord and tenant;
  • The sole tenant has died;
  • Upon non-payment of rent by the tenant and the rent being in arrears for a period of at least 60 days (this being an increase from the previous 21 days). In this instance an application to the Tenancy Tribunal will need to be made.
  • Premises are destroyed or deemed to be uninhabitable;
  • The Tenancy Tribunal makes an order terminating the tenancy where it is satisfied the tenant has abandoned the premises and the rent is an arrears;
  • The Tenancy Tribunal makes an order for the tenant to vacate the property due to anti-social behavior (antisocial behavior being defined as harassment or any intentional act that causes significant harm, distress or nuisance);

 

Any landlord who gives notice to terminate to a tenant is creating an unlawful act which could lead to the landlord being ordered to pay up to $6,500.

2. Terminations of Tenancies by Tenants

Tenants have the choice to remain in the premises despite having given notice to the landlord, or the landlord having given notice to the tenant, to terminate the tenancy.  As long as the tenancy had not yet been terminated by the Commencement Date, the tenant has the option to stay in the property.  If the tenant gives notice to the landlord to remain in the property after providing the landlord with notice to terminate, the tenancy is to continue as if the termination notice had not been given at all. This means in some cases, vacant possession cannot be given to any incoming or respective tenant.  The Act details that if the prior tenant has provided notice they are to stay in the property, the new tenant will have no right to occupy the property and will need to be released from any obligations in relation to the tenancy.  The landlord must advise any new tenant that the property is no longer available as soon as practicable.

  1. Termination Notices already provided to the Tenant

If before the commencement date the landlord had given notice to terminate a tenancy, and on the commencement date the tenant is still residing in the property, the notice is of no effect.  Accordingly, following completion of the three month period (or longer if extended), the landlord will need to provide the tenant with a new termination notice.  This is relevant to all termination notices including those that relate to vacant possession required for the sale of properties.

If, however, the Tenancy Tribunal had ordered a termination of the tenancy, and the tenant is still residing in the property on the commencement date, the order is suspended until the 15th working day following the end of the three month (or longer) period.

  1. Rent Increases

For a period of six months from the Commencement Date, the rent payable in respect of any tenancy may not be increased.  If notice to increase the rent was already provided by the landlord to the tenant, and had not yet taken effect by the commencement date, the notice is of no effect.

Any landlord who gives notice to increase the rent to a tenant is creating an unlawful act which could lead to the landlord being ordered to pay up to $6,500.

NWM is working the entire Lockdown period and are available if you have any queries about your rights or want some guidance on how to enforce those rights.  We are now operating as a remote law firm.  Please do not hesitate to get in touch with any of our property specialists.

Alice Cameron

 

If you wish to discuss your particular situation, NWM has a team of Property, Commercial Property and  Leasing specialists.  We are contactable by email or by phone during the entire Lockdown.

If you are a landlord or a tenant it is vital to obtain specialist advice early in the process in order to obtain the best outcome.  NWM has specialists in the Private Client and Commercial Disputes team who are available to advise you. Please contact Barbara McDermott (Private Client team).