Changes that came into effect on 26 March 2020 as a result of the Covid-19 event

On 26 March 2020 amendments were made to the Residential Tenancies Act which will effect all landlords.

These changes were pushed through in urgency, and as a result are not as clear as they could be. In short, the new rules refer to among other things, no terminations for the period of the lockdown (presently 4 weeks) and a freeze on increasing rents for 6 months.

It is not clear if a landlord would breach these rules by lowering the rent in order to help a tenant in financial difficulty. We 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 rent increases 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.

Summary

These new rule changes are designed to help tenants and there is very little in the changes for landlords to celebrate. For more information click here.

Remember we are here to support you through this time and whether it is personal or business, we are just a phone call away so please contact us with any questions.