Housing should be considered an essential service - 26 March 2020
“You would think that supplying a house for someone to occupy would be an ‘essential service’, but it would seem not!” says Sharon Cullwick, Executive Officer of the NZ Property Investors’ Federation (NZPIF)
NZPIF members agree that a rent freeze is appropriate during this lock down period and that tenants should not be given notice to leave for this period. However to extend this to three months, except if tenants are behind 60 days in rent, have caused substantial damage to the premises, abandoned the property or engaged in significant anti-social behaviour, is unjustified. On the other hand, tenants can give notice and vacate the property during this time if they wish to do thus leaving the landlord with no income and ongoing costs. Also it could be difficult to obtain another tenant as rental viewings are not considered an essential services.
Earlier this year, additional costs and undertaking Healthy Homes regulations work had already forced some landlords to send letters to tenants about rent increases and they were just waiting for the 60-day notice period to expire before these payments would begin. These landlords understand they now need to wait until the end of the lock down. However, the strict new tenancy changes state that if a landlord increases the rent during the next 6 months or is found to be purporting to terminate a tenancy without grounds these actions will be considered new unlawful acts and the Tenancy Tribunal would be able to order exemplary damages of up to $6,500 in each case. These penalties on landlords are enormous and uncalled for.
We should also point out that during this time the bills still have to be paid by someone, whether that be a landlord or a tenant! The government has offered some relief for home owners in the form of a ‘mortgage holiday’. It is unclear if this applies just to owner/occupiers or also to those who own rental properties. In addition, it should be realised that this isn’t really a holiday but rather a ‘deferred mortgage payment’ with increases in additional repayments and costs. So, in real terms there is no holiday, just extra payments and increased costs. For most landlords in the business of owning rental properties they are not classed as business owners or self-employed, or even as an essential service, therefore there is no financial relief in sight.
“We understand that many people are really hurting at this time,” says Cullwick “and some of these people are landlords who have always tried to supply good quality housing for their tenants. We would like the Government to consider housing as an essential service and to include landlords in the measures to ease the current difficulties rather than just talking about heavy penalties”.
The New Zealand Property Investors’ Federation represents 7000 property owners and is responsible for educating and supporting landlords to ensure New Zealanders have access to high quality rental properties.