15 December 2020
In 2020 Covid-19 bought in a raft of rapid changes relating to tenancy law relevant to alert levels 1,2,3 and 4. This meant that we had to rapidly send out information via video to our clients – both tenants and landlords to keep them informed.
You may recall that it was recommended that routine inspections of rental properties do not take place. This had insurance related implications at the time which meant we quickly had to determine what effect that could have on landlords insurance policies which require regular inspections.
Later it was determined that landlords could not terminate tenancies from 26 March to 25 June. This meant in some cases landlords without sufficient insurance had to have larger than normal financial loss before being able to resolve matters.
The government froze the ability to increase rents from 26 March through to 25 September which in turn meant that landlords who had previously given notice for rent changes could not implement them until quite some time later.
In August, law changes meant that rent increases were limited to once every 12 months, not once every six months as previously in place. There was a fear that landlords will simply double the size of the increase. This didn’t prove to be true as rents are market driven and tenants have the ability to protest against rent increases by filing to the Tenancy Tribunal.
Many landlords have been proactive in improving their rental properties up to Healthy Home standards, including areas such as insulation, heating, moisture control, draft stopping, moisture ingress and drainage. This has added to their costs, but also most likely improved the value of their assets. Many properties had very little to worry about, although the difficulty in filling out the Tenancy Agreement related paperwork meant many owners paid for Healthy Home Assessments in order to comply with the recent legal changes. Landlords now have to stipulate in great detail for new tenancies whether the home complies with current, or will comply with future changes.
Some landlords may think that bureaucracy might have gone made when they first glance eyes on tenancy.govt.nz’s suggested tenancy agreement and wonder in bewilderment how long the twenty-two (yes . . .. twenty-two) pages will take them to fill out. This version of the tenancy agreement is in place now, another example of the changing landscape for landlords.
So what will 2021 bring for landlords? In February the ability for landlords to give 90 days’ notice will be removed and required notice periods for other notices will change. Further, landlords will no longer unilaterally be able to end tenancies at the end of a fixed term. Tenants will be able to make ‘minor changes’ at their rental property and , if reasonable, the landlord cannot decline. There is more paperwork coming as landlords will need to retain and provide new types of information. The fines are being significantly increased where landlords accidentally or intentional break the rules.
Healthy homes in 2021 steps up a notch with an important completion dates for work to be done in the middle of the year. Failure to have the property up to standard will see fines to landlords. As well as this landlords may struggle to get the required work done in time and prices are likely to rise as the time comes closer due to supply and demand.
Many self managing landlords are finding all of this very confusing and hard to manage. At Watson Real Estate we can provide a great solution. We look after all compliance for you and help ensure that you are safe from fines. So why not give property management a go? That way you can keep ownership of your investments in a rising market, while not having to deal with the stress.
– Greg Watson