Renters moving to a new house during the first day of the coronavirus lockdown have been told by police to stop.
"We are now starting to hear stories of tenants who are moving, armed with the advice from the Ministry of Housing and Urban Development," Bindi Norwell, chief executive of the Real Estate Institute, said.
"But they are being warned by the police for unnecessary travel - again adding to the confusion around the situation"
It comes as home buyers have questioned why renters can end tenancies and move properties, while those buying and selling have been advised to postpone their big moves.
The confusion has left almost 6000 house sale deals set to be finalised in formal settlements in the next four weeks up in the air.
Many settlements require houses that have been sold to be left vacant by a set date, and failure to do so can result in financial penalties.
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Bindi Norwell, chief executive of the Real Estate Institute, had previously been advising home buyers and sellers to defer settlement dates until 10 days after the end of New Zealand's Covid-19 alert level 4 lockdown period.
The Prime Minister, police and other Government figures had made it clear people should stay home, she said.
"Therefore, it is somewhat confusing that the advice from the Ministry of Housing and Urban Development and Ministry of Business, Innovation and Employment appears to suggest that tenants can still move property," she said.
Clear guidelines on whether home buyers and sellers could move houses was urgently needed because about 5800 house sales were due to settle during the lockdown period, Norwell said.
As legal contracts and often being part of interconnected deals - whereby one person might not only be buying a house but also vacating and selling their old house - confusion around settlements had potential to cause stress and severe financial hardship.
"We have sought urgent advice as to whether vendors and purchasers - who have house sales settling during alert level 4 may also move - provided they move in their 'bubble' and do not engage external moving companies," she said.
The institute earlier this week put out advice suggesting settlement dates be deferred until after the lockdown - a recommendation backed by the Auckland District Law Society.
Murray Harden, a property specialist with Morrison Kent Lawyers, also said most lawyers were already looking to co-operate and encourage clients to mutually agree to move settlement dates back.
"But legally as it stands, if you don't settle by the agreed date, you are potentially in default and there could be consequences for that," he said.
The recent confusion started yesterday when the Government announced landlords were not able to evict tenants during the lockdown - except in some specific situations - but that tenants could give notice.
"Tenants can give notice to end their tenancy as normal, if they wish," Jennifer Sykes from the MBIE's Housing and Tenancy Services said.
She said this meant tenants might still be able to move into a new rental during the alert level 4 shut down.
"However, this may be more difficult under the current circumstances," she said.
"Tenants must follow Ministry of Health guidelines and follow the alert system when moving. For example, if they need to sign a tenancy agreement, do so digitally. People must exercise care if they do need to move – they should do so without contact or assistance from other people."
Sharon Cullwick, executive officer of the NZ Property Investors' Federation said her members backed a Government move to prevent tenants being evicted during the lockdown and rent increases being applied.
However, she said members had issue with allowing tenants to give notice and vacate rentals.
This could leave the landlord with no income and ongoing home loan and ownership costs, she said.
"Also it could be difficult to obtain another tenant as rental viewings are not considered an essential services," she said.
Questions and answers with Jennifer Sykes from the Ministry of Business, Innovation and Employment
* Can tenants be evicted during the lockdown?
The Minister of Finance announced on March 23, a freeze of rent increases and an extension of no-cause terminations. This will be applied as law through the Covid-19 Response (Urgent Management Measures) Amendment Bill once passed. Landlords will be unable to terminate existing tenancies unless limited and specific, justified, reasons apply. The Tenancy Tribunal will act as a check to ensure that the limited and specific termination grounds are being used lawfully. These reasons are where the tenant: - substantially damages the premises; or - assaults or threatens to assault the landlord, their family, or the neighbours; or - abandons the property; or - engages in significant antisocial behaviour (defined as harassment; or any intentional act, if the act reasonably causes significant alarm, distress, or nuisance); or - is 60 days behind in rent, which is increased from 21 days (and the tribunal will need to take into account fairness and whether the tenant is making reasonable efforts to pay the rent). Tenancies may also be terminated upon the death of a sole tenant, or where the premises are uninhabitable. If a landlord had already given a termination notice that will come into effect after this bill comes into force this notice is of no effect. The Tenancy Tribunal is operating and is working to try and accommodate as many hearings as possible. The Tenancy Tribunal has the power to have hearings on the papers, without attendance from parties, if necessary. The tribunal may also have hearings by telephone or video conference. This amendment is to give the tribunal some flexibility in its proceedings during this period. It will be up to the tribunal how it manages this flexibility.
* Can tenants end a tenancy during the lockdown?
Tenants can give notice to end their tenancy as normal, if they wish. Tenants can also revoke notices that they have already given to end their tenancy, if they need to stay in the property during the lockdown period.
Tenancy Services website has information to reflect this - https://www.tenancy.govt.nz/ending-a-tenancy/giving-notice-to-end-tenancy
Fixed-term tenancies will convert to periodic tenancies when the fixed-term expires, except if both landlord and tenants agree otherwise or the tenant gives notice.
This means that if your fixed term expires during lockdown, you'll be able to stay in your tenancy. These restrictions apply for an initial period of three months, from Thursday, March 26.
* What happens to tenancies in which the tenant was scheduled to leave during the lockdown?
These provisions are designed to reduce movement between properties at this time where possible. If notice to leave the current rental property has already been given, the notice can be withdrawn. If a landlord had already given a rent-increase or termination notice that will come into effect after this bill comes into force this notice, it is of no effect.
Tenants should consider staying in their current rental property if possible. Tenants retain their existing rights under the Residential Tenancies Act (the Act) and may still be able to move into a new rental property.
However, this may be more difficult under the current circumstances. Tenants must follow Ministry of Health guidelines and follow the Alert System when moving. For example, if they need to sign a tenancy agreement, do so digitally.
People must exercise care if they do need to move – they should do so without contact or assistance from other people.
* Can homeowners list their homes for sale during the lockdown and if so what kind of notice should they give their tenants?
The changes mean that landlords cannot serve termination notices to tenants except for reasons specified in the Act. Please refer to the answer to the first question on circumstances tenancies can be ended.
Please contact Real Estate Institute of New Zealand for information on house sales.
More information can be found on:
- the Beehive website: https://www.beehive.govt.nz/release/covid-19-rent-increase-freeze-and-more-protection-tenants
- from the Ministry of Housing and Urban Development: https://www.hud.govt.nz/residential-housing/covid-19-rent-freeze-and-tenancy-terminations/