Some of New Zealand's 1.5 million tenants in about 600,000 properties are about to get huge support from the Government because landlords will be banned from increasing rents and their rights to evict tenants will be severely limited.
Finance Minister Grant Robertson spoke following Prime Minister Jacinda Adern after 1.40pm in an address to the nation on moving from alert level 2 to alert level 3 and alert level 4 under the Covid-19 response.
He announced a "freeze" on both rent increases and no-cause terminations of rental agreements "during this difficult time".
Currently, landlords don't have to give a reason for ending a tenancy agreement but amendments to the Residential Tenancies Act were already planned by the Government in an attempt to rebalance power between landlords and tenants.
Robertson just announced that more information would be released in the coming days but he said the measures were an acknowledgement that "for many New Zealanders, rent is one of the biggest weekly costs they face".
Ironically, earlier today the Real Estate Institute issued a detailed statement calling for such measures to be shelved during the pandemic.
REINZ wanted the Residential Tenancies Amendment Bill to be put on hold while the country dealt with Covid-19.
"These calls come as the Reserve Bank announced last week that it is slowing down its regulatory initiatives for an initial period of six months and similarly, the Financial Markets Authority said that it will be providing regulatory relief to market participants to give them an additional two months to provide their audited financial statements," REINZ said this morning.
Bindi Norwell, REINZ chief executive, said today: "Right now, thousands of people around the country are having extremely difficult conversations with their employers as to whether they still even have a job or not. While there is a financial support package available to businesses, the reality is that this is going to impact people's ability to pay their rent and is likely to lead to more difficult conversations with property managers and landlords. In some cases, this will lead to landlords having difficult conversations with their bank around mortgage repayments.
"While the country works through what its new normal looks like, we're calling on the Government to take this into consideration and put the proposed changes to the Residential Tenancies Amendment Bill on hold," she said.
Landlords and property managers have had to deal with big law changes from asbestos, to a ban on letting fees through to insulation, she said.
"In fact, there have been more regulatory changes for the property industry in the last few years than there has been in the previous five years. Taking that into account, REINZ is just calling for more of a 'keep calm' approach while everyone adjusts to the effects of Covid-19 – particularly as there has been so much opposition to some of the proposals, particularly the changes to the 90-day rule" Norwell said.
Submissions on the Bill close on Wednesday and REINZ was encouraging as many people/organisations as possible to make submissions on the bill.
But groups representing tenants supported the changes, saying it would give more protection to tenants and re-weight the inherent power imbalance between the two parties.
More details from Robertson on the planned changes are yet to be released.