Find out how business is going for us post lockdown and as we enter Winter, also legislation updates and learn about our mentoring service!
The winter months of June/July/August are seasonally quieter for us as tenants don’t tend to move around in the winter - it’s too cold! As a result, not many tenancies end in these months as tenants are hard to find causing landlords to lower rents to attract the few that are around.
WE HAVE BEEN BUSY!...
However, it’s good news for us this month, as we have been rather busy! It seems people have decided over the lockdown period that they need a change and some are on the hunt for new properties to live in.
We have also experienced a number of new management enquires from homeowners looking to move elsewhere and investors re-entering the market. One of our property management duos - Chelle and Sarah, even have an empty TO LET board, resulting in 100% occupancy over their portfolio!
Did you know that we offer FREE mentoring to our existing clients? Run your ideas past us and work out your next investment move. We love talking about property and helping others grow their portfolios, we tailor these meetings to suit your needs.
Use our wealth of knowledge gained from our own investment paths, our long association with the Canterbury Property Investors and strategic partnerships we have created with other investment gurus. Contact us today!
Current restrictions on tenancy terminations will end on 25 June 2020. From 26 June, landlords can give notice to terminate a tenancy under the standard Residential Tenancies Act 1986 provisions. Usual notice periods will apply from the day a notice is given.
However, the freeze on rent increases lingers on meaning that landlords can’t increase rent for their rental properties until after 25 September 2020.
The COVID-19 Response (Urgent Management Measures) Legislation Act 2020 (the Act) came into effect on 26 March this year. The Act amended the Residential Tenancies Act 1986 to support the Government’s response to the COVID-19 situation by imposing temporary restrictions on tenancy terminations and freezing rent increases, they also temporarily changed the threshold for the days of arrears tenants must be in before application is made to the Tenancy Tribunal. This was pushed out to 60 days and we welcome the return to the 21 days required to have a tenancy terminated.
On the most part tenants have been very good over the various COVID-19 restrictions however some have clearly taken it as a sponsored holiday and those are the ones that will be facing the tribunal shortly.
We have worked with a number of tenants that due to loss of employment and income, have experienced challenges with paying their rent. Increased Rent Arrears Assistance through the Ministry of Social Development has been available for those who need it.
There are two temporary changes to support people who have been struggling to pay rent, which are increasing the maximum amount payable and making rent arrears assistance more accessible. We have directed those to the Ministry for Social Development for that support and those tenants that took up that assistance have been very much appreciative.
THE ONGOING BATTLE
The Government haven’t let up on the planned Residential Tenancy Act Amendment Bill which was introduced to Parliament in February 2020. We made oral submissions during lockdown via Zoom – even though the country was in a state of emergency.
In short, the Bill includes the following reforms
- Removal of the 90 day no reason termination notice on periodic tenancies. Landlords won’t be able to terminate periodic tenancies unless they wish to move in (63 days) or sell (90 days). However, tenants can give 28 days’ notice at any time to vacate.
- So that’s OK, landlords will opt to offer fixed term tenancies only. Well, the Government had fore-planed this might happen, so they propose after the initial fixed-term, the agreement must become periodic unless both parties agree otherwise – now the right of renewal lies with the tenant. So pretty much the tenant can move in and stay as long as they like.
- Improve compliance with the law by increasing financial penalties and giving the Regulator new tools to take direct action against parties who are not meeting their obligations.
- Remove a disincentive for parties to use the Tenancy Tribunal by allowing for identifying details to be anonymised in situations where a party has been wholly or substantially successful in taking a case.
- Allow tenants to add minor changes, such as brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells and hang pictures.
- Prohibit the solicitation of rental bids by landlords and limit rent increases to once every 12 months.
- Landlords will have to permit and facilitate the installation of Ultra-Fast Broadband, subject to specific triggers and exemptions.
The Bill will soon have its first reading in Parliament. Following this, the Bill will be referred to Select Committee. We are confident this Bill will go ahead and would not be surprised if it happened pre-election.
HEALTHY HOMES STATEMENTS DUE 1 DECEMBER 2020
Assessments of all rental properties need to be completed by 1 December 2020 so we have a compliance statement to include with tenancy agreements. We have partnered with two assessment companies, Warm Fuzzies who offer assessments for $250+GST and include 3-4 quotes for failed areas. The other company will assess for $199+GST but don’t provide any quotes.
It is a painful process for all, the coordination and time involved for us is substantial, however, unlike other PM companies we have opted not to charge any extra fees for our time other than our standard supervision fee of 7.95%+GST.
Assessments have started and we thank those who have opted in thus far. Please contact us if you have any queries on this process.
An active investor for over 25 years & qualified builder, property has always been a part of life. Hamish has sat on the committee of the Canterbury Property Investors Association including two years as President.