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Providing certainty for landlords and tenants in Alert Level 4

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The Government has introduced an omnibus bill under urgency which includes restrictions on terminating tenancies during COVID-19 Alert Level 4. The Bill will be referred to the Finance and Expenditure Committee, where the public can provide feedback on the proposals.

The draft legislation is flexible and responsive and will allow restrictions against tenancy terminations to be switched on and off in response to Alert Level 4 by Ministerial order.

The restrictions will not apply during the current Alert Level 3 or lower alert levels. The draft legislation is about future-proofing the legislation in case parts of New Zealand return to Alert Level 4 in the future.

Under the restrictions, landlords will not be able to terminate tenancies, except in limited circumstances. Most terminations will be postponed until after the restrictions lift. Landlords will still be able to apply to the Tenancy Tribunal to terminate tenancies on limited grounds, such as where a tenant engages in significant anti-social behaviour or substantial property damage.

The draft legislation is similar to the restrictions on tenancy terminations passed in 2020, but with some key differences:

  • Tenancy termination restrictions will not apply for a fixed period of time. Instead, the restrictions will be able to be switched on and off by Ministerial order.
  • Existing termination notices will not be cancelled. For most tenancies, the notice period will continue to run while the restrictions are in place, but after the restrictions lift, tenants will get a top up to a minimum of 28 days’ notice.
  • This legislation will not include a rent freeze like last time. The Government has made multiple changes to improve the security and rights of renters, including limiting rent increases to once a year, (which came into effect on 12 August 2020). This was not in place during the the most recent lockdown.

As before, landlords will still be able to apply to the Tenancy Tribunal to terminate a tenancy for substantial damage or significant anti-social behaviour.

These changes will resolve many of the inconsistencies between the Alert level 4 Public Health Response Orders and the Residential Tenancies Act 1986. The restrictions will support tenants to comply with the Public Health Response Order by staying in their tenancies and staying at home during Alert Level 4.

Te Tūāpapa Kura Kāinga – Ministry of Housing and Urban Development in partnership with the Ministry of Business Innovation and Employment has supported the development of this legislation.

The aim of the new legislation is to provide much needed certainty and clarity for landlords and tenants. It’s also about being more prepared and avoiding the confusion we’ve seen in the rental sector with previous lockdowns.

Published: September 28, 2021

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