Coronavirus: Landlords urged to defer rent increases and help tenants stay in their homes amid crisis

Advocates are urging landlords to help tenants stay in their homes and show leniency amid the COVID-19 crisis.

The New Zealand Property Investors' Federation head Andrew King says there will be job losses and reduced hours for tenants, meaning paying rent could be a struggle for some.

"Some tenants may have to give up their rental property and move in with others. There could be a shortage of tenants, therefore it would be wise to help your existing tenants to stay in their rental," he told Newshub.

"If your tenant has lost their employment, consider not requiring rent for a week or two to allow government assistance to kick in.

"Many rental property providers are increasing their rental prices, so consider deferring this for a few months until the situation becomes clearer."

King's comments come after REINZ chief executive Bindi Norwell told Newshub on Thursday there were no plans to reduce or freeze rent payments.

But there are other options available to landlords, according to King. He said If landlords pay a principle component rental property loans, they can contact their banks and see if interest-only payments are an option. 

Those savings in interest could allow a reduction in rent for a tenant, should they be affected by reduced hours or losing employment, he said.

"Our advice is to communicate with tenants to see how they are and how they are affected by the COVID-19 situation.

"Unfortunately many rental property providers own employment will also be at risk. Even taking these measures into consideration, the combined effect of multiple financial stresses could see providers losing their rental properties.

"This would not be in anyone's best interest, so examining your situation and level of risk is a good idea, along with contacting your lender to see what options are available."

Andrew King.
Andrew King. Photo credit: The AM Show

'I can't see this happening very often'

Newshub showed King a social media post on the NZ landlords chat group Facebook group from March 15, where a homebuyer was looking for advice on how a tenant could be removed from the house to commence renovations.

Asked if landlords should be putting such things on hold amid the crisis, King said it can be tricky for all involved.

"Most buyers would ask for vacant possession rather than taking on the tenants only to ask them immediately to vacate. So I can't see this happening very often.

"[It] could be tricky though. Buyers may have bought the property with the idea of fixing it up to such a degree that it really isn't feasible for the tenants to continue living there.

"If the work is all lined up then it may be difficult to put on hold."

King said putting such work on hold could mean tradesmen lose work as well.

"Sometimes there just aren't good options," he said.

Coronavirus: Landlords urged to defer rent increases and help tenants stay in their homes amid crisis
Photo credit: File

Government to protect renters' from eviction?

In the UK, Prime Minister Boris Johnson said legislation to protect renters from being evicted would be brought forward, the BBC reported.

When asked whether New Zealand would consider similar measures, a spokesman for Associate Housing Minister Kris Faafoi told Newshub, "I understand there have been discussions on this sort of question.

"Detailed decisions may not yet have been made."

Renters United spokeswoman Anna Mooney told Newshub having a secure home was critical for people amid the crisis.

"This is true for everyone, including renters, who will be hit hard by both income and job losses in the coming weeks and months, and who will not feel any relief from lower mortgage interest rates.

"The Government must be ready to step up and to take any and all action needed to keep people in their homes as the situation demands. This should include contingency plans to freeze rents, ban evictions, and extra income support for renters."

King said preventing a landlord from ending the tenancy of someone not paying rent, however, would not be a good move.

He said the Government's $12.1 billion COVID-19 package is to prevent people from losing their jobs, adding it would be appropriate to, in turn, help people losing their homes.

"I don't think it is fair to say some industries get taxpayer help while others will be expected to help their customers."

On Thursday, Auckland Action Against Poverty (AAAP) coordinator Ricardo Menéndez said landlords have a responsibility to ensure people do not end up on the streets if the COVID-19 pandemic affects their income.

"It is imperative to ensure people are not put at risk," he said.