The Minister of Finance announced on 23rd March 2020 a freeze on rent increases and an extension of no-cause terminations. This has been applied as law through the COVID-19 Response (Urgent Management Measures) Amendment Act and applied from 26th March 2020.
There has been confusion between the lockdown periods and the periods that the new legislation applies to.
Freeze on Rent Increases
Rent increase freezes will apply for a period of six months from 26th March 2020. If a notice to increase the rent was issued before 26th March, and the rent increase had not yet taken effect, the notice has no effect. Landlords who knowingly increase rent or purport to, are engaging in an unlawful act and can be fined up to $6,500 in exemplary damages.
Restrictions on Termination of Tenancies
Restrictions on termination of tenancies will apply for a period of three months (initial period) from 26th March 2020. Landlords who knowingly give or purport to give notice to terminate a tenancy when they are not entitled under the RTA, will be engaging in an unlawful act, and can be fined up to $6,500 in exemplary damages. Note that termination notices can only be issued under specific grounds, including but not limited to; anti-social behavior, death of a sole tenant or 60 days rent arrears. Example, if a landlord had given notice to a tenant for the purpose of moving back into the property prior to the 26th March, the notice is of no effect. The landlord would need to re-issue the notice to the tenant once the three-month protection period ends, providing that period is not extended by Government. The notice period would re-start from when the new termination notice was issued.
Tenants can still give notice to vacate in accordance with the Residential Tenancies Act 1986.
If you have any concerns about the legislation, please contact your Harcourts property manager.
This article is featured in Harcourts' Property Management Focus Newsletter Issue 4, 2020