As the COVID-19 situation continues to unfold and the Government makes further announcements we will continue to seek clarity and provide you with relevant information. Please find the latest update as follows.
Real estate agents and property managers are not considered an essential service during the New Zealand lockdown.
This is not legal advice, but provides a recommended approach in certain situations. For all situations, regular communication between all parties will be essential.
Open Homes/Private viewings: These are not considered essential services so cannot take place in person. They could take place via online virtual tours or video conferencing type software, where people aren't required to leave their homes and no in-person contact occurs.
Auctions: These are not considered essential services so can only take place via phone or online bidding methods.
Settlements: In lockdown, vendors and purchasers will NOT be able to move in and out of their houses. For this reason, the New Zealand Law Society is recommending that the vast majority of settlements may need to be deferred until after the Alert Level 4 restriction is lifted. The party's lawyers will make appropriate amendments to the contract to facilitate this.
Moving if a property settles during lockdown: Travel will be restricted to essential travel only e.g. pharmacy/supermarket trip, so settlements and moving house should be deferred until after the Alert Level 4 restriction is lifted. The parties’ lawyers will make appropriate amendments to the contract to facilitate this.
Rural sales and tenanted property sales: Auckland District Law Society have considered situations where sales may not involve people leaving their home or any in-person contact (e.g. where a property is tenanted and the tenancy will continue after settlement) and have advised that whilst settlement can occur where no one has to have contact, purchasers and vendors may encounter difficulties when trying to get A&I, mortgage instruction, and other legal forms issued and signed.
So, deferring settlement may still be the safest option. We would strongly recommend that the parties seek and follow the advice of their lawyers and not assume settlement can or will be able to occur. Physical property inspections cannot occur when we are under Level 4 lockdown.
Bridging finance: Vendors/purchasers should talk to their bank or financial services provider in the first instance.
Conditional contracts: These can still be confirmed during lockdown provided no travel/face-to-face meetings are required.
If the condition(s) cannot be met during the Alert Level 4 period, then both the buyer and seller should take legal advice and either extend the condition until after the lockdown period or cancel the contract. The party's lawyers will make appropriate amendments to the contract to facilitate this.
Pre-settlement inspections: These are unable to take place in person during lockdown, however, if both parties agree, these could take place using video conferencing.
Rental Viewings: These are not considered essential services so are unable to take place during lockdown unless done by virtual reality tour or pre recorded video/photos or other technology. If tenants need emergency accommodation, they should contact Work and Income.
Routine inspections: These are not essential services, so should be deferred until after the lockdown period in consultation with the landlord and their insurer.
Routine Maintenance: As this is not an essential service it should be deferred until after the lockdown period in consultation with the landlord.
Urgent Maintenance: If this is related to essential services e.g. power, water, waste, gas then it is likely this can be undertaken during the lockdown period.
Rental increases: Rent increase freezes will apply for a period of 6 months from 26 March. If notice to increase the rent was given before 26 March, and the rent increase has not yet taken effect, the notice has no effect.
Rent still needs to be paid during this period, however, if tenants have lost their jobs and need support they should talk to their landlord/property manager at their earliest convenience to work out a payment plan or to see what financial support is available to them.
Restrictions on termination of tenancies will apply for a period of 3 months (initial period) from 26 March. The Government may extend the period once, for another 3 months if they are satisfied that it is necessary or desirable to support measures taken to contain or mitigate the outbreak of Covid-19 or the effects.
Tenants can not be issued with a 90-day no cause termination notice during the lockdown period.
Owner wants to move back into the property during lockdown: The current law states a landlord must give 42 days’ notice if an owner or their immediate family wish to use the premises for their own use.
Under the proposed changes (which are currently under review) this would increase to 63 days’ notice. We are waiting for confirmation in regard to which notice period should be used if this is required.
Moving tenants: The Ministry of Business, Innovation and Employment (MBIE) confirmed yesterday evening that moving rental properties is not prohibited. However it can only be done in extreme circumstances and Ministry of Health guidelines and the Alert System must be followed when moving. If parties cannot work together to plan a move within the rules set by the Alert System, then the move must not take place. Tenants cannot hire a moving service during this time.
All comments above are attributable to Bindi Norwell, Chief Executive at the Real Estate Institute of New Zealand.