November 9, 2020
“Only in our dreams are we free. The rest of the time we need wages” (Terry Pratchett)
The flood of lockdown lay-offs and salary reductions has left many tenants struggling to find rent money, and their landlords wondering how to cover their bond repayments and other expenses.
Whether you are a landlord or a tenant (note that we are talking here only about residential leases) you need to be aware of the new Alert Level 1 Regulations applicable to evictions “for the duration of the national state of disaster”.
In a nutshell (this is of necessity only a brief summary of some highlights from the full regulations so take professional advice specific to your circumstances) –
- Evictions can take place but only with a court order.
- Courts have the power to suspend eviction orders until after the “lapse or termination of the national state of disaster”. Expect courts generally to lean towards suspending eviction orders; in other words landlords will in all probability have their work cut out for them.
- Landlords will in practice have to convince the court that it would be “not just or equitable” to suspend the order, taking into account a whole range of listed factors such as health considerations (public health as well as that of the parties), the tenant’s ability to immediately access another residence and basic services, the impact of the disaster on both parties (with the court balancing the prejudice to each of them from delaying eviction) and whether the landlord “has taken reasonable steps in good faith, to make alternative arrangements with all affected persons, including but not limited to payment arrangements that would preclude the need for any relocation during the national state of disaster”.
- The Rental Housing Tribunal has new powers to urgently restore occupation and/or services to tenants deprived of either by the landlord. This would be by way of an “ex parte spoliation order”, i.e. without the landlord having any right to be heard, although the landlord can ask for an urgent hearing on 24 hours’ notice.
- “Unfair practice” is presumed where –
- Services are terminated without reasonable notice, alternative payment arrangements have unreasonably not been made, or where “no provision has been made for the ongoing provision of basic services during the national state of disaster”’
- Any penalty for late payment of rental (where the default is caused by the disaster) has been levied (only interest can be charged),
- Either the landlord or the tenant have failed “to engage reasonably and in good faith to make arrangements to cater for the exigencies of the disaster”,
- “Any other conduct prejudicing the ongoing occupancy of a place of residence, prejudicing the health of any person or prejudicing the ability of any person to comply with the applicable restrictions on movement that is unreasonable or oppressive having regard to the prevailing circumstances.”
Notes for landlords and tenants
Keep a full record of everything in case your dispute ends up before the courts or the tribunal.
Both landlords and tenants will have to act fairly and reasonably towards each other here, taking into account your respective abilities to comply with the terms of the lease during the state of disaster.
Where tenants are struggling to pay rent as a result of the lockdown, landlords should be open (to whatever extent possible) to any reasonable request for rental deferments or reductions. Tenants in turn should be fair and reasonable in asking for relief. Good faith negotiation is key if landlords can expect to have any chance of obtaining an immediately-enforceable eviction order.