As the long haul gets under way in Christchurch there are going to be many flash points for conflict. One of the first to emerge is the tension between landlords and tenants, as the following selection of articles makes clear:
Christchurch earthquake: Landlords play hardball with fleeing tenants
Some Christchurch renters fleeing the shaken city are getting little charity from landlords, who are trying to keep them locked into leases and contracts.
Property investor Nigel Lundy said some renters “just want to pack up their luggage and leave the property owner with the mess. They just want to walk out. “[Some] are treating the earthquake like an excuse to avoid their responsibilities.” …
Mr Lundy defended his attempts to keep tenants in contracts and said early leavers left landlords paying mortgages on vacant properties that generated no income. “We’re people as well, we’ve got lives, we’ve got families, we’re not trying to make someone else suffer financially.”
Tenants still have to pay: service
Landlords and tenants need to strike reasonable deals with each other in the aftermath of the Christchurch earthquake. The warning comes as property experts predict a loss of equity for home-owners and landlords, an exodus from the city and rising rents in Christchurch and other cities due to increased rental demand.
The temptation for many renters will be to up sticks and go, claiming the homes they rented are now uninhabitable, but Tenancy Services told the Star-Times the earthquake had not given tenants an automatic right to stop paying rent. Around 80% of Christchurch is without power and water. In that context it would not be possible to claim a property was uninhabitable for those reasons alone, a Tenancy Services call centre staffer said. …
Landlords in the city will be under financial pressure, said Auckland investor David Whitburn from the Auckland Property Investors’ Association. Even those whose properties had not been damaged would realise their values had dropped.
“For some landlords, their equity will have been wiped out,” Whitburn said. In the worst cases they will own uninhabitable properties but they will still have to pay the mortgage. The banks would find themselves faced with a stark choice – strike deals with landlords who come to them “cap in hand”, or become mortgagee in possession and manage the insurance rebuild and sale of properties. …
Whitburn said it was inevitable that rents in Christchurch would rise as the number of houses destroyed raises demand. “The temptation for landlords is going to be to raise rents,” Whitburn said, adding it had happened after the earthquake last year. “It was just supply and demand,” he said.
Members of both groups, tenants and landlords, will end up victims in some cases, and there will no doubt be some desperately difficult stories emerging. In my opinion, however, the claim that houses remain habitable without water and power is unfair. Home owners in such a situation have the option of fleeing the city – why should renters be trapped?
The following piece contains some useful advice:
Row over landlords tossing out quake-hit tenants’ belongings
The rules on earthquake-damaged homes are:
– If the house is earthquake-damaged, tenants can give two days’ notice and then stop paying rent.
– Tenants should first take advice from authorities on whether the house is really uninhabitable or discuss it with the landlord.
– Landlords must give tenants seven days’ notice if the property is earthquake-damaged.
– Landlords should also check with authorities about whether the property is safe. …
Without tenants’ agreement, landlords should not touch their property. “Under no circumstances can landlords go in and shift people out. It’s actually unlawful,” said Helen Gatonyi of the Tenants’ Protection Association. Kim Willems of the Canterbury Property Investors’ Association said even if a house is uninhabitable, landlords are still not entitled to remove tenants’ belongings. “There still is a proper process to go through…”
One ray of sunshine – Bravo Phil Heatley and Housing NZ:
Rent cancelled for 2500 tenants
In what’s believed to be the largest rent suspension by Housing New Zealand, rent has been cancelled for 2500 Christchurch tenants. Housing Minister Phil Heatley says it’s easier to just cancel it outright in 32 suburbs, backdated to February 22, than work out who is affected.
While in the business property market:
Some Christchurch landlords ‘vultures’
Some Christchurch landlords have been labelled opportunistic vultures for ramping up rents for homeless businesses trying to find temporary office space. Hamish Doig of real estate firm Colliers International said rents for some industrial grade properties had doubled amid fierce competition from tenants. Some landlords were demanding to lock in leases of up to six years or even forcing prospective tenants to buy the building to secure space, Mr Doig said. …
Mr Doig said tenants had had the upper hand in a weak leasing market for several years. “Now the landlords, a lot of them, are being opportunistic and saying: `Well, we have gone through pain, now it is our turn’.”
Canterbury Employers’ Chamber of Commerce spokesman Richard Brewer said he had not heard of price gouging by landlords, “but we would be very disappointed if people are profiteering from what is a very unfortunate set of circumstances. “If people are trying to benefit from this, then that is very poor.”
The Department of Building and Housing page on Tenancy is here including links to mediation and the Tenancy Tribunal. Contact details for tenancy advice and local offices are here. Further legal advice is here. I hope that others will be able to add useful resources in comments…
All of my posts for March will finish with this note. While life goes on as usual outside Christchurch, let our thoughts be with those who are coping with the aftermath, with the sorrow of so many who were lost, and with the challenges ahead.
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