Our thoughts are with those of you and your wider families who have been affected by the flooding and Cyclone Gabrielle. Please stay safe!
We have collected a number of frequently asked questions for property managers to help guide you through this challenging time.
What are property owners responsible for when cleaning up flood damaged property?
Property owners are responsible for maintaining the property in a reasonable condition and remedying any damage to the property caused by a natural disaster.
In the case of flooding, the landlord is responsible for ensuring necessary repairs are carried out (if the property remains habitable) as well as the cost associated with hiring machinery to dry the property if there has been water damage. This could include the hiring of equipment to dry the home and any electricity charges incurred by the tenants.
Property owners should seek advice from their insurer about cover that may be in place to assist with the costs.
Property Managers should work with the property’s owner to understand the level of insurance cover they have and determine the next step in the process.
What happens if the property is damaged but liveable?
If the property is still habitable, but damaged enough that a part of it cannot be used, the rent should reduce accordingly until the damage is repaired. There is no prescribed formula for this reduction and you and the tenant will need to come to a mutual agreement and record this in writing.
It’s important to keep in mind factors such as the overall liveability of the property, the safety of the occupants if they remain at the property, how extensive the repairs are, how long the repairs may take, when any reduction will end or be reassessed, and ensuring there is recorded evidence including photographs and videos of any damage should this be needed for insurance purposes or Tenancy Tribunal dispute (if any).
The rent should be reduced from when the property is destroyed and damaged and not at the time you provide the notice of the reduction.
Your obligations under the Residential Tenancies Act remain, and you must give 24 hours’ notice to the tenant to inspect the property or allow assessors on site, unless the entry is due to an emergency, or you have obtained the tenant’s consent to enter.
What happens if the property is destroyed?
If the property is so seriously damaged that it can’t be lived in, either tenant or property owner can give notice to terminate the tenancy. This applies to both periodic and fixed-term tenancies. Property owners need to give 7 days' notice and tenants need to give 2 days' notice. Please see our template on how to give notice for more information.
Notice can only be given if the property is classed as uninhabitable, not partially damaged.
Where termination is enacted under Section 59 of the Residential Tenancies Act, it is advised that tenants are not required to pay rent during this notice period, if they are unable to use the property.
The legislation covering this scenario can be found HERE.
Who determines if a property is uninhabitable?
While common sense is required here, wherever possible we recommend seeking a professional opinion from the property insurer, or Council to confirm a property is uninhabitable before issuing a termination notice.
If delays are experienced due to extended wait times for an inspector, you can seek advice from a registered and qualified tradesperson. Get all advice in writing where possible.
What if we cannot get confirmation from a Council or an insurer on whether the property is habitable, but we are pretty sure it's not suitable for people to continue to live in?
The safety of tenants is paramount so common sense must prevail. In some scenarios it is very clear a property is uninhabitable before an assessment is made and that termination notice needs to be given.
In a situation where you need to act before Council or an insurer can assess the property, we suggest you seek professional advice from a registered and qualified tradesperson on the risks present should the tenants remain at the property.
You should collect as much photographic evidence as possible to support the decision in case the decision is ever challenged. If you cannot access the property, consider asking the tenants to record and share any photos or videos with you as evidence.
It's important to consider key elements of habitability and the requirement for a landlord to provide a tenancy in a reasonable state of repair. Such items that can indicate inhabitability include, but are not limited to:
Building and structural integrity
Land movement and section integrity - slips or landslides etc
Electrical safety and function
Clean water availability
Flood Water contamination
Can the kitchen and bathroom be used
While making contact can sometimes be difficult due to demand, we recommend seeking the advice of the landlord’s insurer (where possible) if termination notice is given before the property has been assessed by the insurer directly or Council.
How does a Council building assessment process work? Who do we contact?
Local councils have a team of assessors working through impacted areas to assess how unsafe, or habitable, a property may be if it has received damage due to the flooding. To request a building assessment, please call your local council or visit the Building Performance website for more details building assessments. In general:
A red placard means re-entry is prohibited because the building is no longer safe or significantly compromised.
A yellow placard means assessors have concerns about the building’s performance and have restricted entry to part of the building or allow temporary use of the building.
White placards mean the property may have minor damage but is sufficiently safe and habitable.
How do we handle the tenancy during the repairs process?
- If the tenant can stay
Let tenants know how long the repairs will take where possible and remember to give 24 hours’ notice if you want to inspect the work – or gain their written permission to visit sooner.
A rent reduction should be considered to compensate tenants for any inconvenience at a mutually agreed upon sum. In some cases, you may agree that ending the tenancy early is best for both of parties and this can be done by mutual agreement, however it is important you clearly outline any agreement and details in writing.
If the tenant must move out for repairs to be safely completed
Negotiate with your tenants to leave the property while the work is being done. If mutual agreement cannot be reached in terms of the tenants moving out, you will need to make an application to the Tenancy Tribunal for an order.
Communication is key and tenants should be informed on how long the repairs are expected to take, and when they will be able to move back in.
If you are able, you can help find alternative accommodation for tenants who have left a damaged property. This is not a legal requirement, and a property owner is not required to cover alternative accommodation costs.
All agreed arrangements should be recorded in writing.
Seek advice from the property owner to understand the level of insurance cover they have and determine the next step in the process.
Where can tenants seek help for emergency accommodation?
If tenants need to move out of the property due to severe damage or tenancy termination due to uninhabitability, they can seek assistance for emergency accommodation at one of the Civil Defence Shelters or Centres across each region or from WINZ who can provide both accommodation and emergency assistance payments.
There may also be options available through the Temporary Accommodation Service.
Are property owners responsible for providing emergency accommodation or the cost of this?
In a natural disasters, property owners are not responsible for finding alternative accommodation, or meeting costs associated with this.
Are property owners responsible for damage to tenant belongings caused by flooding?
The property owner is not responsible for damage to the tenant’s personal belongings, and this will come under the tenant’s own insurance policy.
Please visit your local council’s website for more information on waste and health advice.
How do we handle situations where tenants have now overpaid their rent and can no longer live in the property.
It's especially important that you identify any properties where tenancies have been terminated by either party due to damage or where rent has been partially reduced. These properties will need to have the new reduced rent amount added in the property management software system and back dated to the date this change took effect.
In some cases, where the property is uninhabitable you may need to discuss the best way forward with the property owner. If you have inadvertently overpaid the owner, and the tenant is due a rent refund you will need to get funds back off the owner.
The Insurance Council of New Zealand has provided the following general advice:
Property managers should be looking to minimise further damage to the property where they can. However, you should not be making any emergency repairs unless it is safe to do, such as having an electrician check the electricity at the property before turning it on. Specifically, do not start non-essential repairs without having your insurance company approve the repairs.
Should essential services require repair, such as water, electricity, gas and sewerage, keep copies of all invoices, take photos of any damage, and contact your insurer as soon as possible.
Photograph and put aside any water or mud-damaged goods that pose a health risk, such as saturated carpets, soft furnishings, or food.
If a tenant is experiencing family violence
There have been reports of higher than usual levels of family violence in some flood affected areas. Details and the process enabling a victim of family violence to withdraw from a tenancy can be found under section 56B of the Residential Tenancies Act 1986.
Guidance for giving 7 days’ notice – a template for communications with tenants
If a property has been deemed unsafe and uninhabitable due to damage, you will need to provide 7 days' notice of termination to tenants.
REINZ has prepared a Termination by Notice template where a property has become uninhabitable due to destruction. Our template is not a prescribed form, is not legal advice, and is for general guidance only. Each property manager will need to edit the template to suit the circumstances and their agency’s requirements
See template letter below.
Remember that where possible, property managers are advised to seek professional advice on the property’s habitability and where possible, work with the property owner before issuing the termination notice. If the property has been red stickered, you must give notice to terminate the tenancy. As entry into the property is strictly prohibited due to the significant risk to health or life, if the property manager cannot be reached, the property owner, they must still issue the notice to terminate (in a timely manner).
Please reach out to us if you need any further support.
Template for Termination by Notice
[Town/City] [Post Code]
Email: [insert Tenant’s email]
Dear [insert Tenant name/s]
Re: Tenancy at [insert property address]
The recent severe weather events have caused instances of flooding that have damaged the abovementioned property. We are writing to advise that under section 59 of the Residential Tenancies Act 1986 (Act), the landlord is required to provide you 7-days' notice to terminate a periodic or fixed-term tenancy due to the premises being destroyed or so seriously damaged that the premises is now uninhabitable.
We have now received a [builder’s report, engineer’s report, electrical report, insurance assessor’s report, and council’s assessor's report (please select where applicable)* assessing that the building is uninhabitable. *[It is recommended that property managers should notify tenants if they have received a report. If there is no report, please delete this sentence]
In consideration of the landlord’s obligations under the Act, this letter is our 7 days' notice to you of the termination of the tenancy entered on [date of Tenancy Agreement] at the above address.
The last day of the tenancy will be _____ / _____ / __________.
From [date of destruction] to [termination date] the rent shall be abated accordingly. This means there will be [no rent charged/rent reduced charged at $[reduced rent] per week (please select where applicable)] for this time period.
We understand that this may not be the news you were expecting, therefore, please do contact me if you have any questions. Although we cannot guarantee that we can relocate you, we are here, and willing to assist you where we can.
HELPFUL LINKS AND SUPPORTING RESOURCES
Work and Income
Details on how to apply for emergency housing and seek emergency financial assistance, including required contact details
CLICK HERE - Emergency Housing
CLICK HERE - Auckland flooding assistance and financial help
Information about the rights and responsibilities of both tenants and Property owners in the event of a natural disaster, particularly in relation to repairs and damages, and tenancy termination where a property may be deemed uninhabitable.
CLICK HERE - Uninhabitable properties
CLICK HERE - Repairs & damages after a natural disaster
Business New Zealand
CLICK HERE Information for businesses who have been affected by the extreme weather
CLICK HERE Employment relations advice during and after disasters
Residential Tenancies Act - Section 59
Specific details surrounding termination of tenancy due to the destruction of premises and where a property is classed as uninhabitable
Insurance Council of New Zealand
Advice on best practice for insurance claims
New Zealand Police
CLICK HERE Family Violence support
NEMA (National Emergency Management Agency) – also known as Civil Defence
Central government agency supporting the local emergency management teams
Shelter, utilities, food and general links