COVID-19: Managing rent arrears

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What if the tenant can’t pay their rent arrears?

Rent arrears – they are a serious issue. In the past couple of days, we are seeing many businesses starting to let go of staff. It’s a terrible time if you’re in tourism or hospitality. This will result in a number of your tenants being out of a job and perhaps unable to pay rent.

What action to take?


Regardless of the rent arrears, this is a terrible time for everyone. Be understanding and helpful. In the end, supporting one another is the most important thing we do at this time.


We recommend that you go through your tenant list in your property management software and tag them by the risk of rent arrears: HIGH, MED, LOW. This is not to stigmatise your tenants but so you can help those in greatest need. The categories might look like this:

High – works in tourism, hospitality, importing or exporting business, in an airline or airport-related job
Medium – works in all other sectors
Low – works in the health, food, courier, beneficiary

Read our blog about risk assessment.


In this situation, the best thing we can do is keep regular contact with our tenants and landlords. Increase your frequency of communication to at least weekly but in some cases almost daily. Based on the risk assessment of the tenant I would adjust my communication style. For example, for the high-risk situations, I recommend ringing, texting, and emailing both tenants and landlords. The landlord needs to be aware of the situation and the measures you are putting in place. The tenant needs your support. For the low to the medium risk, they might only require emails.


If the tenant has lost their job, they will be very distraught. Love and understanding is the greatest thing we can show right now.


If the tenant has rent arrears then come up with something that can help them. Be flexible. A rent reduction or a rent holiday could be two options. It may mean that the rent has to drop for 6 months or more.


There may be situations where the tenant has to be evicted. If you feel that the tenant is taking advantage of your good nature. Whether it’s a 14-day notice or an application to the tenancy tribunal, then be strong (but kind) and take the actions you need.


This situation is unprecedented and as such, there is no playbook. We need to be creating and ‘making up’ solutions on the fly. At the time of writing this blog, Countdown is employing people nationwide. They are supporting this country and community by creating jobs for people. Think about how you and your business can be creative to help your owners and tenants at this.


For every cloud, there is a silver lining. At the moment there are 80,000 ex-pats returning to New Zealand. They will all need homes. This information could lift the spirits of your owners and allow them to understand that this ‘blip’ is only temporary.


Property management is all-consuming. It’s easy to work from sun-up to sun-down and beyond. It’s 6 am on a Saturday while I write this. In these tumultuous times don’t forget to call and tell those closest to you how you feel about them.

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