LOWERED RENTS

Poverty Bay Herald, Volume LIX, Issue 17781, 17 May 1932, Page 10

LOWERED RENTS

EFFECT OF LEGISLATION TENANT AND LANDLORD Some haziness exists in the minds of both tenant and landlord as to the effect of recent legislation concerning the compulsory reauction of rents ot dwelling houses. With the object of eliciting the view taken of tJiu new law by the real estate profession, the Wellington Post interviewed, a recognised authority on house and land properties and their values. A suppositious house let at £1 a week was quoted, and the reply was to the effect that if in January, 1930, that house was let at £1 a week, and was still let at £1 a week to-day the rent would have to be reduced to 16s. If since January, 1930, the same house had been let at 30s a week then the reduction would still have to be 20 per cent, and the reduced rent would be 24s a week. It was thought that since January, 1930, rents had, if anything, been lowered, and in many cases they have been, and that substantially, but in a relatively few'Jristauces rents had been raised. But "there had been considerable voluntary reductions in rents since 1930, and certainly before the legislation in question was mooted. If, however, the owner of the house let at £1 u week as in January, 1930, had lowered it to 15s a week, then no further reduction need be made in the rent. There is one aspect of the case which does not appear to be generally recognised in respect to the dwelling let by the week or the month. It now rests with the landlord, as before the new legislation, to say whether ho will accept the reduced rent or '.bother he will resume possession. He is üblc to terminate the tenancy, and to relet at the best rate lie can obtain. No one could say what the landlord would do, but presumably if be bad a tenant who paid his rent regularly and kept the place in decent order he" would .prefer to retain him at a lower rent, in the meantime at any rate. But the point was that the landlord was not compelled to let his Serty at a lower rate, although no t the great majority of them would do so. All would depend upon the character of the tenant. In some cases, the landlord might elect to live, in the house himself, and let the house he was living in (if he owned it) for the host he could get for it. The reduction in rent was to be regarded in some sort as a set-oil against the reduction in wages or the salary of the tenant, the reduction in interest on 'the mortgage, if any, wa.s in some sort a compensation to the landlord for the reduction in rent on the house; but the loss to the landlord would he greater than lie could recover from the _mortgagee. The mortgagee, the last link m the chain, cannot pass his reduction on. On the other hand, in the present state of the dwelling-house property market and the reduced paying power of tenants, it would appear to be very difficult to get rents up by terminating a tenancy and re-letting the house. It was admitted in- answer to a question that the new law would press hardly upon many persons depending lor their livelihood upon receipts from mortgage interest. Considerable wTiting-oh of interest had already been made and interest had fallen into arrears with the slender prospect of recovery. Mortgagees in a small way would inevitably suffer by a 20 per cent, cut in income. ‘O,l the other hand, there were some mortgagees who had hitherto made oi suffered no reduction in receipts by way of interest. They would feel it, too. but necessarily not so .severHv as those with small incomes derived from mortgage interest.