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New changes to the RTA and the end to a 90-day no-cause termination notice

18 November 2019

Photo by Leroy de Thierry on Unsplash

The landlords are about to face another reset of rental laws as the Government announced another list of changes to the Residential Tenancies Act. These changes will follow recent significant reforms like the banning of letting fees and the introduction of Healthy homes standards.

The Government continues to deliver on its promise to address outdated tenancies laws, as renting becoming a long-term reality for many families in NZ.

The key changes

-Ending no cause termination of periodic tenancies

The new rules will see the end to no-cause terminations and a 90-day termination notice or termination of periodic tenancy without reason. There will be a list of specified reasons that can be used to end the tenancy.

-Requiring all fixed-term tenancies to become periodic.

Upon expiry all fixed-term tenancies will become periodic unless: both parties agree otherwise, the tenant is not meeting their obligations, or specified grounds for the tenancy to end apply.

-Limiting rent increases to once every 12 months

Currently, landlords have a right to increase rent once every six months.

-Extending a 42-day notice when the landlord wants to sell

Tenants will need to be given a 63-90 days notice if the landlord wants to move back into the property or put it for sale.

-Banning rental bidding

Rental bidding is a controversial practice that has come up since the demand for houses has increased. It was brought to the Government's attention that some landlords advertise their properties without a price or encourage tenants to bid against one another (especially with high demand properties). Such activities will be prohibited.

-Allowing tenants to add minor changes and fittings to their rental homes

Tenants will be allowed to make minor low-risk changes to the property such as hanging pictures, baby-proofing, installing alarms and brackets to secure furniture against earthquake risk.

-Making complaints to the Tenancy Tribunal anonymous

A party who is (wholly or substantially) successful in the Tenancy Tribunal can choose to have their identifying details removed from the Tribunal's decision.

-Increasing financial penalties for non-compliance

The Tenancy Compliance and Investigations team will have new compliance tools to take action against parties who are not meeting their obligations, and The Tenancy Tribunal will be able to award compensation or order work to be done up to a value of $100,000 (currently the maximum is $50,000).

The next step

The changes will be drafted in a Bill to amend the Residential Tenancies Act 1986, which will be introduced to Parliament in early 2020.

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What the community has to say
  • AI

    I COULD offer a rental (don't HAVE to). I think I will leave it empty though. Better peace of mind.

  • JZ

    There will be a whole class of people who will no longer be able to rent a private rental as they have poor credit or poor tenancy history plus first time renters will never get their foot in the door I predict.

  • DJ

    This will all surely backfire as tenants will have all the rights, more so than they do now! There's already a lot of rentals up for sale, being purchased by first time home owners, because of the Healthy Homes requirements, thus leaving less rentals. That hasn't worked out very well, has it? This new raft of laws will surely have a lot more landlords selling.

  • SA

    Landlords not making any cash inflows would rather keep the property vacant rather than getting into potential problems caused by these new legislations. This will create further shortage of rentals and push the rents up further.
    These are not the sustainable solutions.

  • KS

    I have a property I was going to rent out soon - all is work completed for compliance with the necessary statutory requirements.
    But with this latest attack on homeowner renting I am now going to sell it. What short-sighted and incompetent government management of a NZ crisis regarding shortage of rental property.

  • JZ

    "A party who is (wholly or substantially) successful in the Tenancy Tribunal can choose to have their identifying details removed from the Tribunal's decision"

    This assumes the Tenancy Tribunal works flawless and protects innocent people from being exposed.
    Now the reality.
    Our previous tenant caused a lot of damage to the property and it took two full months to repair the property.
    I took 158 pictures and composed 20 pages of documentation to prove the damage to the Tenancy Tribunal judge.
    On the hearing the judge said he did not see a single picture as the tenancy tribunal system did not technically allow him to do so.
    He also did not bother to read the supporting documents either.
    Not a single claim was awarded.
    Not even the costs of bringing rubbish left by tenant to the tip.
    Before that another tenant did not mention she had a mentally ill partner.
    The partner cut water pipes and left the water running for months causing an estimated $20k damage. We had to take out a $20k mortgage topup to cover the costs.
    Our property manager did not represent the case properly and no compensation was awarded.
    After having witnessed 3 cases in the Tenancy Tribunal first hand I have lost my confidence in the Tenancy Tribunal process.
    The Tenancy Tribunal system is tremendously biased in favour of the tenants.
    The only console I have is that people can find tenants in the tribunal records.
    This now seems something of the past as well.
    It most certainly will backfire to renters who are in the most vulnerable position.
    I predict that many landlords will put their house on the market , driving up rents even more.

  • EP

    I have been a landlord for over 20 years and have had only 8 bad experiences with tenants and many thank yous and compliments from very happy tenants. Unfortunately one of the bad experiences, in which the police had to be involved, was in March this year. The existing changes to the Tenancy Act have left me little with limited options to manage the situation. Now keeping a unique, desirable, special apartment vacant. Reason with 3 apartments in a small block occupied, by it too big a risk, even under the existing changes to get 1 lot of tenants that may upset the other tenants or do damage to the property. Elizabeth

  • MC

    Absolutely ridiculous, We will be selling our rental

  • SA

    I can see rents going up, to cover all of the costs of compliance and due to the fact that rent when only increased once per year, cannot keep pace with the costs of insurance or rates etc increases, let alone maintenance and repairs.

  • SA

    PS this is Jenny speaking, not Steve: Everyone, its ele tion year. What is reasonable as a landlord? We must all contact our MPs and state our case. They will want our votes and this Bill will likely get through before the election. Sti k up for ourselves.

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