1. How much rent can I ask my tenants to pay in advance to secure the tenancy?
If you're planning to receive rent weekly, you can only ask for 1 weeks' rent in advance. If your tenants need to pay rent fortnightly, then you can ask for 2 weeks in advance.
In any situation it is illegal to ask the tenant to pay more than 2 weeks' rent in advance.
Read more about advance rent payments
2. Can I use an advance rent received from tenants to pay their last weeks rent or use it as a down payment or to make sure rent account remains in credit to avoid potential arrears in future?
NO. This issue is one of the most common misunderstandings. The advance rent payment your tenants pay to secure their tenancy is their first rent payment.
Example: If a tenancy starts on the 10th September and a tenant made a payment equivalent to 2 weeks on the 1st September, this payment will be allocated towards rent from 10th September to 23rd September. Their next rent will be due on the 24th September will be assigned to their next rent cycle and so on.
Note an advance rent payment is not the same as a bond
3. Can I ask tenants to pay rent monthly?
No. You cannot collect residential rent on a monthly basis. The Residential Tenancies Act 1986 clearly states:
23(1) A landlord shall not require the payment of any rent —
(a) more than 2 weeks in advance; or
(b) before the expiry of the period for which rent has been paid already. that you shall not require the payment of any rent more than 2 weeks in advance
This is not to say that tenants can't choose to pay rent more frequently if it's in line with their pay or more convenient.
4. Do I need to lodge a bond with Tenancy Services? Can I keep it in a trust account?
Failure to lodge a bond is not a joke. If you charge a bond, you must lodge it with Tenancy Services within 23 working days of receiving it.
You can face a fine of up to $1,000 (payable to the tenants) for not lodging a bond.
5. Can I increase rent during a fixed-term tenancy?
NO. Rent cannot be increased during a fixed-term tenancy unless the Tenancy Agreement allows for this. If there is was no specific clause to enable this, the landlord should wait until the end of the fixed-term tenancy to increase rent.
We hope you found this article useful. We will follow up with the most commonly asked questions from landlords about tenancy agreements next week.
The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice, you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.