One of the most talked-about tenancy reforms designed to increase stability for tenants and the rental market in the long term is finally here. Residential Tenancies Amendment Bill 2020 received Royal Assent on 11 August 2020 and has been rolled out in 3 phases.
11 August 2020 - Phase 1
Changes to rent increases
Rent increases have been limited to once a year (previously once every 6 months)
Any rent increase notices given to tenants from 12 August 2020 must comply with the new 12-month rule.
11 February 2021 - Phase 2
Most of the new changes will take effect.
New rules apply to fixed-term tenancies created AFTER 11 February 2021.
Changes to ending tenancies
- 90-day no-cause terminations are gone. Completely. Landlords will no longer be able to remove a tenant without giving a reason.
- The tenancy can still be terminated if the landlord wants to sell, or the property was sold and the new owner wants to move in (90-day notice, only if the tenancy is periodic)
- The tenancy can still be terminated if the landlord wants the property for themselves, their family member or an employee (63-day notice, instead of 42 days)
This doesn't apply to a trust or a company because neither can occupy the property and neither have family members (see Wheeler v Davis, TT 290/00, Dunedin, decision 11 May 2000)
- The tenancy can be terminated if a property requires alteration, redevelopment, being converted to commercial or demolished (90-day notice). Genuine commitment needs to be shown (e.g. materials purchased)
- The landlord can apply to Tenancy Tribunal to terminate the tenancy if a tenant is late paying rent (over 5 days behind on rent at least 3 times in 90 days) or has carried out anti-social acts on three separate occasions (in 90 days and no closer than 28 days to the end of the tenancy date)
- The landlord can still apply to the Tenancy Tribunal if a tenant is 21-days behind on rent.
- The landlord can apply to the Tenancy Tribunal to terminate the tenancy if continuing causes them severe hardship (e.g. a situation where a tenant causing extreme stress etc.)
- To terminate a periodic tenancy tenant needs to give 28 days notice (instead of 21)
All fixed-term tenancies become periodic upon expiry
- If the landlord doesn't want to continue with the tenancy, they must use one of the grounds specified above to end the tenancy.
- If the tenant doesn't want the tenancy to continue, they can give notice between 28 days and 90 days before the end of the fixed term period.
- Both parties can mutually agree to end the tenancy.
No rental bidding
All properties must be marketed with a price tag. Applicants are still allowed to offer to pay more for a property they want, but landlords can't instigate it.
Tenants can request to make minor changes
This section of the reform focuses on making houses more like homes for tenants. Tenants will be permitted to undertake minor changes to their rentals with landlord's consent.
- Landlords need to respond to tenant's request within 21 working days.
- Landlords are not allowed to decline if the change is small (but they can request for the change to be carried out in a certain way)
- Minor changes are defined as those easy to reverse and of low risk of damage.
Examples of minor changes: installation of picture hooks, a dishwasher or washing machine in a space provided, baby gate, cupboard safety latches, shelving, TV aerials, window coverings, internal locks, fire and security alarms and doorbells or developing a garden.
- Tenants are allowed to request fibre internet if it comes at no additional cost to the landlord.
- If there is a dispute between a landlord and tenant, the Tenancy Tribunal can hear the dispute and decide each case on the individual situation.
Landlords must consider all requests to assign a tenancy (including fixed-term tenancy) and cannot decline unreasonably.
If a tenancy agreement prohibits assignment, it will be of no effect.
Landlords are required to have a written tenancy agreement. Not having one is now considered an unlawful act (penalties apply).
Thorough tenancy records are required to be kept for the entire duration of the tenancy and at least a year afterwards. These records include (but not limited to):
- Tenancy agreement, any variations and renewals
- Inspection reports and images
- Maintenance records and repair receipts
- Documents relating to HHS compliance
- Insurance details
- A copy of your advert
- Initial tenancy application, your advert details and correspondence with the tenant around the negotiation of the residential tenancy (especially around extra terms)
- Any letters, messages and other forms of correspondence between landlord and tenants in relation to the tenancy
- A landlord must keep financial records of rent and bond payments for 7 tax years after the end of the tax year which they relate.
myRent management software not only helps you create all tenancy documents but keeps all the records in one central place making organising tenancy paperwork effortless. All the rental information is easily accessible. All the documents and communications with tenants are backed up so that nothing ever gets lost.
The Tenancy Tribunal's administrative powers are broadened
The Tenancy Tribunal jurisdiction increased to $100,000 (from $50,000). This is a win for landlords as the Tribunal can now handle bigger claims.
Tenant privacy changes
The laws around privacy in the Tenancy Tribunal are changing too. Tenants will now be able to apply for name suppression following a hearing (if they are partially and wholly successful (winning side) or it's in the public interest)
Mid-2022- Phase 3
More changes are coming into effect.
- Any tenant experiencing family violence will be able to leave their fixed-term or periodic tenancy (even fixed-term) with 2-day notice and no penalty if they have evidence of the abuse.
- A landlord can terminate the tenancy with a 14-day notice if the tenant assaulted the landlord, landlord's family or someone in the same building (apartment block)
In both situations, police report or real evidence has to be provided. The Government will draw up regulations for what constitutes appropriate evidence of family violence.
Phase 3 was originally due to come into force on August 11, 2021 but has been delayed til mid-2022.
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.