Changes are coming to the controversial arena of residential landlord and tenant legal relationships. With 1 in 3 New Zealanders now renting, these changes will affect a significant proportion of the population.
After enacting the Healthy Homes Guarantee in 2017 and banning letting fees last year, the Government, through Associate Minister Kris Faafoi, has announced a suite of changes to the Residential Tenancies Act 1986. These changes are set to bolster the position of tenants by protecting them from potential disadvantages under the current residential tenancy laws.
The major changes proposed by the Government are summarised below:
- Rent increases may only occur every 12 months rather than every 6 months as is currently the case.
- Rental bids will be banned. This has become a common practice especially in areas of the country that have seen rent demand and prices sky-rocket, such as Auckland and Wellington. Rental auctions and the advertising of rental properties with no rental price listed will be included in the ban.
- Tenant rights regarding periodic tenancies (i.e. tenancies without a fixed term) have been bolstered.
Currently, landlords may end periodic tenancies without cause for termination. As part of the changes, periodic tenancies may only be ended by the landlord for one of the prescribed reasons which will include things like: the landlord wishing to sell the property within 90 days of the tenant leaving, carrying out extensive alterations, demolishing the property or changing the property’s use; or where the landlord has given the tenant three separate anti-social behaviour or late payment notices in the last 90 days and
has applied to the Tenancy Tribunal to end the tenancy.
If the landlord or their family wish to live in the property for at least 90 days, they may end periodic tenancies with 63 days’ notice. If the landlord has sold the home with a requirement for vacant possession, periodic tenancies may be ended with 90 days’ notice. In both these cases, the notice period is currently 42 days.
Furthermore, fixed term tenancies will convert to periodic tenancies at the expiry of their term unless: the parties mutually agree to extend, renew or end the tenancy; the tenant gives 28 days’ notice before the end of the tenancy for any reason; or the landlord gives notice that the tenancy is ending for one of the prescribed reasons for ending periodic tenancies discussed above.
In short, it will become harder for landlords to kick their tenants out without sufficient justification for doing so.
- At present, landlords through their tenancy agreements may ban assignments outright. With the changes, tenants will be able to request the tenancy be assigned and the landlord must not unreasonably decline such requests.
- Landlords will be required to disclose more to their tenants. This includes a breakdown of fees charged on the tenancy being assigned, subleased or ended before the fixed term is up, and disclosure of records relating to the property’s ‘healthy homes’ status.
- Tenants will be able to add minor fixtures to their property, for which they must currently seek landlord consent. These may include: visual fire alarms and doorbells, securing furniture to protect from earthquake risk or for baby proofing purposes; installing dishwashers, washing machines and curtains; and hanging pictures. There will be some circumstances where landlords can refuse such additions, but they are limited.
- The Tenancy Tribunal’s maximum amount of compensation rewardable will go from $50,000 to $100,000 and by default, complaints that are successful at the Tenancy Tribunal will be anonymised to protect the parties’ privacy.
The changes will be set out in an amendment bill and introduced to Parliament early next year. If you would like any further information on how these changes will work and how they could affect you, contact us.