Residential Tenancies Amendment Act

After a comprehensive review the Residential Tenancies Amendment Act was passed in to law at the end of July 2010. It is a result of years of review and is warmly welcomed by most in the industry who agree there is a need for more clarification and balance between landlord and tenants’ rights and obligations.

The focus of the changes has been to give greater protection to both landlords and tenants. This includes extending the Act to cover more tenancies, including boarding houses, and introducing clearer guidelines for terminating and renewing tenancies. There has also been an addition of a number of unlawful acts, with increased fines and exemplary damages able to be awarded by the Tenancy Tribunal. Previously there were few disincentives for landlords or tenants who failed to meet obligations, but now the addition of new unlawful acts aims to encourage greater compliance.

Although there is an addition of new unlawful acts and increased monetary penalties for failure to comply most landlords should not be too alarmed by the changes. The majority of property owners that have properties managed meet obligations under the Residential Tenancies Act so if anything the new amendments impose more on tenants. If landlords continue to meet these obligations then they need not worry about the increase in fines as it won't affect them. However, there are changes that will affect the way tenancies operate and in particular the way they are managed. If your properties are under management then your property manager will be responsible for most of the changes that will come into affect. If you manage your own properties then you should make yourself familiar with the amendments as they will definitely impact on you.

Some key changes include:

• Increasing the fines to $3000 for landlords who fail to complete required maintenance and provide substandard housing
• Increasing the monetary jurisdiction of the Tenancy Tribunal from $12,000 to $50,000
• All landlords must appoint an agent if out of New Zealand for more than 21 consecutive days and notify the tenants of the agents details
• Increasing the fines for tenants harassing neighbours up to $2000 and exceeding the number of residents on the property up to $1000
• Tenants abandonment of property or failure to vacate property is also an unlawful act with fines of up to $1000
• Allowing parties to pass on reasonable debt collection costs and Tenancy Tribunal application fees
• If a landlord has goods left behind after a tenancy he can now dispose of the goods if he has a market assessment which confirms the value of the goods is less than the cost to transport, store and sell them
• The requirement of all Body Corporate rules (where applicable) to be provided to tenants and form part of the tenancy agreement
• Fixed Term and Trial Tenancies must be a minimum of 90 days
• An address for service has been extended to also include a PO Box number, email or fax
• The requirement of 10 working days notice for any breaches of agreements has been changed to 14 days
• In the case of a mortgagee sale a tenant on a fixed term can give the same 21 days notice as a tenant on a periodic tenancy
• At the expiry of a fixed term tenancy the tenancy will continue as a periodic tenancy under the same terms and conditions, unless either party gives required notice that they do not wish to continue the tenancy. This notice must be issued no earlier than 90 days prior to the expiry of a tenancy and no less than 21 days before the expiry date.

 
Failure to abide by all of the above will be deemed to be an unlawful act.

The amendments are expected to come in to effect from 1 October 2010.The Department of Building and Housing will shortly release further guidelines and run workshops for landlords and tenants. For further information on the Residential Tenancies Amendment Bill contact the Department of Building and Housing.

Simon Allen
Allen Realty Ltd

You may also be interested in our recent article Increased Exemplary Damages for Unlawful Acts