Big shake-up of residential tenancy laws

Topics covered in this article: Home Owners, Property

Jasnoor Kaur

Solicitors

Law Clerk

Phone: +64 7 578 2099
Email: jkaur@clmlaw.co.nz

Bachelor of Laws (Hons)

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It is important for residential tenants and landlords to understand the recent changes to residential tenancy laws in New Zealand.

Changes were introduced via the Residential Tenancies (Healthy Homes Standards) Regulations 2019 and the Residential Tenancies Amendment Act 2020. The changes comprise the biggest shake-up of residential tenancy laws in a generation. A summary of the key changes is outlined below.

Introduction of healthy homes standards

The standards include minimum requirements for rental properties regarding:

  • Heating.
  • Insulation.
  • Ventilation.
  • Moisture ingress and drainage.
  • Draught stopping.
  • Landlords need to include a healthy homes compliance statement in all new or renewed tenancy agreements.

Rent increase

Landlords can only increase once every 12 months.

Security of rental tenure

Landlords can no longer terminate a periodic tenancy without cause simply by providing 90 days’ notice.

Changes for fixed term tenancies

Fixed term tenancies signed on or after 11 February 2021 will convert to periodic tenancies at the end of the fixed term unless:

  • The existing tenancy agreement is specifically renewed.
  • Before the expiry date, the parties agree not to continue the tenancy.
  • If at least 28 days before the expiry, the tenant gives the landlord written notice not to continue with the tenancy.
  • The landlord gives notice in accordance with the termination grounds for periodic tenancies.

Termination of periodic tenancy on 63 days’ notice

Landlords may terminate a periodic tenancy by giving 63 days’ notice if:

  • The landlord or a member of the landlord’s family requires the property as their primary place of residence for at least 90 days.
  • The property is required for occupation by employees or contractors of the landlord.

Termination of a periodic tenancy on 90 days’ notice

Landlords may terminate a periodic tenancy by giving 90 days’ notice if:

  • The landlord intends to put the property on the market for sale within 90 days of termination.
  • The landlord is required to give a 90 days’ notice under an unconditional sale.  
  • The landlord’s interest in the land is coming to an end.
  • The premises are to be converted to commercial premises.
  • Extensive refurbishments or redevelopments are to be carried out.
  • The property is to be demolished.

Enhanced penalties for landlords with six or more tenancies

A landlord who has six or more tenancies consisting of individual tenancies or a boarding house may be subject to enhanced penalties for  breaches of landlord obligations.

  • The six or more tenancies can be captured through various situations such as where a husband and wife own three rentals each. In that case, both would be deemed to have six tenancies.
  • The maximum pecuniary penalty for landlords with six or more tenancies is $50,000 (whereas the maximum penalty for landlords with five or less tenancies is $3000).

Introduction of a “three strikes” rule

If within a period of 90 days:

  • A tenant commits three separate acts of either antisocial behaviour (discussed below) or failure to provide rent (discussed below); and
  • The landlord gives appropriate notice on each of the three occasions

Then the landlord may make an application to the Tenancy Tribunal to terminate the tenancy.

In respect of antisocial behaviour, the landlord must give the tenant a notice in respect of each incident, and that notice must meet certain criteria. The threshold for antisocial behaviour includes:

  • Harassment.
  • Alarm.
  • Distress.
  • Nuisance more than minor.

In respect of the failure to pay rent, essential elements include:

  • If the tenant fails to pay a minimum of five working days rent then the landlord can issue a notice to the tenant. Again, the notice must meet certain criteria.
  • The Landlord must give three notices within a period of 90 consecutive days.

Compliance and enforcement

The new compliance and enforcement regime has 23 new infringement offences targeted against landlords alone. Penalties for infringement have increased between 50 and 80 percent.

Minor changes to premises

Landlords are unable to withhold consent from tenants seeking to make minor changes to the premises.

  • The landlord can place reasonable conditions on minor changes, such as reinstating the changes at the end of the tenancy.
  • Minor changes are likely to include painting a wall, replacing the curtains, or hanging a shelf. These are things that do not require any structural alteration, consent, do not breach any bylaws, and would allow the premise to be returned easily to substantially the same condition.

Larger alterations to premises

Landlords cannot unreasonably withhold consent from tenants seeking to make larger alterations to the property.

  • The landlord can place reasonable conditions when granting consent but unlike minor changes, there is no statutory provision of reinstatement.
  • Larger changes are likely to include any renovation, alteration, or addition to the premise.

Assignment of tenancy

Any clause in a tenancy agreement preventing the tenant from assigning their tenancy no longer has effect. Tenants can assign residential tenancies upon obtaining the landlord’s consent, which cannot be unreasonably withheld.

Landlord records

Not providing a tenancy agreement in writing is an unlawful act. Accordingly, landlords should be careful not to enter agreements verbally.

Tenancy tribunal jurisdiction

The tenancy tribunal can now hear cases and make awards up to $100,000.

Family violence

Tenants experiencing family violence will be able to withdraw from a tenancy without financial penalty. The tenant must provide two days’ notice and evidence of the family violence (such evidence may comprise a court order).

Physical assault

A landlord will be able to issue a 14 day notice to terminate the tenancy if the tenant has assaulted the landlord, owner, a member of their family or the landlord’s agent and the police have laid a charge against the tenant.

 

 

 

Updated: 3 June 2021