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Residential tenancy law - more changes!

Further Residential Tenancies Act reforms became law on 11 August 2020. This article looks at some of the reforms, which seek to align New Zealand’s residential tenancy laws with the realities of renting.

Just last year we wrote an article about the changes to the Residential Tenancies Act 1986 (Act) brought in by the Residential Tenancies Amendment Act 2019.

Now the Residential Tenancies Amendment Act 2020 (Amendment Act) has become law as of 11 August 2020. However, the commencement date of certain provisions of the Amendment Act are staggered.

As of 12 August 2020 rent increases are limited to once every 12 months. The provisions specifying that certain transitional and emergency housing is not covered by the Act also came into effect on this date.

On 11 February 2021, most of the remaining reforms take effect (excluding the reforms relating to family violence and assault of a landlord – not discussed here).

One of the key new reforms is granting the tenant security of rental tenure. From 11 February 2021, landlords will not be able to end a periodic tenancy without a reason just by providing 90 days’ notice.

In order to end a periodic tenancy, a landlord will need to apply to the Tenancy Tribunal to end the periodic tenancy. In addition to the existing grounds for applying to the Tenancy Tribunal to end a tenancy (relating to rent arrears, damage, assault and breaches), a landlord may also now apply on one of the following grounds:

  • The landlord has issued the tenant three notices for separate anti-social acts in a 90-day period.
  • The landlord has given notice that a tenant was at least five working days late with their rent payment on three separate occasions within a 90-day period.
  • The landlord will suffer greater hardship than the tenant if the tenancy continues.

If an order to end the tenancy is granted, the notice period will be determined by the Tenancy Tribunal.

A landlord may still end a periodic tenancy upon notice as follows (the ability to terminate on these grounds previously existed – the notice periods will just increase with effect from 11 February 2020):

  • 63 days notice is now required where the owner of a property requires the residence as their principal place of residence or for occupation by employees or contractors of the landlord.
  • 90 days notice is required if the property is to be sold or if extensive alterations are to be carried out, or if the property is to be demolished.

There are also changes for fixed term tenancies. All fixed-term tenancy agreements will convert to periodic tenancies at the end of the fixed-term unless (before the expiry) the parties agree otherwise, the tenant gives a 28-day notice, or the landlord gives notice in accordance with the termination grounds for periodic tenancies.

Further reforms include:

  • Tenants can ask to make changes to the property and landlords must not decline if the change is minor.
  • Rental properties cannot be advertised without a rental price listed, and landlords cannot invite or encourage tenants to bid on the rental (pay more than the advertised rent amount).
  • A tenant can request the landlord to install fibre broadband, and landlords must agree if it can be installed at no cost to them, unless specific exemptions apply.
  • All requests to assign a tenancy must be considered. Landlords cannot decline unreasonably. If a residential tenancy agreement prohibits assignment, it is of no effect.
  • Not providing a tenancy agreement in writing will be an unlawful act.

There are a number of experts in our office available to assist you with enquiries in relation to your tenancy agreements.  Please contact Erica Quilter of our commercial team for non-contentious tenancy advice, or Jessica Gilby-Todd in our litigation team for advice in relation to tenancy-related disputes.

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.

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Erica Quilter

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