As of 1 October 2010, changes to the Residential Tenancies Act 1986 (“the Act”) have come into effect. If you are a landlord or tenant these changes will affect your obligations and responsibilities in respect of residential tenancies.

In recent years we have seen the demand for rental properties grow. As a result, the rental property market has become increasingly important as has the demand to meet the needs of those who choose, or need, to rent housing.

Changes to the Act have been aimed to better meet the needs of both landlords and tenants in today’s rental property market. It became apparent that the former legislation governing residential tenancies was in need of review and amending to provide adequate provision for good quality, stable rental housing in New Zealand.

Some of the key changes to the Act include:

• Letting Fees
• Fixed Term & Short Term Tenancies
• Address for Service
• Landlord to appoint Agent if overseas
• Body Corporate Rules
• Notices to Remedy
• Unlawful Acts
• Abandoned Goods
• Boarding Houses

Also available are forms for new tenancies, FAQs and Property manager Toolkits

Letting Fees – all Property Managers (REINZ and Independents) are now referred to as “Letting Agents” who are able to charge a letting fee. Under the former legislation only REINZ members and lawyers had the ability to charge a letting fee.

Fixed Term & Short Term Tenancies – previously a Landlord could take a new tenant under a short term fixed tenancy, essentially as a trial period. The Tenancy Tribunal will now be able to over-rule trial tenancies of less than 90 days in duration. Fixed term tenancies will also now revert to periodic tenancies upon expiry, unless the tenant has given notice to the landlord.

Address for Service – Landlord and Tenants will now have the ability to provide a Post Office box, email address or facsimile number as an address for service.

Landlord to Appoint Agent if Overseas – if a Landlord is absent from New Zealand for a period exceeding 21 days, they must appoint a New Zealand based agent. Details of the agent appointed (including the agents name, contact details and address for service) must be supplied to the tenant. If a bond is held in respect of the tenancy, the Landlord must also notify the Tenancy Bond Centre.

Body Corporate Rules – residential tenancies of Unit Title properties are now subject to the Body Corporate Rules and a copy of the Body Corporate Rules must be attached to the Tenancy Agreement.

Notices to Remedy – the former 10 working day notice period has now been extended to 14 consecutive days.

Unlawful Acts –

The following responsibilities of a tenant have become unlawful acts, punishable with damages payable to a Landlord:

• If a tenancy fails to comply with a termination order – $1000.00
• Using of permitting the premises for an unlawful purpose – $1000.00
• Harassing other tenants or neighbours – $2000.00
• Assigning or subletting the property without the landlords consent – $1000.00
• Abandoning the premises without reasonable excuse, with rental arrears – $1000.00
• Interference with means of escape from fire – $3000.00
• Intentional breach of a works order – $3000.00
• Exceeding the maximum number of tenants – $1000.00

The following responsibilities of a Landlord have become unlawful acts with damages payable to the Tenant:

• Unlawful discrimination – $4000.00
• Failure to appoint agent when absent from New Zealand for more than 21 days – $1000.00
• Requiring key money – $1000.00
• Landlord demanding bond greater than amount permitted – $1000.00
• Requiring unauthorized form of security – $1000.00
• Landlord requiring rent more than 2 weeks in advance or before rent already paid expires – $1000.00
• Landlord failing to provide receipts for rental paid – $200.00
• Landlord seizing or disposing of tenant’s goods – $2000.00
• Interference with tenants privacy – $2000.00
• Failing to meet obligations in respect of cleanliness, maintenance or building or health and safety requirements – $3000.00
• Unlawful entry – $1000.00

Abandoned Goods – tenants goods left at the property upon termination of the tenancy can be disposed of as follows:

1. Foodstuffs and other perishable items can be immediately disposed of;

2. In respect of other goods, a landlord must make reasonable efforts to contact a previous tenant and come to some form of agreement as to a timeframe in which the tenant can collect the goods.

3. If the landlord is unable to contact the tenant, or if the landlord and tenant cannot agree upon a collection timeframe, or if a tenant fails to collect goods within an agreed timeframe, a landlord must arrange for the goods to be placed in a safe storage.

The landlord can then apply to the Tenancy Tribunal for a disposal order, or he or she can get a market value assessment of the goods. If the market value assessment is less than the cost of storage, transporting and selling the goods, the landlord has the ability to then immediately dispose of the goods. If however the market value assessment is greater than the cost of storage, transporting and selling the goods, the landlord must secure the goods for not less than 35 days after the goods can be sold for a reasonable market price with personal documents surrendered to the Police.

The Landlord can then apply to the Tenancy Tribunal for an order specifying the amount owing to the landlord from the tenancy from the sale proceeds. The landlord will not be liable in respect of the goods sold nor can the previous tenant claim them back from any purchaser.

Boarding Houses – these will also now be governed and come under the Residential Tenancies Act.

The above is a brief overview of the changes to the Act. If you have any concerns or require further information please contact us.