Changes to the Residential Tenancies Act

 

Changes to the Residential Tenancies Act

The Residential Tenancies Act 1986 (“the RTA”) is undergoing a series of changes, which are being implemented in three phases.  The changes started in August 2020 and will now be followed by a series of amendments coming into effect today (11 February) and later this year in August.  Below is a summary of the changes coming into effect today, as it is important for landlords and tenants to be aware of their rights and obligations moving forward. 

Tenancy Tribunal jurisdiction

The Tenancy Tribunal’s jurisdiction to hear cases and make awards has been increased from $50,000 to $100,000.

Ending periodic tenancies

Previously, periodic tenancies could be ended within:

  •  90 days for any reason, with no requirement to tell the tenant why the tenancy was ended.
  •  42 days where the owner or their family required the property to live in, the property was needed for an employee, or the property had been sold with a requirement for vacant possession.
  •  A notice period determined by the Tenancy Tribunal where the landlord applied to end the tenancy because the tenant was 21 days in rent arrears, assaulted or threatened the landlord, caused or threatened to cause substantial damage, or had not complied with a notice to remedy a breach.

Under the new law periodic tenancies can only be ended for one of the following prescribed reasons:

  •   With 14 days’ notice where the tenant has physically assaulted the landlord or their family, and the Police lay a charge.
  •   With 63 days’ notice where the owner or their family require the property to live in, or where the landlord customarily uses the property for housing employees or contractors and the property is needed for this purpose, as long as this was specified in the tenancy agreement.
  •  With 90 days’ notice where:
    •  The landlord intends to sell the property.
    •  The property has been sold with a requirement by the owner for vacant possession.
    •  The landlord is not the owner, and their interest in the property ends.
    •  The property needs to be vacant to facilitate the use of nearby land for a business activity if this was specified in the tenancy agreement.
    •  The landlord wants to change the usage of the property to a commercial use.
    •  The landlord intends on undertaking major renovations on the property and it would be impractical for the tenant to continue to live there. The landlord must take material steps to undertake these renovations, such as applying for appropriate consents, within 90 days of the tenancy terminating.
    •  The premises are to be demolished.
    •  Reasons specific to social housing tenancies.
  •  With a notice period determined by the Tenancy Tribunal where the landlord applies to end the tenancy because:
    •  They have issued the tenants three notices for separate anti-social acts in a 90-day period.
    •  They have given the tenants notice that they were at least 5 working days late with their rent payments on three separate occasions within a 90-day period.
    •  The landlord will suffer greater hardship than the tenant if the tenancy continues.
    •  The existing provisions relating to rent arrears, assault, substantial damage and breaches.

Minor changes to the premises

Previously the landlord could reasonably withhold consent from tenants requesting to make a minor change to the premises.

Under the new law, tenants are entitled to make minor changes to the premises. What constitutes a minor change is not entirely clear, but the Ministry of Housing and Urban Development has provided some guidance on the matter and suggested that the following traits may be relevant in determining a minor change:

  •  There is a low risk of damage to the property.
  •  The change can be remediated easily.
  •  It does not pose a health and safety risk.
  •  It does not impact third parties.
  •  It does not require a consent, such as a building consent.
  •  It does not breach bylaws, covenants or other obligations.

Examples of minor changes are installation of appliances, baby gates, shelving, window coverings or picture hooks, or securing shelving or furniture to the walls or floor.

The landlord can impose reasonable conditions on how the change is carried out, and the tenant must remediate the change once the tenancy ends.

Landlords may still decline requests for minor changes in some circumstances. For instance, if restoration of the property will not be possible after making the change, it will compromise the structural integrity of the building, or it breaches some other obligation that the landlord has, such as a body corporate rule.

Fixed-term tenancy agreements converting to periodic tenancies

This used to happen where no notice was given to the tenant between 21 and 90 days before the tenancy ended, or the parties agreed to a new fixed term tenancy.

Now the landlord is only able to unilaterally end the periodic tenancy by giving one of the reasons for ending periodic tenancies. The tenant may end the periodic tenancy by giving any reason at least 28 days before the tenancy ends. The parties can also agree to end, extend of renew the fixed-term tenancy. If the fixed term tenancy is not ended in one of these ways, then it will convert into a periodic tenancy. This means that for a landlord to prevent a fixed-term tenancy from converting into a periodic tenancy, they will need the tenant’s consent unless they are able to fit into one of the new grounds for ending a periodic tenancy.

Rental bidding

No rental bidding can be sought by landlords or agents, but tenants are able to pay more for a property if they want. Properties are not allowed to be advertised without a rental price listed

Rent increases

Rent may now only be increased every 12 months, rather than every 6 months.

Privacy in Tenancy Tribunal decisions

The new law will tighten up provisions around name suppression, with the Tenancy Tribunal being able to suppress names and other identifying information.

Fibre broadband

Landlord must now accept a tenants request for installation of fibre if it can be done for free. Landlords may only decline a request where:

  •  It will materially compromise the building’s weathertightness, character or structural integrity;
  •  It will breach another obligation relevant to the tenancy or premises; or
  •  The landlord is going to carry out major renovations. 

Assignment

Assignment requests for fixed-term tenancies must now be considered and not unreasonably declined by landlords. Provisions in tenancy agreements that prohibit assignments now have no effect, except for social housing tenancies.

Providing information

Landlords were not required to provide a breakdown on fees for assignment, subletting, or ending a tenancy, but will now need to do so to allow tenants to assess whether the fees are fair.

Landlords will now also need to provide records to tenants on request relating to the healthy home standards.

Enforcement of the RTA

A new infringement offence regime will be bought in for straightforward breaches of the RTA. Infringement notices, improvement notices, and enforceable undertakings will all be a part of this regime

If you have any other questions about these changes and how they may affect you, then please get in touch with a member of our team.