Residential Tenancy Law Changes - Impact on Landlords and Tenants

On 12 August 2020, the Residential Tenancies Amendment Act 2020 (“the Act”) came into force. The amendments to the Residential Tenancies Act affect both landlords and tenants. Two changes have already taken effect, while other changes will come into force later. The intention of the Act is to modernise rental laws in accordance with present-day realities of renting. This article covers what you can expect from the changes.

The following changes came into force on 12 August 2020:

• Any government funded accommodation for transitional and emergency housing is exempt from the Residential Tenancies Act.
• Rent increases are now limited to once every 12 months. Rent increases were previously limited to once every 6 months. Landlords giving rent increase notices to tenants must now comply with the new 12-month rule.

The following changes came into force more recently on 11 February 2021:

Periodic Tenancies

A major change relates to the termination grounds available to landlords under a periodic tenancy.

Landlords are no longer able to terminate a periodic tenancy without cause by providing 90 days’ notice. Instead, they must now give a reason, which meets the criteria specified in the Residential Tenancies Act, to end a periodic tenancy.

However, landlords can provide 14 days’ notice to terminate a tenancy if a tenant assaults the landlord, a member of the landlord’s family, or the landlord’s agent (a tenant can still challenge this in the Tenancy Tribunal and the landlord would have to prove the assault).

Landlords can also issue a 63-day notice to terminate a periodic tenancy where the landlord or a member of the landlord’s family requires the property as their principal place of residence or where the property is required for occupation by employees or contractors of the landlord.

 A 90-day notice can be issued to terminate a periodic tenancy where the property is to be sold, where alterations to the property are to be carried out, where the property is to be converted into a commercial property, or where the property is to be demolished. Where a landlord gives notice to terminate a tenancy by the property being sold, that property must be put on the market within 90 days of the tenant leaving.

The notice period for tenants to terminate a periodic tenancy has also increased to 28 days (it was previously 21).

Landlords can also apply to end a periodic tenancy through the Tenancy Tribunal if the tenant receives three notices for separate anti-social acts within a 90-day period, or where the tenant has been at least five working days late with rent payment on three separate occasions within a 90-day period.

Fixed-term Tenancies

Fixed-term tenancies entered into from February 11, 2021 will now automatically convert to periodic tenancies at the end of the fixed term.

The fixed-term tenancy will convert unless the landlord and tenant agree to extend, renew or end the tenancy, the tenant gives notice, or the landlord gives notice using one of the specified reasons listed in the Residential Tenancies Act for terminating a periodic tenancy.

Family Violence

Tenants who are experiencing family violence can now withdraw from a tenancy with two days’ notice and without financial penalty.

Minor Changes

Tenants can ask to make changes to the property and landlords must not decline if the change is minor. Landlords must respond to a tenant’s request to make a change within 21 days.

Landlords can place conditions around how a minor change is carried out and tenants must restore the property to the previous condition if the landlord does not want the changes to remain after the tenancy ends.

Landlords must respond to requests from tenants to make changes in writing within 21 days.

There are a few reasons where a landlord can decline a request for a minor change, including where:

• The proposed change presents more than a low risk to install/remove.
• The property cannot be restored to its previous condition due to the proposed change.
• The proposed change poses a health and safety risk, would disturb hazardous materials, or would compromise the structural integrity, waterproofing or fundamental safety or character of the property.
• The proposed change requires a regulatory consent or breaches an obligation such as a body corporate rule.

Minor changes include:

• Installing fire alarms and doorbells, where they have low impacts.
• Securing furniture to make baby-proof or protect against earthquake risk.
• Installing a baby gate.
• Installing curtains.

Fibre Broadband

Tenants can now request to install fibre broadband, and landlords must agree to the installation if there are no costs to them.

Landlords can decline to install fibre broadband where the installation would:

• Compromise the weathertightness of the building.
• Compromise the structural integrity of the building.
• Breach an obligation relating to the property.
• Impede work which the landlord intends to begin on the property.

Assignment of Tenancies

All requests from a tenant to assign a tenancy must be considered by landlords and cannot be unreasonably declined.

Clauses in a tenancy prohibiting assignment are now of no effect.

Records

There are obligations for landlords to provide information to tenants, including:

• A breakdown of any fees charged in relation to assigning, subletting, or ending a tenancy.
• Records relating to healthy homes standards.

The Ministry of Business, Innovation and Employment can also require landlords to provide documents such as records of building work, electrical work, gas fitting, and plumbing, any advertisements of the tenancy etc.

Enforcement Measures

Enforcement measures have been strengthened. The Ministry of Business, Innovation and Employment) has new measures to take action against parties who do not meet obligations.

The Tenancy Tribunal can also now make awards of up to $100,000 (the limit was previously $50,000).

The team at DTI Lawyers are happy to assist you with any questions relating to the changes and how they affect your tenancy. There are many changes that will affect both landlords and tenants and we are available to discuss the changes and how they relate to your specific context if necessary. You can contact our experts on Phone 07 282 0174.