Apr 1, 2021 8:30:15 AM

Tenancy Reforms: An Update For Landlords

Topics: Investment Property, Buying and Selling Property 0

In what’s been described as the biggest overhaul of tenancy laws in thirty-five years, a number of tenancy reforms came into effect in February 2021. The bulk of these reforms have been designed to improve the wellbeing of renters and address issues like instability, uncertainty, and disruption to tenants and their families. If you are a landlord or a renter, here is an outline of the tenancy reforms already in force and those still to come.

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Phase 1 – From 12 August 2020

Rent can only be increased every 12 months

Rent increases are now limited to once every 12 months, a change from the previous rule of once every 180 days (six months). Any rent increase notices given to tenants from 12 August 2020 must comply with the new 12-month rule.

Phase 2 – From 11 February 2021

No cause notices

Under the new law, landlords may not end a periodic tenancy without reason, doing away with “no cause” notices of the past. Instead, to end a tenancy, landlords must provide a reason which meets the criteria specified in the law.

Landlords can apply to the Tenancy Tribunal to end tenancies if the rent is unpaid for 21 days or more, or in cases of repeated antisocial behaviour from the tenant, landlords will be required to issue a tenant with three notices for separate anti-social acts within a 90-day period before they can apply to the tribunal to end the tenancy.

Notice period

Landlords must give tenants 90-days’ notice if they are selling their rental property or planning extensive alterations or redevelopment, or changing it to a commercial premises. Landlords can give 63-days’ notice if either they or a family member intends to move into the property.

The notice period a tenant is required to give a landlord has gone up from 21 days to 28 days. Tenants can also request to reassign a tenancy and all requests must be considered by the landlord and cannot be declined unreasonably.

Fixed-Term Tenancies

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

Alterations to rental property

In the past, tenants were not legally able to make alternations of any type to their rental property, unless approved by the landlord. But this has now changed, and tenants can request permission to make changes to the property and landlords may not decline if the change is minor. That means alterations like hanging pictures or baby-proofing cupboards

should now be acceptable. Tenants will be responsible for any costs and they may not proceed with any alterations without permission from the landlord.

Tenants can also request to install fibre broadband, and landlords must agree if it can be installed at no cost to them.

Stopping rental bidding

Rental properties may not be advertised without a rental price listed, and landlords cannot invite tenants to bid on the rent – pay more than advertised to secure the rental.

To find out more about changes to the Residential Tenancies Amendment Act 2020, visit the legislation.govt.nz website.

Phase 3 – Before 11 August 2021

Family violence

Tenants experiencing family violence will be able to terminate a tenancy with two days’ notice without financial penalty. Similarly, a landlord will be able to issue a 14-day notice to terminate the tenancy if the tenant has assaulted the landlord, the owner, a member of their family, or the landlord’s agent, and the Police have laid a charge against the tenant in respect of the assault.

Positive changes to the rental sector

In the long-term, the reforms will be good for the rental sector, ensuring more rights and better protection for tenants. If you are a landlord and you are concerned about the complexity of the reforms, it may pay to get in touch with a property manager, like Harcourts.

With an experienced and knowledgeable team of team of property managers alongside you, you’re assured of peace of mind when it comes to understanding and addressing tenancy rights and responsibilities.

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