As we explained in our last blog, new tenancy laws are coming into effect today. These new tenancy regulations have caused quite a bit of concern among landlords across New Zealand as the ‘balance of power’ appears to be shifting towards the tenant’s rights. However, we believe that an effective relationship between property managers, landlords and tenants, will ensure that all new laws will be successfully applied and will result in a positive outcome and tenancy for everyone.
So, what are the changes and what do they mean? In summary:
The changes which come into effect today are aimed at providing more security and power for tenants.
• Landlords will need a proper reason when they end someone’s periodic tenancy.
• All fixed-term tenancy agreements will automatically move onto a periodic tenancy, unless otherwise agreed.
• Tenants can make minor changes (painting the walls, hanging up pictures etc) and landlords can’t refuse.
• Rental property adverts must show a price, to avoid bid-offs between renters which drives prices up. Connect Realty has always done this.
• Tenants can request fibre broadband, and if it’s of no added cost to landlords, they can’t refuse.
• Successful applicants at the Tenancy Tribunal can now apply to have name suppression so they won’t be blacklisted.
• Landlords must consider all tenancy assignment requests, and not decline them unreasonably.
• The regulator (the Ministry of Business, Innovation and Employment) will be granted new powers to take action against parties not meeting their obligation.
• The Tenancy Tribunal can now impose fines of up to $100,000 where previously the maximum fine was $50,000.
As you are aware from our newsletters, Tenancy laws in New Zealand are under a process of substantial changes. It is important that both landlords and tenants understand the recent changes to tenancy law and how this will affect them.
All landlords, including boarding house landlords, must comply with the laws in the Residential Tenancies Act. The changes will happen at three key dates:
Phase 1: (already in force) 12 August 2020
Phase 2: 11 February 2021
Phase 3: By 11 August 2021
Here is a summary of Phase 1 law changes that are already in force (from 12 August 2020):
1.Transitional and emergency housing is exempt from the Act where the housing is:
- funded (wholly or partly) by a government department, or
- provided under the Special Needs Grants Programme.
This exemption is applicable for all people (new and existing clients) in transitional and emergency housing that meets the criteria above. Providers of transitional and emergency housing will still be able to opt into parts of the Act if they wish, by agreeing in writing with the client which parts will apply.
2. From 12 August 2020, rent increases are limited to once every 12 months. This is a change from once every 180 days (six months). Our rent increases webpage has more information on how this rule will apply. Any rent increase notices given to tenants from 12 August 2020 must comply with the new 12-month rule. If a notice was given before 12 August 2020, it is still within the 180-day rule.
Phase 2 law changes will take effect on 11 February 2021. Multiple changes to tenancy legislation will take effect. The changes will cover:
Security of rental tenure – Landlords will not be able to end a periodic tenancy without cause by providing 90 days’ notice. New termination grounds are available to landlords under a periodic tenancy and the required notice periods will change.
Changes for fixed-term tenancies – All fixed-term tenancy agreements will 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.
Making 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.
Prohibitions on rental bidding – 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).
Fibre broadband – Tenants can request to install fibre broadband, and landlords must agree if it can be installed at no cost to them, unless specific exemptions apply.
Privacy and access to justice – A suppression order can remove names and identifying details from published Tenancy Tribunal decisions if a party who has applied for a suppression order is wholly or substantially successful, or if this is in the interests of the parties and the public interest.
Assignment of tenancies – 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.
Landlord records – Not providing a tenancy agreement in writing is an unlawful act and landlords will need to retain and provide new types of information.
Enforcement measures being strengthened – The Regulator (the Ministry of Business, Innovation and Employment) has new measures to take action against parties who are not meeting their obligations.
Changes to Tenancy Tribunal jurisdiction – The Tenancy Tribunal can hear cases and make awards up to $100,000. This is a change from $50,000.
Phase 3 law changes will take effect by 11 August 2021. Tenancies can be terminated if family violence or landlord assault has occurred.
The below provisions must come into effect by 11 August 2021, but may come in earlier if the Government agrees (using an Order in Council):
Family violence: tenants experiencing family violence will be able to terminate a tenancy without financial penalty.
Physical assault: 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.
For more information about these changes and any other property management questions, please call our team. Otherwise, you can visit the below websites for more detailed information:
The official start of Summer is only a couple of weeks away and once again the Bay is ready for a summer full of events and visitors. Even though we don’t have the annual cruise ships this year, there a many Kiwi’s exploring the country and we expect lots of these local tourists to explore our amazing Region.
As we have spoken about in previous blogs, rental properties are still in short supply in the Bay area (this includes rental properties in Tauranga, Mount Maunganui, and Papamoa areas). We have many fantastic tenants waiting for their ideal home, this includes houses, units, and apartments both furnished and unfurnished.
With low-interest rates now is a great time to think about property investment and a great time to rent out that bach or second home that doesn’t get used as often as you would like. The returns on investment are excellent, and with our flat-rate Property Management fee, we can guarantee what your rental return will be. Furthermore, we have a strict selection process for screening tenants and we have regular comprehensive property inspections using the latest property management software.
If you choose to use us as your Property Managers, we have a secure Landlord Access Portal that you can access anytime from anywhere. This portal will provide you with tenancy information, from income and expenditure reports to tenancy details, at any time.
Our expertise includes over 20 years of real estate knowledge for the Bay area. We are a privately owned and operated business and we pride ourselves on our fantastic and friendly service.
So, if you have a property you would like to rent, or if you are considering becoming a property investor in the Bay area, give us a call today. We can walk you through the steps of what you need to do, including any legal requirements, discuss rental returns, and set you up with the perfect tenants as soon as you’re ready!
Freephone 0800 333 221
As professional property managers, we do our utmost to ensure all the appropriate measures are taking to avoid the need for insurance claims. Unfortunately, there are factors out of our control such as ‘third parties’ and unforeseen events. If you don’t have Landlord Insurance you might like to call us and find out how it can help you keep your rental under control. We can send you some useful information about our recommendation, REAL Landlord Insurance, which we believe to be the best insurance policy offered to landlords in New Zealand. It is exclusively offered ONLY to owners who have their property managed by a professional property manager.
‘REAL’ have developed a Landlord Preferred Policy, which is designed for Landlords of residential rental properties that are managed by an approved Property Management Company, such as Connect Realty, it provides cover that compliments your house insurance including:
• Loss of rent (More than 97% of claims have been for the loss of rent suffered by Landlords)
• Intentional damage (your building insurance may not cover the entire loss caused by damage by the tenant)
• Legal Liabilities
…and much more.
This Landlord Protection Insurance is preferred by the Real Estate Institute and is underwritten by NZI, a business division of IAG New Zealand.
Please ask for a more in-depth handout that you can revise in order to better inform yourselves of the policy benefits. We also will talk to you about premium costs/charges and the uniquely tailored Building Cover available.
Your policy and renewals will be managed by us, to protect you. So give the team at Connect Realty a call today to discuss insuring your investment property 0800 333 221.
With the arrival of spring now is the perfect time to get your investment property looking its best, including lawns and gardens and any necessary repair work to outside areas. A good place to start is removing any winter build-up of moss and mould around your rental property. Driveways and decks can become very slippery and may be hazardous for your tenants, particularly areas that have been shaded over winter. Driveways and decks can usually be waterblasted to remove moss and mould build-up. Products such as wet & forget are usually very effective for moss as is sugar soap for mould. Wash the exterior of your house, remove cobwebs and clean the windows to do away with any traces of the wet, cold winter. You might also need to fix minor problems such as decks or weatherboards that need replacement.
Property maintenance also includes ensuring your investment property is meeting all the necessary safety standards according to building code and Council regulations – particularly in relation to fencing around pools and laws about pergolas and decks. The Fencing of Swimming Pools Act states that all private outdoor pools must be fenced unless the walls of the pool are more than 1.2m above the ground, or the maximum depth is 400mm or less. The fence must surround the area immediately around the pool only. Gates should close and latch automatically. Older swimming pools are also required to adhere to the current standards, the most common reasons pool fences failed compliance is because they are not high enough, had gaps or gates that are not self-latching.
Another area where you need to be prudent is building consents. As a result of the Christchurch earthquake new building codes were introduced for decks, pergolas and other additions to your property. These new standards aim to protect residents and the public from ‘unsafe’ building practices. For your Tauranga, Mount Maunganui and Papamoa property please see the Tauranga City Council guidelines which outline when a consent is needed.
If you have any questions relating to this blog please feel free to phone on 0800 333 221, as your Property Managers we are more than happy to give advice or put you in contact with the correct agency.
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