Phase 2 Of New Tenancy Laws – Property Management Update

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:

More information about the reform of the Residential Tenancies Act 1986  (Ministry of Housing and Urban Development)

Residential Tenancies Amendment Act 2020  (New Zealand Legislation website)