Landlords, tenants must read: wide sweeping tenancy law reform coming next month
Revolutionary tenancy law reform, passed by the previous coalition Government, comes into effect in four weeks’ time, affecting about 600,000 properties which are home to around 1.5 million New Zealanders.
From Thursday, February 11, the law swings further more firmly in favour of tenants to give more security and rights to them in what the politicians hope will be more of a European-style rental climate.
As house prices climb and tenancies rise, the law passed in 1986 was seen to be extremely outdated and had never been significantly reformed.
The Residential Tenancies Amendment Act became law last August but most of the toughest changes don’t become effective till next month.
Although landlords must now give 90 days’ notice versus the tenants’ 21 days, tenants could get a far more benign environment shortly.
First, the stakes become much higher: the Tenancy Tribunal’s ability to make awards against a bad landlord or bad tenant rises from $50,000 to $100,000.
One of the most controversial and biggest changes is an end to no-cause terminations: landlords won’t be able to axe tenancies without a lawful reason from next month, meaning they can’t just give the 90 days’ notice.
From next month, it will be much harder to evict a tenant. The tenancy can still be ended if the landlord proposes to sell but instead of the landlord giving 42 days, it becomes 90 days.
Landlords will be able to give other reasons but they will need to be real such as demolishing or changing the premises’ use. Three notices for anti-social behaviour is one reason under the changed law, or if the tenant is five days late with the rent on three separate occasions.
Landlords will have to issue a tenant three written notices for separate anti-social acts within 90 days then apply to the Tenancy Tribunal to terminate the tenancy.
Other reasons to seek eviction are:
• if the tenant has been at least five working days late with rent on three separate occasions within 90 days;
• where the landlord will suffer greater hardship than the tenant if the tenancy continues;
• where the landlord or a member of their family or employee requires the premises as their principal place of residence.
From last August, it became illegal to raise rents every three or six months and instead is now limited to annually.
From next month, landlords or managers will be banned from advertising places for rent without specifying the exact price. That will effectively outlaw rent bargaining or rental auctions.
“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,” according to Tenancy Services.
Nor will landlords be able to ban tenants from perhaps painting an interior wall a different colour: “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,” Tenancy Services says.
On fibre broadband, tenants can from next month request to install fibre broadband and landlords must agree if that can be installed at no cost to them, unless specific exemptions apply, Tenancy Services says.
On privacy and access to justice, suppression orders can remove names and identifying details from published Tenancy Tribunal decisions. It could be harder for landlords or managers looking at old decisions to find a tenant’s name, even if there has been a ruling against them.
Below is a chart released in November showing Auckland average weekly rents from Barfoot & Thompson.
From next month, all requests by a tenant to assign a tenancy to another person must be considered.
“Landlords cannot decline unreasonably. If a residential tenancy agreement prohibits assignment, it is of no effect,” Tenancy Services says.
On landlord records, not providing a written tenancy agreement will be illegal and landlords will need to keep and provide new types of information from February 11.
The state’s arm is also strengthened to handle difficult cases. The Ministry of Business, Innovation and Employment will have new measures to take action against parties who are not meeting their obligations.
And if all that is not enough to digest, more changes occur on August 11 this year.
Tenants suffering from family violence will be able to end a tenancy without financial penalty.
Also by August, a landlord will be able to issue a 14-day notice to evict 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.
Landlords strongly fought against the changes, saying they will drive up rents because investors will decide the risks outweigh the benefits and pull their properties off the rental market.
Some landlords will also sell because they will find life too hard, the landlords said at the time the changes were proposed.
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