Legislative changes coming into effect from Thursday are set to give renters more protection as landlords can no longer end tenancies without cause.
The Residential Tenancies Amendment Act now limits rent increases to once every 12 months. And from Thursday, many more changes will take effect. There are new notice periods for ending periodic tenancies and fixed term tenancies will automatically roll over to periodic.
Tenants who have signed up to a periodic tenancy will be required to give their landlord 28 days' notice. Landlords can only end tenancies for specific reasons, requiring a 63-day or 90-day notice period.
Describing the incoming changes as largely "pro-tenant", New Zealand Property Investors Federation CEO Sharon Cullwick said the purpose of the Act changes was to give tenants more security.
But as removing antisocial tenants will now cost landlords time and money, they're likely to take less risks. As a result, some renters might find it harder to find a place to live.
"Our main concern is the inability to remove a tenant from [a] property on a 90-day no cause termination...now a landlord must collect three forms of antisocial behavior within a 90-day period and apply to the Tenancy Tribunal to have the tenant removed," Cullwick explained.
"An unexpected consequence means[s] anyone who is a marginal tenant will find it hard to rent a property from a private landlord."
To help renters and their landlords understand the changes, Newshub spoke to the Ministry of Business, Innovation and Employment (MBIE) and Ray White.
Existing rules: rent increases
1. How often can my rent go up and how much notice do I get?
From August 12, rent increases are limited to once every 12 months.
Ray White head of property management Zac Snelling confirmed that under the Act, tenants can expect to receive a minimum of 60 days' notice in writing before the increase takes effect.
"Any rent increase must come with at least 60 days' notice, allowing ample time for a tenant to talk with their landlord if they feel the increase is unfair or not at a market level," Snelling said.
Market rents can be checked online through Tenancy Services, Trade Me Property and realestate.co.nz. Tenants who feel the amount of a rent increase is unfair are urged to talk to their landlord before going to the Tenancy Tribunal.
"We recommend tenants are proactive in this process and communicate with their landlord...it's not in their best interests to be in a scenario where they fail to pay rent and fall into arrears," Snelling added.
2. As a long-term tenant, I'm getting cheap rent. Can my landlord bump it up to market rates?
As there's no cap on rent increases, landlords have the option to increase the rent inline with market rates.
In this situation, landlords may weigh up the value of keeping a good tenant and their ability to pay a new, higher amount against generating more income from their property.
New rules: ending a tenancy
1. What is the notice period for tenants?
The notice period for tenants on periodic tenancy agreements has increased.
Steve Watson, MBIE national manager tenancy compliance and investigations confirmed that from February 11, tenants are required to give landlords 28 days' notice (formerly 21 days).
From August 11, 2021, further changes under the Act will allow tenants experiencing family violence to end a tenancy with two days' notice (evidence applies).
2. How can landlords end a tenancy?
Under the Act, landlords will no longer be able to give tenants 90 days' notice without giving a reason, meaning tenants will know why the tenancy is ending.
Landlords can give tenants notice if they intend to live in the property, put it up for sale or carry out renovations.
Landlords can also apply to end tenancies if rent is unpaid for 21 days or more, or in cases of repeated antisocial behavior (see questions 3 and 4).
If the landlord or a family member wants to move in, they're required to give tenants 63 days' notice. The same option applies for an employee (if specified in the Tenancy Agreement).
"They must move in within 90 days of the termination date and must live in the property for at least 90 days," Watson said.
"No proof needs to be provided to a tenant at time of notice, however, if challenged at the Tribunal a landlord would need to prove this is legitimate," Snelling added.
Selling, renovating or property demolished
If a landlord decides to put their property up for sale vacant, the property has sold unconditionally with vacant possession, they're planning extensive renovations or the property is to be demolished, they're required to give tenants 90 days' notice.
Properties to be sold must be put on the market within 90 days of the tenant leaving.
Other situations where 90 days' notice applies
Watson also confirmed landlords are required to give tenants 90 days' notice in the following situations:
- The landlord is not the owner of the property and the landlord's interest in the property ends, e.g. the landlord leases the property and subleases to the tenant and the landlord's lease ends.
- The property was acquired to facilitate the use of nearby land for a business activity and the property needs to be vacated to facilitate that activity (this should be specified in the tenancy agreement).
- The landlord wants to change the use of the premises. The landlord must intend to use the premises for the new use for at least 90 days.
- The tenancy is a social housing tenancy and certain circumstances apply.
From August 11, 2021, the Act will allow landlords to give a 14-day notice to end a tenancy in cases of tenant assault of the landlord/property owner, a family member or their agent (Police charge required).
3. What happens if rent isn't paid?
The Tenancy Agreement shows the amount of rent to be paid.
Tenants and landlords are encouraged to discuss any change in circumstances and reach an agreement.
As outlined in the Residential Tenancies Amendment Act, if for periodic tenancies, rent is at least five working days' in arrears on three separate occasions within a 90-day period, landlords can apply to have the tenancy terminated within 28 days of the third notice.
A Q&A of the Residential Tenancies Amendment Act provided by the Ministry of Housing and Urban Development confirms in each case, landlords are required to provide written notice to tenants. Notices should advise the dates rent was due, the amount overdue, how many other notices have been given within the 90-day period and advise the tenant they can challenge the notice in the Tribunal.
MBIE said as an alternative to issuing three separate notices to tenants for late rent, landlords can choose to follow the existing breach procedure, which applies to both fixed term and periodic tenancies.
"Landlords can follow the standard breach procedure - serving one notice giving tenants 14 days, with the option to apply for termination if rent is 21 days or more in arrears," MBIE said.
4. What are tenants' obligations around antisocial behaviour?
Tenants have the right to the 'quiet enjoyment' of the house they rent. But they're also required to respect the peace, comfort and privacy of their neighbours and any other tenants.
If a landlord receives excessive complaints around the noise of their tenants, or other behaviours that cause alarm, distress, or nuisance that is more than minor, they're encouraged to talk to their tenants first.
"Should landlords and tenants be in dispute, Tenancy Services offers FastTrack Resolution and/or mediation, to help them talk about and solve their problems," Watson said.
"For anti-social behaviour that occurs during a periodic tenancy, records of three valid notices for three separate occasions of anti-social behaviour that occurred within a 90-day period must be provided by the landlord for a Tribunal application," Snelling said.
"The Tribunal then hears the case and decides if the tenancy should be terminated and the notice period to end the tenancy."
5. What happens at the end of a fixed term tenancy?
A fixed term tenancy is where a landlord and tenant agree that the tenant will rent the property for a set time period, e.g. one year.
From February 11, when a fixed term tenancy ends, it will generally roll over to periodic.
"All fixed-term tenancy agreements will convert to periodic tenancies unless a landlord gives notice using the reasons listed in the RTA for periodic tenancies [63 days or 90 days], a tenant gives notice for any reason at least 28 days before the end of the tenancy [or] the parties agree to extend, renew or end the fixed-term tenancy," Watson confirmed.
If a landlord or tenant has an unexpected change in circumstances they can apply to the Tenancy Tribunal. If the applicant will suffer severe hardship if the tenancy continues, the Tribunal confirmed it may end the fixed-term early.
6. Can tenants request minor changes and who pays?
Under changes to the Act, tenants can ask landlords to make minor changes to a rental property. Examples are shelving, TV aerials, small gardens and curtains.
Requests must be made by the tenant in writing, and landlords are required to reply within 21 days. Costs are covered by the tenant, including installation and reversal (if required).
Before talking to their landlord, depending on the change, tenants are urged to map out the details first.
"Consider where the change is happening, who will carry out the work, how you'll manage the change to prevent property damage and how you'll reinstate the property back to normal when the tenancy ends," Snelling suggested.
Landlords can put in reasonable conditions for how changes are made.
"Tenants cannot proceed without permission and must seek Tribunal action if this is unreasonably refused."
If fibre broadband can be installed at no cost to the landlord, tenants can also ask landlords to install it (tenants are required to cover any ongoing service costs).
Other changes to take effect from Thursday include prices on rental listings and the ability for tenants to ask landlords to assign a tenancy in legitimate circumstances. Additionally, tenants can apply for name suppression following a Tenancy Tribunal decision.
Landlords are reminded to ensure tenants have a copy of the Tenancy Agreement and to keep records of the tenancy for up to 12 months after the tenancy ends.