What changes to rental properties are coming in 2021

Posted by Pam Hight on Dec 17, 2020

2021 rental laws New Zealand

2021 is a big year for both landlords and tenants with several changes to the Residential Tenancies Amendment Act being implemented. The reason for these changes is partly due to the increase in the number of people renting in New Zealand, the proportion of households that are rented has increased from 23% in 1991 to 32% in 2020.

More people, including families and older people, are renting for longer, or for life. According to the Ministry of Housing and Urban Development, these implementations aim to promote good-faith relationships in the renting environment and to ensure there are appropriate protections in place for both tenants and landlords. 

To help reduce the chances of getting caught up in non-compliant situations, we have compiled a summary of these changes which you can also find on the Tenancy Services website. 

It is important to familiarise yourself with these changes, especially if you self-manage your property. If your rental investment is managed by a property manager, then your property manager will have a good knowledge of the changes.


Law changes to take effect from the 11th of February 2021

Security of rental tenure

Landlords will not be able to end a periodic tenancy without cause just by providing 90 days’ notice. New termination grounds will be available to landlords under a periodic tenancy and the required notice periods have changed.

In order to end a periodic tenancy, a landlord will need to apply to the Tenancy Tribunal to end the periodic tenancy. In addition to the existing grounds for applying to the Tenancy Tribunal to end a tenancy (relating to rent arrears, damage, assault and breaches), a landlord may also now apply on one of the following grounds:

  • The landlord has issued the tenant three notices for separate anti-social acts in a 90-day period.
  • The landlord has given notice that a tenant was at least five working days late with their rent payment on three separate occasions within a 90-day period.
  • The landlord will suffer greater hardship than the tenant if the tenancy continues

If an order to end the tenancy is granted, the notice period will be determined by the Tenancy Tribunal.

Changes for fixed-term tenancies

All fixed-term tenancy agreements will convert to periodic tenancies at the end of the fixed-term unless:

  •  the tenant gives notice at least 28 days before the end of the fixed term. 
  • the owner gives 63 days notice if they or a member of their family require the property as their principal place of residence
  • the owner gives 63 days notice that the property is required for occupation by employees or contractors of the landlord.
  • the owner gives 90days notice that the property is sold
  • the owner gives 90 days notice that extensive alterations are to be carried out
  • the owner gives 90 days notice that the property is to be converted into commercial premises or is to be demolished
  • the landlord gives a 14-day notice to terminate if the Police have charged a tenant for assaulting the landlord, the owner, or a member of their family or assaulted the landlord’s agent, usually a property manager.

 

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. These include changes such as; brackets to secure furniture and appliances against earthquake risk, to baby proof the property, to install visual fire alarms and doorbells, and hang pictures.

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. Assignment is where a tenant finds someone to replace them in the tenancy. The remaining tenants may want the leaving tenant to find someone to take their place. This is called 'assignment'. The new tenant takes over all the old tenant's responsibilities. Assignment can happen if there's only one tenant on the tenancy agreement, or if there are several, however landlords can do their normal due diligence on the new tenant and accept them or decline them as long as they are reasonable.

Landlord records

Not providing a tenancy agreement in writing will be an unlawful act and punishable by a fine of $1000 if you own fewer than six properties and $2000 if you own more than six. Landlords will also need to retain and provide new types of information such as records relating to the Healthy Homes Standard, and records of building work that requires a consent, prescribed electrical, gas fitting and plumbing work. A full list of the documents required is listed in the RTA (Residential Tenancies Act).

Enforcement measures being strengthened

The Regulator (the Ministry of Business, Innovation and Employment) will have 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.

Rental price listings

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).

Family violence

Tenants who experience family violence will be able to withdraw from a fixed-term or periodic tenancy without financial penalty by giving two days’ notice and evidence of the family violence. If they are the only tenant, the tenancy will end.

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.

 

Healthy Homes Standards

In addition to the above changes to the Residential Tenancy Amendments Act. There is also a deadline for the Healthy Homes Standards Act. 

By the 1st of July 2021, all landlords must ensure that their rental property complies with the Healthy Home Standards within 90 days of a new tenancy. Simply speaking, if your current tenant gives notice after this date, you have 90 days to be compliant from the date you sign up a new tenant. For more information on the Healthy Homes Standards, we recommend you click here

If you are concerned about any of the Residential Tenancy Amendments Acts, our team of property managers are here to help. Feel free to contact us with any questions you may have. Request a call back by clicking on the link below.

Contact our landlord support services team

Topics: Legislation & Compliance

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