The next phase of the laws in the Residential Tenancies Act (the Act) takes effect from the 11 February 2021 (Phase 2). Phase 1 of the reform has been in place since August 2020 which included the change to rent increases being limited to once every 12 months.
Updates in Phase 2 include:
- Security of rental tenure – Landlords will not be able to end a periodic tenancy without cause by providing 90 days’ notice. New termination grounds will be 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 will be 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) 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.
The abolishment of the no-cause termination is an area that is seen as one of the most dramatic, where previously, landlords could remove tenants with 90 days’ notice without having to provide justification. Instead, they will have to show a pattern of anti-social behaviour over a three-month period, with evidence presented at the Tenancy Tribunal.
Clarification to what exactly a minor change is has been determined in section 42B of the Act. In short, a minor change is any fixture, renovation, alteration, or addition of or to the premises that presents no more than a low risk of material damage to the premises. There are other stipulations here that you need to be aware of that are explained in section 42B of the Act.
In addition, the healthy home’s standard is also in effect and from the 1st July 2021, all homes must comply with the healthy home’s standard.
Key dates for landlords
From 12 August 2020: Rent increases limited to once every 12 months. Previously it was once every 180 days (six months).
From 11 February 2021: Several new law changes to the Residential Tenancies Act will take effect.
From 1 July 2021: All private rentals must comply with healthy homes standards within 90 days of any new or renewed tenancy.
From 1 July 2021: All boarding houses must comply with healthy homes standards.
From 1 July 2023: All houses rented by Kainga Ora (formerly Housing New Zealand) and registered Community Housing Providers must comply with healthy homes standards.
From 1 July 2024: All other private rentals must comply with healthy homes standards. This means fixed-term tenancies that have not renewed since 30 November 2020.
The last phase, Phase 3 will come into effect by the 11th August 2021 and means Tenancies can be terminated if family violence or landlord assault has occurred.
More information available here: https://www.tenancy.govt.nz/law-changes/