Amendments To The Residential Tenancies Act 1986

If you are a landlord or tenant there are some changes coming into effect on 1 October 2010 which will affect your obligations. Of particular note is that certain breaches of a tenancy agreement have now been specifically deemed to be "unlawful acts" and you could be up for a significant penalty if you're guilty of such a breach.

Most changes to the Residential Tenancies Act 1986 ("The Act") simply spell out landlords' rights and obligations in a more plain English and step-by-step approach. However, the list of acts by a landlord which are an "unlawful act" under the Act have now increased, and the awards made in a tenant's favour will be a lot higher for such a breach.

The main breaches which have been viewed as serious are:

1. failing to keep the premises in a clean and liveable condition, for which you could be liable for up to $3,000; and
2. entering the tenant's premises unlawfully, (which includes if the tenant does not give freely give consent at the time of entry), for which you could be liable for $1,000. If you use force or threat of force in order to enter you can be also be liable for imprisonment for 3 months or less, or a fine of $2,000.

The landlord may enter the premises for the purposes of providing services agreed to under the tenancy agreement, but only if the entry complies with any conditions specified in the tenancy agreement (which includes the conditions in the Act).

Landlords cannot now make improvements to the property and then require the tenant to pay higher rent unless the improvements were carried out with the tenant's consent. Alternatively the landlord can apply to the Tribunal to show that they could not foresee the expenses they would have to incur at the time of fixing the rent, and the Tribunal will allow the increase.

A landlord that is frequently overseas must now be careful to make sure that if they are out of New Zealand for more than 21 days at a time, they appoint an agent to manage the property in New Zealand. Failure to do this means you can be up for $1,000.

A new obligation of the tenant is to not "cause or permit" any interference with, or render inoperative, any means of escape from fire within the meaning of the Building Act 2004. This is an unlawful act and the tenant can have $3,000 ordered against them.  It is also an unlawful act for a tenant to:

• fail to comply with the tenant's obligations on termination of the tenancy (penalty $1,000);
• use the premises or permit the premises to be used for any unlawful purpose (penalty $1,000); or
• cause or permit any interference with the reasonable peace, comfort or privacy of any of the landlord's other tenants (penalty $2,000).

Tenancies in premises held in a stratum estate under the Unit Titles Act 2010

The Body Corporate Operational Rules made under that Act now form part of the tenancy agreement. It would be prudent for landlords to supply a tenant with a copy of those Rules on commencing the tenancy. Any current tenancies are not affected.

Boarding House Tenancies

One of the major changes to the Act is in the area of boarding houses, where a whole new Part has been inserted. A boarding house tenancy is a residential premises containing one or more boarding rooms along with facilities for communal use by the tenants. These must be occupied, or intended by the landlord to be occupied, by at least six tenants at any one time. Landlords cannot just rely on their former practices with regard to these tenancies, as they now have significant responsibilities, which if breached mean that the landlord can be up for penalties of up to $3,000.

Tenancy Tribunal

When tenancy relationships break down, the Tenancy Tribunal can attempt to come to a mediated solution or, if needed, make an order which is the equivalent of a District Court order and can be enforced in the same manner.

The exclusive jurisdiction of the Tribunal has now been increased from $12,000 to $50,000 and a party may have a representative or legal Counsel if the amount concerned is over $6,000. The changes in regard to the procedure of the Tribunal only apply if the dispute or matter arose on or after 1 October.

Need help?

If you are concerned about any of these changes please contact us and we can guide you through your obligations.

Updated: September 2011