Jay

Critical Summary of Changes to the RTA 2020

Residential Tenancies Amendment Bill

The Residential Tenancies Amendment Bill was listed on the agenda in Parliament on 4th August 2020. This becomes the date it was passed even though the actual date the Bill was passed was the 5th of August. The changes come into effect in six months, except for restricting rent increases to once a year and the ability for a tenant to give 48 hours’ notice they are leaving a tenancy as a result of domestic violence, which is effective immediately.

Fixed Term and Periodic Tenancy Agreements

• Landlords will not be able to end a periodic tenancy without a specific reason (see reasons below).
• Fixed-term tenancies will become periodic tenancies at the end of the fixed term unless both parties agree that the tenancy will end. Fixed-term tenancies now expire as opposed to ending, effectively just minimum term tenancies.
• If the landlord doesn’t want the tenancy to continue at the end of the fixed term, but the tenant does, then the landlord must use one of the periodic tenancy grounds for ending a tenancy and give 63 days or 90- days notice depending on the reason for termination.
• If the tenant doesn’t want the tenancy to continue at the end of the fixed term, but the landlord does, the tenant must give notice between 28 days and 90 days before the end of the fixed term period.

Termination Grounds for Periodic Tenancies to end:

These grounds are in addition to the existing provisions that allow termination following a tenant breaking their tenancy condition, such as being 21 days behind in the rent.

• the landlord or a family member is moving into the property (63 Days notice) and the family member must move in within 90 days and then stay for at least 90 days.
• the landlord requires the premises to be used for an employee (this must be stated in the tenancy agreement).
• the landlord has an unconditional sale and purchase agreement for the property (63 Days notice).
• extensive alterations, refurbishment, repairs, or redevelopment of the premises are to be carried out by the landlord or owner (90 Days notice).
• the premises are to be demolished (90 Days notice).

Removing a tenant for anti-social behaviour:

• If the tenant, engages in anti-social behaviour that is more than mild on 3 separate occasions within a 90-day period; and
• on each occasion the landlord gives the tenant written notice describing clearly which specific behaviour was considered to be anti-social and who engaged in it; and
• advises the tenant of the date, approximate time, and location of the behaviour; and
• states how many other notices (if any) the landlord has given the tenant under this paragraph in connection with the same tenancy and the same 90-day period; and
• advises the tenant of the tenant’s right to make an application to the Tribunal challenging the notice and
• the landlord’s application to the Tribunal must be made within 28 days after the landlord gave the third notice.

If the tenant disagrees with the notice to end the tenancy for antisocial behaviour, they can appeal the notice to the Tenancy Tribunal. It is up to the landlord to prove that the tenant engaged in the antisocial behaviour and that it was more than mild antisocial behaviour. This means that other tenants or neighbours will probably have to become involved and provide evidence

Tenant commits assault

If a tenant physically assaults the landlord, the owner, a member of the landlord's family, or the landlord's agent, the landlord may terminate a fixed-term or periodic tenancy by giving at least 14 days’ notice to the tenant.

To do this, landlords must lay a complaint with the Police who must have sufficient evidence to charge the tenant with the assault.

Other changes

• Tenants will be able to add minor fittings to their premises where the installation and removal of the fittings are low risk.
• The Regulator (Ministry of Business, Innovation and Employment) will have new compliance tools to take direct action against parties who are not meeting their obligations.
• Increased powers of the Ministry of Business, Innovation and Employment against landlords include:

• • Criminal Acts
  • Infringement Offences
  • Infringement Fees
  • Pecuniary Penalties
  • Improvement Notices
  • Enforcement Undertakings
• The penalty amounts will be increased to a maximum of $50,000.
• As a general rule of thumb, fines increase 70%-80% on what they are now with some additional new fines (see attached spreadsheet).
• Advertising a property without a rental price will be prohibited.
• The minimum period between rent increases will now be twelve months.
• A party who is successful in the Tenancy Tribunal can have their identifying details removed from the Tribunal’s decision.

New supplementary Order regarding family violence:

• A tenant under a fixed-term or periodic tenancy may withdraw from the tenancy by giving at least 2 days’ notice to the landlord if accompanied by qualifying evidence that the tenant has been a victim of family violence.
• The victim does not have to pay any rent after the two days’ notice period.
• Rent reduction is a percentage of the number of people who have been offended against divided by the total number of people living in the house. So, if there are 4 residents and one is leaving as a result of violence, there would be a 25% reduction in rent. If the occupant is a solo occupant, then the tenancy ends.

Please note that this is only an extract of the Bill and these should be read alongside the legislation to get the full understanding of landlords' requirements.

http://legislation.govt.nz/bill/government/2020/0218/latest/LMS294929.html

With all these changes and increased implications to getting it wrong, it is more important than ever that you look at your investment as a business that requires professional management to ensure legal compliance, quality maintenance and the maximum possible returns from the asset.

To learn more or to sign with Quinovic Mt Eden call Jay on 021 836087 or Barry on 027 561 4448

by Jay