New Tenancy Laws NZ: A Complete Overview

New Tenancy Laws NZ

As a property investor and landlord, keeping up with the new tenancy laws NZ is essential. Under Phase 2 of the Residential Tenancies Amendment Act 2020, both landlords and their tenants are impacted by numerous new regulations that have recently gone into effect (beginning February the 11th).

These changes impact everything from how you handle evictions to allowing tenants to make physical changes to your property and more. Successfully managing an investment rental home has consistently been challenging for many landlords, and these new regulations have the potential to add to those challenges. What should you know about the new tenancy laws NZ?

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Lease Terminations

Tenants are now required to provide landlords with a 28-day notice if they wish to terminate their tenancy. This is an increase from 21 days. In addition, landlords must now have a sufficient cause to end periodic tenancy, and they must comply with the new regulation’s timeframe for supplying the termination notice to tenants. What are these timeframes?

Previously, a periodic tenant could be evicted if the landlord or the landlord’s family needs to live in the home as their primary place of residence. However, the length of the notice period has been extended to 63 days under the new regulations. If the tenant will be evicted because of plans to sell, demolish or renovate the rental property, the tenant must be given a 90-day notice.

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Tenant Requests to Alter the Property

Previously, landlords were not required to accept tenants’ requests for minor changes to the property. Now, however, landlords cannot deny these requests. More than that, they must respond to tenant requests within 21 days or face a fine of up to $1,500.

What constitutes a minor change that landlords no longer have the right to deny? All seven of these requirements must apply to a tenant’s request:

• The request has a low risk of damaging the property.
• Requested changes must be easy to reverse.
• The request must not require the consent of regulatory authorities.
• The request as well as the installation and removal processes cannot create health or safety risks.
• Third parties cannot be impacted negatively.
• The request cannot impact the building’s weatherization or its structural integrity.
• Covenants, bylaws and other rules cannot be violated.

Keep in mind that any disputes related to these requirements must be negotiated between the tenant and the landlord, or the decision will fall to the Tenancy Tribunal.

Some of the many minor changes that landlords must now allow include the installation of:

• Child safety latches
• Dishwashers
• Security alarms
• Doorbells
• Shelving
• Baby gates
• Television aerials
• Curtains and other window coverings
• Some types of gardens
• Internal locks that are aligned with fire safety laws
• Hooks for picture frames and artwork

All minor changes made to the property must be reversed when the tenant vacates the property. The cost of doing so falls on the tenant. The exception is if the landlord agrees for the changes to remain in place.

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Bidding by Prospective Tenants

Previously, landlords were not required to list a rental price when advertising their property. In addition, landlords could actively encourage multiple prospective tenants to attempt to outbid each other. In the bidding process, the competing parties would drive the rental price upward. These practices are no longer permitted. Landlords must advertise a property’s rental rate. Furthermore, potential tenants may not be solicited or enticed to bid against other potential tenants. If a prospective tenant offers more than the list price without any encouragement, the landlord can accept the higher price.

Fibre Broadband Installation

Previously, landlords had the right to deny a request for the installation of fibre broadband. Under the new regulations, the landlord must allow the installation to proceed. However, all related costs will be the responsibility of the tenant.

Fixed-Term Tenancy Conversion

At the conclusion of a fixed-term tenancy, the tenancy will now convert automatically into a periodic tenancy under the latest regulations. However, this will not apply if both parties can come to an alternate agreement. Other reasons when this regulation will not be applicable include when the tenant provides the landlord with a 28-day notice of intent to move out or when the landlord follows the new regulations regarding periodic tenancy terminations.

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Tenancy and Landlord Privacy

Previously, parties that brought a matter in front of the Tenancy Tribunal were allowed to request the suppression of their name and other personal details in the formal records. The Tenancy Tribunal was not required to accept the request, however. Under the new regulations, this information will automatically be suppressed upon request and without additional approval.

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Tenancy Assignments

Landlords no longer have the ability to decline a prospective tenant’s request for assignment without an acceptable reason. This dramatically reduces a landlord’s ability to be discerning when accepting new tenant assignments.

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Future Changes to Be Aware of

The new tenancy laws NZ are understandably complicated, and there are a few gray areas that leave plenty of room for negotiations between the landlords and tenants. Additional regulations will go into effect in August 2021. One of these allows a tenant to withdraw from an assignment with a two-day notice if he or she is the victim of family violence. Another new regulation is the landlord’s ability to give a 14-day termination notice if the tenant assaults the landlord.

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Another Solution for Managing Your Rental Property

Of course, there is another way to generate revenue from your rental home in New Zealand. At Bachcare, we provide a full holiday home management service  for more than  2,300 property owners across New Zealand. The new tenancy laws are not applicable to holiday homes, so all of Bachcare’s clients enjoy short-term management services for their homes without having to contend with the latest rental reforms. Now is a wonderful time to explore the possibility of converting your rental property into a holiday home.

Speak to one of our new owner advisors today to get an idea of how much your rental property could earn.

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