The Government have passed the Residential Tenancies Amendment (RTA) Bill 2020. The amendments make a number of changes to the Act, which will affect both landlords and tenants.
“The Residential Tenancies Act 1986 was out-dated and the reforms in the RTA modernise our rental laws and align them with present-day realities for the around 600,000 households which rent in New Zealand,” Associate Minister of Housing, Kris Faafoi said.
Broadly, the bill makes a range of changes to the Act to make it fit for modern renting situations in New Zealand by increasing security of tenure for tenants; promoting good-faith relationships in the renting environment; modernising and clarifying the Act to reflect the modern renting market; enhancing tools for the chief executive responsible for the administration of the Act; and supporting tenants' ability to assert their legal rights.
The reforms focus on helping tenants who meet their obligations to be able to stay in their homes by removing “no cause” 90-day termination notices, and replacing them with a comprehensive list of specified, justified reasons that a landlord can use to end a tenancy.
Other changes include:
- Making rental properties safer and more liveable by enabling tenants to make minor changes to the property, such as installing child-proofing, hanging pictures, or earthquake-proofing.
- Improving compliance by introducing a range of tools for the Regulator (the Ministry of Business, Innovation and Employment) to respond to people who are not meeting their obligations.
- Banning landlords from seeking rental bids and limiting rent increases to once every 12 months.
The majority of the reforms will come into effect in 6 months (February 2021), however the 12 monthly limit on rent increases came into effect on 12 August 2020 to help tenants who are struggling financially as a result of Covid-19.
From 12 August 2020, rent increases are limited to once every 12 months. This is a change from once every 180 days (six months). There continues to be a freeze on rent increases, which means landlords cannot increase rent until after 25 September 2020. Any rent increase notices given to tenants from 12 August 2020 must comply with the new 12-month rule. If a notice was given before 12 August 2020, it is still within the 180-day rule. Please go here for additional information.
The Associate Minister of Housing said the reforms have got the balance right in reflecting the need to modernise residential tenancy law and correct problems in a way which was proportionate, placed reasonable requirements on both landlords and tenants, and would endure changing market characteristics.
For further information on the full Residential Tenancies Act 1986, please go here. Or for the Residential Tenancies Amendment Bill, please go here.
For independent advice from someone who understands this well, and will have your best interests at the centre of their negotiations, contact a member of Govett Quilliam's Property Law team today.