Did you know that if you have not had your rental property assessed for its current level of compliance with the healthy homes standards and
it becomes vacant, you will not be able to re-tenant the property until you do? That will be the case from 1 December 2020.
Let’s look at a likely scenario with our hypothetical landlord, Bob. In November, a tenant gives Bob notice to vacate his property on 12 December 2020. Bob, who lives two hours away, does not know the property’s current level of compliance with the healthy homes standards. Bob needs to do the following:
• Establish the required heating capacity for the main living room using either
the Heating Assessment Tool at tenancy. govt.nz/heating-tool or the formula contained in schedule 2 of the RTA (HHS) Regulations 2019.
• Complete the six pages dedicated
to Insulation on the compliance
standard details. This is easy for Bob as he upgraded the insulation in July 2018. Otherwise he would have needed
a professional assessment.
• Bob needs to know what extraction fans are installed and ensure they are in good working order and ducted outside. If they were installed after 1 July 2019, he needs to know the diameter or exhaust capacity.
• He must inspect gutters and downpipes to ensure they efficiently drain storm, surface and ground water to an appropriate outfall.
• He needs to know if his property requires a ground moisture barrier, and if it has one installed or not. Bob has not been under the house for a long time.
• Bob also needs to understand how to meet the requirements in the draught stopping standard, and he thinks this standard should be met as soon as possible.
Bob decides that he does not have the appropriate skills to perform these checks himself, in particular, to determine the heating capacity using the assessment tool as measuring rooms is required. He decides to employ a professional, but there is a delay in getting an appropriately qualified tradesperson to inspect the property due to the demands on the industry. A date of 17 December is given and the report will be provided within three business days. On 21 December, when the report is received, the property can be rented and the tenancy agreement prepared with the required compliance statements. Unfortunately, it is now close to Christmas and tenants are not moving. The property remains vacant until mid-January. Bob loses five weeks rent. Don’t be like Bob.
Bob now has several applications and has selected his preferred tenant. When preparing the tenancy agreement and completing the healthy homes compliance statement, Bob commits to meeting all the standards by 1 July 2021. His prospective tenants are happy with that compliance date and they agree to rent his property. Bob now has his property rented by great tenants and a plan to meet his obligations under the healthy homes legislation. Be like Bob.
Make a plan
On the healthy homes standards current level of compliance statement, which is required for all new and renewed tenancies from 1 December 2020, landlords must not only complete the 13 page document that discloses their current level of compliance for each of the five healthy homes standards, they must also provide a date that they will meet all the standards by.
So, it is not enough for a landlord to declare the current level of compliance, they need a plan and that plan must include a date that they will comply by.
The best tenants may not sign a tenancy agreement with a compliance date of 1 July 2024. This is the final date to comply with the healthy homes standards and may be the default date used by some landlords if they don’t have a good plan in place. The best tenants want to live in a warm, dry, healthy home in the shortest possible time frame. Once your property is assessed, a plan is needed. Remember that from 1 July 2021, for any new or renewed tenancy agreement landlords have only 90 days to meet all the healthy homes standards.
Harcourts Property Managers are working hard to avoid situations and vacancy periods like those experienced by Bob, but we know that with the current wait times to get an assessment done, scenarios like Bob’s are going to be commonplace. Speak to your Harcourts property manager for advice, get your property assessed and make your plan!
The Residential Tenancies Amendment Act (RTA) 2020 removes the ability of landlords to end a periodic tenancy by giving 90 days’ notice without giving a reason to the tenant. This part of the legislation comes into effect on 11 February 2021.
When do landlords use 90-day notices?
Landlords and property managers issue 90-day notices for a number of reasons, including to remove problematic tenants who display anti-social behaviour or who are consistently late with their rent payments.
What can a landlord do if a tenant is displaying anti-social behavior?
The no-cause termination has been useful when tenants are behaving in such a way that they are a nuisance to neighbouring properties and when neighbours are reluctant to go on the record for fear of retaliation. No-cause terminations are issued as a last resort and the president of the New Zealand Property Investors Federation has been quoted as saying that only about 3 percent of their members’ tenants were given a 90-day notice in a typical year.*
The new amendments allow landlords to terminate tenants on a periodic tenancy who engage in repeated anti-social behaviour. Landlords must issue tenants with three notices for separate anti-social acts in any 90-day period which clearly describe the behaviour, who engaged in the behaviour (if known), the date and approximate time and location, and how many other notices have been given within the 90-day period. The landlord must also advise the tenants that they can challenge the notice in the Tribunal. If three notices are issued, the landlord must apply for termination of the tenancy within 28 days of the last notice being issued.
So, what is anti-social behaviour?
Anti-social behaviour is when a tenant has acted in a way that has caused harassment, alarm, distress, or nuisance that is more than minor and includes unintentional acts or acts by omission. If the tenant disputes the notices, the onus is on the landlord to prove that the anti-social behaviour occurred. If this is proven, and the Tribunal considers that the notices are fair and reasonable, it must make an order to terminate the tenancy.
Your Harcourts property manager keeps detailed diary notes of conversations and correspondence with tenants and any relevant parties. They will act in a timely manner when dealing with any complaints of anti-social behaviour so that the window of opportunity to terminate an anti-social tenant is not compromised. Our property managers’ first course of action is always to discuss and educate a tenant about the behaviour and what is expected of them. Harcourts property managers will continue to strive to maintain professional and respectful relationships with their tenants.
What if a tenant is consistently late with their rent payments?
The RTA Amendment Act 2020 has provided additional provisions for landlords to use
if a tenant is repeatedly late with their rent payments, but they do not reach more than 21 days in arrears (which is already provided for in the current Act).
If a tenant is, on three separate occasions in a 90-day period, at least five working days late with their rent payment, and the landlord has issued the required notices, the landlord can apply to have the tenancy terminated. However, the landlord must do so within 28 days of the last notice being issued.
The notices must include the dates for the rent arrears, the amount overdue and how many other notices have been issued within the 90-day period. The notices must advise the tenant that they can challenge the notice in the Tribunal. If the Tribunal is satisfied the requirements for termination are met, it must make an order to terminate the tenancy.
Harcourts’ policy on rent arrears
Harcourts has a zero tolerance to rent arrears and our property managers act the moment a tenant falls into arrears. Our trust accounting systems track our actions and correspondence with tenants so that we can monitor their payments and issue the appropriate notices as and when required.
The RTA currently provides for landlords to issue 14-day notices to remedy a breach that includes non-payment of rent. If a tenant fails to remedy the breach, the landlord can apply to the Tenancy Tribunal for termination. If a tenant owes 21 days of rent or more, the landlord can apply to the Tenancy Tribunal for termination of the tenancy. This legislation has not changed, rather this amendment to the RTA has given landlords additional provisions for dealing with rent arrears after issuing no-cause termination notices becomes an unlawful act.
What happens if a tenant breaches their agreement?
It is important to note that the Bill retains the provisions that enable a landlord to apply to the Tribunal when a tenant fails to remedy a breach of their tenancy agreement or the Residential Tenancies Act 1986. This includes, but is not limited to, a tenant failing to meet their obligations under the RTA to not interfere with the peace, comfort, or privacy of the landlord’s other tenants or the neighbours. A 14-day notice to remedy a breach should still be issued and if a tenant does not remedy the breach within the given time frame, the landlord can apply to the Tribunal to have the tenancy terminated. Other breaches may include smoking inside the house and keeping pets when they are not permitted to do so.
he Minister of Finance announced on 23 March 2020 a freeze of rent increases and an extension of no-clause terminations. This has applied as law through the COVID-19 Response (Urgent Management Measures) Amendment Act.
These measures will support New Zealanders to stay in their rental properties with a six-month freeze on residential rent increases and increased protection from having their tenancies terminated.
The key changes for landlords and tenants to be aware of are:
- There is now a freeze on rent increases.
- A rent increase notice from a landlord will not have the effect of increasing a tenant’s rent, unless the rent increase has already taken effect.
- Tenancies will not be terminated during the lock-down period, unless the parties agree, or in limited circumstances, regardless of when notice was provided.
- Tenants will still be able to terminate their tenancy as normal, if they wish.
- Tenants will have the ability to revoke termination notices that they have already given, in case they need to stay in the tenancy during the lock-down period.
The time frames for the new measures are:
- The measures take effect by Thursday 26th March 2020.
- The rent freeze applies for an initial period of six months.
- The protections against terminations will apply for an initial period of three months.
- At the end of both initial periods, the Government will evaluate whether they need to be extended.
Importantly, where a tenant has symptoms of COVID-19, or is confirmed as positive, this is not grounds for a landlord to terminate a tenancy. Nor is a tenant required to notify their landlord if they test positive for COVID-19. However, we encourage tenants to advise the landlord, if the landlord needs to attend the property while the tenant is self-isolating, for example, if the landlord needs to undertake urgent repairs at the property.
Source: Ministry of Business, Innovation & Employment
The word ‘reasonable’ is found throughout the Residential Tenancies Act 1986 but this can be difficult to navigate because one person’s interpretation of ‘reasonable’ is not the same as another’s. One area that has proven troublesome for landlords and tenants is to establish what is ‘reasonably clean and tidy’ when it comes to vacating a property.
As per section 40 of the Residential Tenancies Act 1986, “the tenant must ensure that the premises are left reasonably clean and tidy and remove all rubbish”.
A recent Tenancy Tribunal case clarified what ‘reasonably clean
and tidy’ means:
The Tribunal stated that “the words ‘reasonably clean and reasonably tidy condition’ do not impose an absolute standard. This standard will vary according to the age and condition of the premises. There is no requirement that each and every individual item in the premises be left ‘reasonably clean and tidy’, only an overall obligation in relation to the tenancy premises. Also, a tenant generally should not be expected to keep the premises any cleaner and tidier than they were at the commencement of the tenancy.”
Harcourts property managers conduct thorough vacating inspections, comparing the in going and outgoing reports to establish the condition of the property when the tenant took possession and when the tenant vacated, using photographic evidence where possible. If some items in a property are not clean when a tenant vacates, a property manager will request that these items are cleaned and if necessary, apply to the tribunal for cleaning costs. We are finding, however, that we may not be awarded the cleaning costs, as the tribunal has stated that there is no requirement for each and every item to be clean.
Landlords should be aware that some Adjudicators are stating that landlords should expect to professionally clean a property between tenancies. We consider this acknowledgement that
‘reasonably clean’ is not actually considered clean enough for the commencement of a tenancy and we tend to agree. To hand over a ‘very clean’ property at the commencement of a tenancy is the best possible start to a trouble-free tenancy. The opposite can also hold true for the beginning of a troublesome tenancy, something good landlords and property managers avoid. Fortunately, many tenants do leave the property in a very clean and tidy state and professional cleaning to take the property from ‘reasonably clean’ to very clean is not always required.
You can view the tribunal case here.