The Government has announced a suite of proposed changes to the Residential Tenancies Act 1986 (RTA). They will be drafted into a Bill to amend the RTA which will be introduced to Parliament in the first half of 2020. The proposed changes are not law yet and are still subject to change.
The key changes for landlords and tenants |
• Landlords will not be able to end a periodic tenancy without a reason, whereas previously landlords were able to issue 90 days notice without disclosing why. The legislation sets out specific reasons that a landlord may use to end a periodic tenancy:
- If the landlord has issued a tenant three notices for separate antisocial acts in any 90-day period and applies to the Tenancy Tribunal to end the tenancy.
- If the landlord has given notice that a tenant has been at least five working days late with their rent payment on three separate occasions within a 90-day period and applies to the Tenancy Tribunal to end the tenancy.
- The landlord intends to make the property available for sale within 90 days of the tenant leaving the property.
- If the property was acquired for a business use other than residential rental accommodation and termination is required for the purposes of the business.
- The landlord intends to carry out extensive alterations or redevelopment at the property and it would be unpractical for the tenant to reside at the property during the process.
- The landlord wants to change the use of the premises.
- The premises are to be demolished.
- The landlord is not the owner of the property and the landlord’s interest ends.
• Fixed-term tenancies will become periodic tenancies at the end of the fixed term. This applies unless the landlord and tenant agree otherwise, the tenant gives 28 days notice which has increased from 21 days notice, or the landlord gives notice using one of the specified reasons listed in the RTA for periodic tenancies (above).
• Notice periods extend from 42 days to 63 days when a landlord or a member of their family requires the property to live in, and they must reside in the property for at least 90 days.
• Notice periods extend from 42 days to 90 days when a property is sold with a requirement by the owner for vacant possession.
• The minimum period between rent increases will be raised from six months to twelve months.
• Tenants must request permission to install a minor fitting and landlords can only decline for specified reasons. Tenants must pay for the installation cost. Landlords can place reasonable conditions around how the minor fitting is installed and tenants must remove the fittings and remediate the property when the tenancy ends if the landlord does not agree to the fittings staying. Minor fittings could be securing furniture or appliances, installing child safe latches or baby gates.
• The Regulator, the Ministry of Business, Innovation and Employment (MBIE), will have new compliance tools to take direct action against parties who are not meeting their obligations:
- Penalty amounts will be increased in line with rental increases since 2006, when the penalty amounts were set.
- Issue infringement notices for straightforward breaches of the RTA.
- Issue improvement notices to correct behaviours where parties have breached the RTA.
• Soliciting rental bids, for example, by advertising a property without a rental price, will be prohibited.
• A party who is successful in the Tenancy Tribunal can have their identifying details removed from the Tribunal’s decision.
• Assignment of lease requests can only be declined if this is reasonable in the circumstances. Landlords must provide a breakdown of any costs, conditions and processes they are applying upon giving a tenant consent.
Harcourts has vast experience and expertise in residential property management and our property managers ensure that they are up to date with changes to the Residential Tenancies Act 1986. We remain committed to protecting our client’s interests and helping them meet their responsibilities under the RTA. Any breaches of the Act by tenants are well documented when they occur, offering protection for landlords.