Landlord e-newsletter
No.12: March 2010
In this issue we cover:
Death of a tenant
What happens to the tenancy agreement after a tenant dies can be complex and will depend on any one of three things:
- Whether the deceased tenant has a personal representative - someone defined as the executor or administrator of the deceased person. A personal representative fits within the definition of a tenant under Section 2 of the Residential Tenancies Act 1986; or
- whether there are multiple tenants named on the tenancy agreement; or
- Whether there may be people who could be considered tenants. An example is a spouse of the tenant who was involved in setting up the tenancy or who typically deals with the landlord in matters to do with the tenancy, as though they were a tenant, but who is not named on the agreement.
In any situation, landlords, surviving occupants and administrators of estates should try to agree on practical solutions following the death of a tenant. Any of the parties can apply to the Tenancy Tribunal for a declaration if matters can't be resolved between themselves.
To find out more about what you can do in different situations click on the following links:
Sole tenant situation
Where a sole tenant dies and there is a personal representative managing the tenant’s estate, the terms of the tenancy agreement continue to apply to the personal representative. The landlord inherits that personal representative as 'tenant' but only in their capacity as personal representative administering the deceased's estate. The landlord could contract with the personal representative as an individual, or anyone else living at the address with the consent of the personal representative if they wished to do so.
Any rent owing prior to or accruing after death may be charged to the deceased's estate. However, the personal representative is not liable for payments in their capacity as an individual. The estate of the deceased which they administer is liable.
If a sole tenant dies during the tenancy and there is no estate, the Tenancy Tribunal generally rules this ends the tenancy, particularly where there is no personal representative. If there is no personal representative, there is no tenant as per Section 2 of the Residential Tenancies Act 1986.
Where the sole tenant has no personal representative and was in a fixed term tenancy, that tenancy may be terminated upon the death of the tenant. A landlord could ask the Tenancy Tribunal to make an order terminating the tenancy and ordering the payment of the bond.
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Joint tenant situation
If a tenant dies during the tenancy and they have no personal representative, but there are joint tenants, the tenancy usually continues in the name of the surviving tenants.
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Occupants or implied tenants
Where it is uncertain if other occupants may be considered tenants the landlord can file an application to the Tenancy Tribunal asking for a determination who the tenants are, and for termination of the tenancy and possession of the property if they wish.
Surviving occupants who are not named as tenants on the tenancy agreement could also apply to the Tenancy Tribunal for orders declaring that they are, or should be regarded as, the deceased's personal representative.
If surviving occupants cannot claim to be the deceased's personal representative, then they have no rights under a deceased sole tenant's tenancy agreement to remain on the premises. The landlord can ask the occupants to leave or could apply to the Tribunal to evict them. Alternatively the landlord could enter into a tenancy agreement with the occupants, subject to consent of the deceased's personal representative.
Landlords are strongly encouraged to call our service centre to discuss their circumstances and how best to proceed if their tenant dies, on 0800 TENANCY 0800 83 62 62.
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New tools for property managers are useful for private landlords too
The Department’s website has a new space especially for property managers, but private landlords may find the information helpful too.
Each tool is an electronic fact sheet dealing with common problems experienced by Property Managers.
Each tool works like a checklist and gives practical advice on how to get things right first time. The first three tools are:
- selecting the right bond form
- making an application to the Tenancy Tribunal
- best practice tips for property managers at each stage of the tenancy
Find out more about property management »
The Department‘s website also has a new Dispute Resolution Toolkit for landlords and tenants. The toolkit is designed in two parts, firstly it includes practice advice and information for landlords and tenants on how to prevent problems and secondly guidelines on how to sort out problems if they arise.
Find out more about the Dispute Resolution Toollkit »
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Introductory seminars to help new landlords get it right first time
The Department of Building and Housing is running introductory education seminars to help new landlords run their rental properties effectively. The seminars are designed for landlords who have little or no experience in the New Zealand rental market.
There is no charge for the seminar, but places are limited and you must register to attend. Call 0800 TENANCY (0800 83 62 62) or email seminars@dbh.govt.nz to register. Find out more about seminars »
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Serving notices and emailing notices
Section 136 of the Residential tenancies Act 1986 sets out requirements for serving different types of notice, such as notice to terminate tenancies, increase rent, or remedy a breach.
If the notice or document is handed to the tenant or landlord, it is considered to be served immediately.
If it is left in their letter box or attached to the door of the property in a prominent position, it is considered to have been served two working days after the date on which it was delivered, in absence of evidence to the contrary.
If it is properly addressed and posted it is considered to have been served on the fourth working day after the date on which it was posted, in absence of evidence to the contrary. If it was faxed after 5pm it is considered to have been served on the next working day after it was transmitted, in absence of evidence to the contrary.
Although not mentioned in the Act, notices may be served by email if the email address was supplied as a part of the landlord's or tenant’s address for service, or the landlord and tenant habitually use email to communicate. If email is used to serve a notice and a dispute arises, it would be for the sender to prove that the notice was sent and that the other party received it. The notice would not be considered served until it was received by the other party.
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NZPIF Landlord of the Year 2010
The Department of Building and Housing will again sponsor the New Zealand Property Investor Federation Landlord of the Year Award in 2010. The award is presented at the NZPIF annual conference in October. For further information about the NZPIF award and local property investor associations contact the NZPIF 
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Ending a fixed-term tenancy
Fixed-term tenancies may only be ended early by the agreement of all the parties to the tenancy, by assigning the tenancy, or through an order of the Tenancy Tribunal. Some landlords take the view that it is better to negotiate a suitable way of releasing a tenant from a fixed tenancy rather than require them to continue and most likely be unhappy.
When you enter a fixed term tenancy it’s important your tenant understands that if they break a fixed term contract they can be liable for rental costs incurred through to the end of the fixed term. You can also ask the tenant to pay for the reasonable costs you incur if they break the tenancy agreement, for example, costs for re-letting the premises, compensation for lost rent, the cost of advertising for new tenants and letting agents’ fees.
You do not have a legal obligation to reduce or minimise rent arrears where a tenant wants to end a fixed term tenancy. By negotiating an end to a fixed term tenancy you may be able to keep what is owed to you manageable for both you and the tenant.
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Showing a property to prospective tenants or purchasers
Section 48 of the Residential Tenancies Act 1986 provides for the landlord to enter the property to show it to prospective tenants or purchasers. If the landlord wants to show prospective tenants or purchasers the property, they must get consent from the current tenant. The landlord should speak with the tenant and come to an agreement about arrangements that suit them both.
The landlord needs to be mindful of the tenant’s right to reasonable peace, privacy and comfort. The tenant cannot unreasonably withhold consent, but can place reasonable conditions upon the entry. If a landlord has difficulty agreeing to viewing times with the tenant, they can apply to the Tenancy Tribunal for an order setting dates and times for the right of entry.
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Once a rental property is sold
Once a property is sold, the old landlord must tell the tenants who the new owner is and when they take over. If a periodic tenancy is in place, then this will continue until on the same terms and conditions until such time as formal notice to terminate the tenancy has been given. If the new owner chooses to continue with a periodic tenancy, then the same terms and conditions of the original tenancy apply. The new owner must let the tenant know their name and contact details, and where the rent is to be paid.
If a property is sold when there is a fixed-term tenancy in place, the tenants are entitled to stay on until the end of that term under the same conditions. If, however, they wish to move, this is something that should be discussed with the new owners. Any agreement should be put in writing.
If a bond is held by the Department of Building and Housing, the rights in the bond are transferred to the new owner and the Department must be advised of the change. Landlords and/or agents should fill in a change of landlord/agent form when they take over a rental property where a bond has been lodged and the tenancy is going to continue. This should include both new and previous landlord names and signatures, and the bond number.
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