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Landlord newsletter

issue No. 14 - September 2010

In this edition of the e-newsletter we


An update on our dispute resolution services

Telephone mediations

Over 80% of successful mediations are now resolved by telephone. Feedback from clients is that this service is really helping to get disputes resolved quicker.

There are still some applications that will be best scheduled as face to face mediations or referred straight to the Tenancy Tribunal, however these are the minority.

We’re seeing more applications being resolved, with a higher attendance rate among tenants when mediations that are scheduled as a telephone mediation. A telephone mediation means that you don’t need to travel to us. Also because we schedule telephone mediations to our staff across the country the mediation can happen quickly.

How you can help us resolve your disputes as quickly as possible

There are three key steps to help you resolve your tenancy dispute as quickly as possible

  1. provide accurate and up-to-date contact details for your tenants
  2. provide us with your email address and cell phone number
  3. if you have made an application and have the tenant with you, call us on the relevant number below and we will try and mediate the dispute straight away
    • Christchurch 0800 872 424
    • Wellington 0800 879 486
    • Hamilton 0800 874 860
    • Manukau 0800 876 168
    • Auckland 0800 872 553

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Our online resources to help you

We have a number of online resources available

Property Managers Toolkit

This toolkit gives property managers and landlords tips for use at each stage of the tenancy and provides guidance for making an application to the Tenancy Tribunal.

Dispute Resolution Toolkit

This toolkit will help you prevent, and sort out, tenancy problems.

Department of Building and Housing website

This site has information on the housing sector and statistical information on market rent for your area.

Flatting 101 website

This site has information and resources to help people who are about to go flatting.

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Residential Tenancies Amendment Act 2010

New law takes effect 1 October

The Residential Tenancies Amendment Act 2010 will take effect on 1 October 2010. The changes will be material to how you do business.

The Amendment Act makes a number of changes to the legislation that has been in place since 1986. You can read a summary of the key changes in this newsletter and a history of the Amendment Act is available on the Department’s website.

The Department of Building and Housing will have a range of advice, information and education services available on our website to help you get to grips with the changes.

Some of the services we have available include:

We have trained staff at our contact centre who are able to help with your queries.

Phone 0800 TENANCY (0800 83 62 62) or email info@dbh.govt.nz.

Why change the Residential Tenancies Act 1986?

The Residential Tenancies Act 1986 (RTA) sets out the rights and obligations of tenants and landlords. The Act covers aspects such as payment of rent, bonds, property repairs and giving notice to end a tenancy.

New Zealand has changed significantly since 1986 when the RTA came into force – from the technology we use, to the cars we drive, to the way we live.

People are renting for longer, and the demographics of renters have changed over time. Since 1986, the proportion of New Zealanders renting their homes has gone up, fewer young people are flatting away from home and older people and families with children are renting. With home ownership becoming less affordable the number of long-term renters will continue to increase.

Since 1991 home ownership has decreased by 7% to 67%, and is predicted to decrease further to 62% by 2016.

New Zealand’s housing market is quite different today from what it was when the RTA first came into effect, and it is important that we ensure it continues to strike the right balance between the rights of landlords and tenants. New Zealand’s housing landscape is changing, and the law needs to keep up with the needs of all New Zealanders, whether they rent or own property. This led to the amendment of the RTA to ensure that it continues to work well both now and in the future.

What will the Amendment Act do?

The amendments aim to provide a good balance between the needs of tenants for a decent home, and the needs of landlords to effectively manage their rental properties.

The amendments:

  • clarify and appropriately balance the rights and obligations of tenants and landlords
  • enable landlords to manage their property portfolios more effectively
  • encourage the development of a rental market that will provide stable, quality rental housing.

This will be achieved through:

  • the extension of jurisdiction of the RTA and the Tenancy Tribunal
  • clarifying and simplifying certain parts of the RTA see our updated Renting and You publication.
  • providing certainty in particular situations see our overview of landlord and tenant obligations
  • encouraging compliance with the Act by introducing new unlawful acts Link to the NZ Legisation website.and increasing existing penalties.

Summary of key changes

Extending the jurisdiction of the RTA and the Tenancy Tribunal

RTA to cover boarding houses

A boarding house is a residential premise that contains one or more boarding rooms with facilities for communal use by the tenants, and is occupied or is intended by the landlord to be occupied by at least 6 tenants at any one time.

A boarding house tenancy is subject to the RTA if it lasts or is intended to last for 28 days or more and the tenant is granted exclusive right to occupy particular sleeping quarters and has shared use of the facilities.

You can access information relating to boarding house tenancies.

Extends Tribunal’s monetary jurisdiction to $50,000

The Tribunal’s monetary jurisdiction has increased from $12,000 to $50,000.

Tribunal can hear disputes between landlord and guarantor of tenant

The Tenancy Tribunal now has jurisdiction to determine disputes between a landlord and the guarantor of a tenant.

Previously, if the tenant defaulted, the landlord would have to take the tenant to the Tenancy Tribunal to get on Order against the tenant, and then take separate action (most likely through Disputes Tribunal) against the guarantor to hold them liable.

Right to be represented by counsel or other representative, if a claim is in excess of $6,000

A party has a right to be represented by counsel or other representative, if a claim is in excess of $6,000 (previously $3,000). There are other circumstances in which a party can be represented; access a list of them here.

Clarifies and simplifies certain parts of the Residential Tenancies Act 1986

Use of a PO Box, fax, or e-mail address as an alternative address for service

The landlord and tenant are required to record a physical address as an address for service on a tenancy agreement. Now, they can also provide an additional address for service which may be a PO Box number, fax number or email address. This must be included in your tenancy agreement.

This means you can now serve notices by fax and email if the other party has given one as an address for service.

Serving Tenancy Tribunal applications after the tenancy has ended

There are new provisions explaining how an application to the Tenancy Tribunal can be served within two months from the termination of a tenancy, and after two months from the termination of the tenancy.

The Tenancy Tribunal may continue to hear and determine an application even if a party has not been served in accordance with the Act. This will only happen if all reasonable steps have been taken to serve the party properly and the failure to serve them is not due to any fault or unreasonable delay by the applicant.

You can find more information about applying to the Tribunal after termination of the tenancy, or what to do if you have no current address for service.

Short fixed-term tenancies

The definition of “short fixed-term tenancy” has been reduced from 120 to 90 days. Parties may not enter into a short fixed-term tenancy for the purpose of using it as a trial period.

Clarifies and simplifies outgoings

The law is clarified so that outgoings that would be incurred irrespective of whether the property had tenants living in it are the responsibility of the landlord. The landlord is also responsible for outgoings incurred for common facilities.

The tenant has responsibility for any other outgoings, such as electricity, gas, phone and metered water if the charges are directly attributable to the tenant. You can find more information about water charges here.

Changes “10 working days” to “14 consecutive days”

What used to be known as the 10 working day notice to remedy a breach has become a 14 day notice. Where a notice like this is required to be given with a prescribed period for the other party to do something, the period of the notice commences on the first day after the notice is served and ends 14 days later. Additional time needs to be allowed for the service of the notice. For example, notice sent by post will be deemed to be received 4 working days after it is posted. You can find more information on service of documents.

Simplifies landlord’s responsibility for abandoned goods

While the landlord may dispose of foodstuffs and other perishable goods immediately in any way they see fit, there are new processes a landlord can choose from when dealing with any other goods left by a tenant who abandons the tenancy. You can find more information about abandonment of goods here .

Provides more certainty in particular situations

Landlords must appoint an agent if out of NZ longer than 21 days

If you are a landlord going out of New Zealand for more than 21 consecutive days you must appoint an agent. You must also advise the tenant of your agent’s details and the Department of Building and Housing if a bond is held.

Explains how tenancies end when a sole tenant dies

The law provides for the termination of tenancies where a sole tenant dies. The tenancy terminates on the earliest of the following dates:

  • 21 days after the personal representative of the tenant or the tenant’s next of kin gives the landlord written notice of the death of the tenant.
  • 21 days after the landlord gives the personal representative of the tenant or a person who is the tenant’s next of kin written notice to vacate the premises that are the subject of the tenancy agreement.
  • On a date agreed in writing by the landlord with the personal representative of the tenant or with a person who is the tenant’s next of kin.
  • On a date determined by the Tenancy Tribunal on an application (which can be made without notice) by the landlord.

Fixed-term tenancies become periodic at end of fixed-term

A fixed term tenancy automatically becomes a periodic tenancy on expiry of the fixed term unless a notice is given by either party not sooner than 90 days before the end of the term and not later than 21 days before the end of the term. The notice must state that you do not want to carry on with the tenancy. You can find more information about the types of tenancy.

Destruction of the premises

If the premises is destroyed or become uninhabitable due to a breach of the tenancy agreement by one party, the other party may give notice terminating the tenancy. Where a landlord is giving notice they must give at least 7 days. Where a tenant is giving notice the rent abates and they must give at least 2 days.

If the premises are destroyed or become uninhabitable other than due to a breach of the tenancy, the rent abates and either party may give notice terminating the tenancy (7 days for the landlord and 2 days for the tenant).

If the premises are only partially destroyed or part of the premises is so seriously damaged as to be uninhabitable, the rent shall abate accordingly and either party may apply to the Tribunal for an order terminating the tenancy. The Tribunal will make such an order if it is satisfied that it would be unreasonable to require the landlord to reinstate the property or (as the case may require) to require the tenant to continue with the tenancy albeit at a reduced rent.

Encourages compliance with the Residential Tenancies Act 1986

Increasing value of existing monetary penalties and adding more unlawful acts

The Tribunal may make higher awards of exemplary damages against parties who commit unlawful acts. Some new unlawful acts have been added and some amounts for exemplary damages have been increased. The list of all the unlawful acts and exemplary damage limits are in Schedule 1A of the Residential Tenancies Act. You can view them on the New Zealand Legislation website Link to New Zealand Legislation website. .

Awarding Costs in Tribunal Applications

The Tenancy Tribunal must order a respondent to pay the applicant the filing fee if the applicant is wholly successful with their claim. The Tribunal has discretion to order this payment where a claim has only been partly successful.

If a creditor has incurred expenses when seeking payment from a debtor under a Tenancy Tribunal order, the Tribunal may order the debtor to reimburse the creditor. This will only apply if there is a provision in a tenancy agreement that allows this.

Applying for Contact Information to Enforce a Tenancy Tribunal Order

Sometimes enforcing an Order from the Tenancy Tribunal becomes difficult because the other party has moved and you do not have their contact details. If you have tried unsuccessfully to find a new address for the other party you can apply for contact information held by a government agency to be released to the Court.

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New tools and advice about property investing and tax changes

The IRD have updated the information available on the IRD website in relation to tax and residential property. To see new forms and tools available go to the property tax section of the IRD website Link to IRD website.

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