Discussion document released for residential tenancy law reforms

Tuesday 4 September 2018

Authors: Andrew Petersen, Karl Anderson and Jane Holland

The Ministry of Business, Innovation and Employment (MBIE) has released a discussion document for public consultation on proposed reforms to New Zealand’s residential tenancy laws. ​

The objectives of the reforms are to strike a balance between the rights and responsibilities of landlords and tenants, and to improve the stability of tenants while ensuring landlords retain adequate protection. The need to modernise the legislation was also recognised to ensure it can adequately respond to changing trends in the modern rental market.

The more significant proposals covered in the reforms include:

  • ​Removing the ability for landlords to end periodic tenancies without a reason. Landlords can still end periodic tenancies for a number of other reasons, including if the tenant is not meeting their obligations, or the landlord or a family member of the landlord requires the premises to live in;

  • Extending the notice period from 42 to 90 days, if the landlord is ending a periodic tenancy where the Tenancy Tribunal has not ruled on a determination;

  • Reviewing whether the types of tenancy agreements currently used are still appropriate and reflect the modern renting environment;

  • Allowing landlords to increase the rent only once every 12 months (the current law allows landlords to increase the rent once every six months);

  • Providing options to make it easier for landlords and tenants to come to an agreement when a tenant wants to make reasonable modifications or minor changes to the premises. The options being considered include allowing a landlord to consider a tenant’s request for 21 days, after which they are deemed to have agreed to the request unless they decline for a specified reason;

  • Giving tenants the ability to keep pets at the premises, with the possibility of a “pet bond” to be paid or the tenant being required to professionally clean the carpet at the end of the tenancy;

  • Widening the enforcement measures and tools available to MBIE for it to investigate and enforce breaches of tenancy laws;

  • Changing provisions that relate specifically to boarding houses. These are residential premises occupied, or intended to be occupied, by at least six tenants at any time, where each tenant rents a room and shares communal facilities such as the kitchen and bathroom. The changes reflect a need to ensure there are improved quality standards for boarding houses and increased accountability for the operators who run them.

Other legislation in the works​

These proposals are in addition to other legislation already in the process of making changes to the residential rental sector:​

  • ​The Healthy Homes Guarantee Act 2017 will require rental properties to meet minimum standards as to insulation, heating and other matters from 1 July 2019;

  • The Residential Tenancies Amendment Bill (No 2) and Residential Tenancies (Prohibiting Letting Fees) Amendment Bill are both currently before Parliament. If passed, they will stop the charging of letting fees to tenants and clarify matters related to liability for damage to rental premises caused by a tenant. 

With this series of upcoming reforms that are intended to introduce tighter compliance and enforcement measures, it is important for landlords, property managers and tenants to stay informed about their rights and responsibilities in this space.

Interested parties can make their submissions on the proposals in the MBIE discussion document by 21 October 2018.​

For more information on tenancy law or other legislation, get in touch with Bell Gully’s Property and Real Estate team or your usual Bell Gully adviser.​


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Andrew Petersen

    Partner Auckland
  • Karl Anderson

    Partner Auckland
  • Jane Holland

    Partner Auckland
Related areas of expertise
  • Property and real estate
  • Residential property