How does the RTAA affect rental customers?

Over the past year alone, a multitude of new laws affecting the rental industry have been rolled out. The Healthy Homes Standards are in full swing with compliance statements now required on all new, renewed and extended tenancy agreements. And, more recently, the Residential Tenancies Amendment Act (RTAA) was passed on 5 August 2020. In this blog, we look at six of the key changes from the Residential Tenancies Amendment Act 2020 and how they affect rental customers.

Why was the Residential Tenancies Amendment Act 2020 passed?

The purpose of the new legislation is to modernise the Act which was first passed in 1986, making it fit for current-day renting situations in New Zealand. The legislative changes aim to:

• Increase the security of tenure for rental customers
• Encourage good-faith relationships between rental customers and property owners
• Clarify areas of confusion in the Act
• Enhance powers and tools to ensure compliance with the Act
• Provide support for rental customers so they are able to assert their legal rights

Six key changes from the RTAA

1. Fixed-term tenancies now convert to periodic tenancies at the end of their term

All fixed-term tenancy agreements entered into from 11 February 2021, will automatically become periodic tenancies at the end of their term. The few exceptions to this change include:

• If a rental customer gives notice at least 28 days before the end of the fixed term.
• If the property owner gives notice in accordance with the few specified reasons in the RTA.
• If both parties agree to extend, renew or end the fixed-term tenancy.

If you’re living in a rental property and have a fixed-term tenancy agreement that ends after 11 February 2021, the old Act will still apply and the agreement can be terminated in accordance with the current act.

2. Renters can request permission to make minor changes to the rental property

This change applies to all active tenancies from 11 February 2021, whether they are signed before, on or after the 11th. From this date, rental customers will be able to request permission to make changes to the property and owners may not decline if the proposed alteration is minor. These changes could look like:

• Securing furniture to protect against earthquake risk
• Installing a baby gate or baby-proofing furniture
• Changing or installing curtains

This change empowers rental customers to make the property better fit their needs. However, it’s important to note that rental customers will be responsible for any costs associated with the installation and reversal of a minor change that they have requested at the end of their tenancy. Tenants requests must be in writing to the landlord and the landlord must respond within 21 days of the request.

3. Tenancy agreements can only be ended for specific reasons

Rental property owners will only be able to terminate periodic tenancies for specific reasons, as outlined in the Residential Tenancies Amendment Act. These reasons include:

• If the owner or a member of their family requires the property as their primary place of residence
• If the property is needed for occupation by employees or contractors of the owner
• If the property is going to be sold
• If extensive alterations are going to be carried out
• If the residential property is going to be demolished or converted into commercial premises

For more serious situations, tenancy agreements can also be terminated at the order of the Tenancy Tribunal. In this case, there are specific processes to follow before a tenancy agreement is ended.

For rental customers, this means more security and peace of mind, knowing that your tenure cannot come to an abrupt end without cause.

Hot tip: When applying for a property, ask the property owner if they have imminent plans to sell or carry out alterations. This way, you can be prepared if the tenancy ending is a likely scenario.

4. Rental customers can request to install fibre broadband

From 11 February 2021, rental customers can request to install fibre broadband. If it can be installed at no cost to them, property owners must agree. While there are some exceptions to this law, such as if the installation breaches a body corporate rule, this change increases accessibility to fibre broadband.

5. Rental increases are limited to once every twelve months

Since 12 August 2020, property owners are only able to increase rent once every twelve months. Again, this gives greater security for rental customers and helps to regulate rising rent costs.

6. Rental property owners cannot seek rental bids

Another change coming into play from 11 February 2021 is a restriction on advertising rental properties without listing a rental price. Property owners will also not be permitted to encourage bids for rent or organise rental auctions.

This change was introduced as a result of highly competitive local rental markets which saw some applicants offering to pay more. The law protects applicants from having high demand and short housing supply leveraged against them.

What to do if your rental situation is not compliant with the RTAA

There are a couple of things you can do as a rental customer if you believe that your property owner/manager is not acting in accordance with the Act. We’ve outlined our top tips below:

1. Talk to your property owner/manager and share your concerns.
   At first instance, we always recommend communicating with the parties involved and sharing any concerns. The issue may be something that can be remedied easily, or one party might not be aware of.
   Hot tip: Follow up verbal conversations with an email detailing what was discussed and any next steps. This is a great habit to get into and ensures that both parties are on the same page.
   
2. Contact Tenancy Services to explain your situation and ask for professional advice.
   If you’re unable to reach a satisfactory resolution with the property owner directly, another avenue is to reach out to Tenancy Services. They have a service centre that can answer specific tenancy questions and help with forms.
3. Keep written records of any communication that shows non-compliance.
   It’s always good practice for both parties to keep easily accessible records of all contracts, communication and invoices. This is especially relevant if you have concerns about non-compliance with any relevant legislation.

Get in touch

Are you looking for a rental property? Check out our listings on quinovic.co.nz/rentals to see our available properties in your area.

This article is a summary of six of the key changes from the RTAA. However, we do recommend gaining a more comprehensive understanding of the legislation. This fact sheet provided by Tenancy Services is a great resource to get you started. For questions about how this will impact you directly, get in touch with your local Quinovic office.