12 March 2021

With the second phase of the RTAA now in effect, it’s important that property owners gain a thorough understanding of how the new laws impact their investment. One of the main changes in Phase 2 is enforcement measures being strengthened against those who are not meeting their obligations, so failure to comply can be costly.

In this article I take a look at two of the key changes that have come into effect;

  • Terminating tenancy agreements
  • Making minor changes to a property


Terminating tenancy agreements

One of the most talked-about changes to come out of the RTAA is limiting the reasons why a property owner can end a tenancy agreement. Since February 11th, rental property owners are not be able to end a periodic tenancy without cause and can only terminate if the situation aligns with specific termination grounds. Fixed-term tenancies now also automatically convert to periodic tenancies at the end of their term unless both parties agree otherwise.

How does this impact property investors?

This law change can seem daunting for rental property owners. Without the security of a fixed-term tenancy, rental customers can provide notice at times when it is difficult to fill a vacant property, such as over the Christmas holidays.

How can investors best manage this change?

There are three fundamental steps that property investors can take to assist in managing this law change.

  1. Be thorough in the tenant selection process, ensuring the tenant and the property are a good match.
  2. Build strong, honest relationships with the people living in your property.
  3. When it comes to the end of a fixed-term, simply ask your tenant if they would prefer to extend their fixed-term tenancy. When given the option, we often find that tenants choose the security and certainty of a fixed-term.

At the end of the day, long-term tenants mean less vacant time for your property and less time spent on marketing and administration. If you put in the work at the start of a tenancy, this can be a win-win situation.



Making minor changes to the property

Another of the key changes to come out of the RTAA is the ability for tenants to request making changes to the property they live in. The property owner must respond to the request within twenty-one days and if the requested changes are minor, the owner may not decline.

How does this impact property investors?

Essentially, this law provides tenants with the opportunity to make minor changes to the rental property so it better suits their personal needs. These changes could include baby-proofing the property, securing furniture to walls to protect against earthquake risk, hanging pictures and more. When tenants move out at the end of their tenancy, they need to remediate the property to a satisfactory standard (if the property owner doesn’t agree to the minor changes remaining).

The main impact of this amendment is the requirement for property owners to respond to their tenant request within twenty-one days.


How can investors best manage this change?

I recommend all property owners;

  1. Research what is considered ‘minor changes’ and be ready to accept these if requested. Remember, it is best to put everything in writing, so any changes made to the property should be documented.
  2. Try suggesting a compromise If you feel uncomfortable with a specific change.
  3. Respond promptly to any requests and communication from your tenants.

Talk to a professional

These are just two of the many changes that have rolled out as part of the RTAA. If you feel uncertain about any of the changes or what they mean for you, get in touch with a professional. At Quinovic, we have an expert understanding of all rental property legislation and can provide practical advice to ensure you keep compliant.




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