RTA amendments finally passed

Thursday 22 July 2010

The Residential Tenancies Amendment Act was passed by Parliament yesterday, with no last-minute changes to what was previously on the table.

By The Landlord

Changes from the last bill which will now become law include clearing up confusing processes around terminating and renewing tenancies, and introduces new financial penalties for tenants harassing neighbours and abandoning a premises with rent owing.

"These changes respond to significant change in the residential rental market since the first act's inception in 1986," housing Minister Phil Heatley says.

New Zealand Property Investors Federation (NZPIF) president Martin Evans is pleased to see measures that NZPIF have been lobbying for since as far back as 2004 are finally being made into law.

"The new laws are about upholding the balance between landlords and tenants and enables landlords to better manage their rental accommodation," Evans says.

He says a key change for landlords in the act is that abandoning tenancies with rent arrears and no reasonable excuse will become an unlawful act and tenants could be required to pay the landlord up to $1,000 compensation.

"Up until now there have been no disincentives for tenants to abandon their rental property owing money. If they were ever found, all they had to do was pay back what they owed," Evans says.

"Many tenants probably thought it was worth a go."

The act has also been extended to cover boarding houses, which means boarding house landlords will have to give tenants 28 days' notice that a tenancy is being terminated and the tribunal will be able to order landlords of boarding houses to carry out necessary repairs and maintenance.

"Over recent years, the private rental market has been increasingly important in housing those who choose, or need, to rent their homes for lifestyle or affordability reasons," Heatley says.

"It is therefore imperative the legislation governing the sector supports adequate provision of stable, good-quality rental housing."

Landlords will also come under fire if properties are not up-to-scratch, with landlords providing sub-standard housing facing fines of up to $3,000 under the new rules, Heatley says.

The laws will come into force later this year once supporting regulations have been approved and published.

Other key changes include:

  • Landlords can have reasonable expenses they incur in recovering a debt reimbursed by the tenant.
  • The introduction of new unlawful acts by a tenant with exemplary damages going to the landlord, including: failure to quit the premises at the end of a tenancy, using the premises unlawfully, harassing other tenants or neighbours and exceeding the maximum number of residents allowed.
  • The tenancy can be terminated if tenants assaults or threatens the landlord/owner, or members of their  family, agent, other occupier or neighbour.
  • Landlords can immediately dispose of goods left behind at the end of a tenancy if the value of the goods is less than the cost of storing, transporting or selling them.
  • Enhancements to dispute resolution, including increasing monetary jurisdiction of the Tenancy Tribunal from $12,000 to $50,000 so most disputes can be resolved quickly.
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