Our Experts Answer:
No. Landlords are not permitted to charge tenants “key money” before or during a tenancy. Key money is widely defined in the Residential Tenancies Act 1986 and includes any sum of money demanded by way of fine, premium, reimbursement of expenses, or administration charges. Landlords can only recover the rent lawfully owed to them by their tenants, any extra penalty or administration charges associated with rent recovery are not permitted by law. Tenants are obliged to pay their rent on time, and if they default on rent payments we advise landlords to issue a 10 working day letter to allow the tenant(s) to remedy the default. Landlords can apply to the Tenancy Tribunal to recover the rent in arrears immediately after serving their tenant(s) with a 10 working day letter, without waiting for the 10 working day period to expire. This is the correct process for landlords to follow, see our website for more information: www.dbh.govt.nz/tenancy or free phone 0800 TENANCY (83 62 62) for advice and assistance.
The Department of Building and Housing provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.