Rent reduction for sub-division
Question from Jacqui updated on 15th April 2016:
The house in question has been sold keeping the existing tenants. The current property included a big back yard and garage. But the back yard is now being sub-divided which means the garage will be demolished.
The tenants will have to store their belongings from the garage elsewhere and there will no longer be a backyard as the contractors will be running services, ripping up the driveway and putting a house on the backyard. Are the tenants entitled to a rent reduction?
Our expert Allan Galloway responded:
Where a property sells and existing tenants remain in the property, the terms and conditions of the existing tenancy will normally continue with the new property owner (the landlord) inheriting the original tenancy agreement.
Where a landlord wishes to vary the terms of the tenancy agreement, for example by removing amenities or facilities, or by sub-dividing the premises, this may only be done with the consent of the tenant(s). As part of any negotiations to vary the agreement, if the tenant was to lose access to a part of the property or its facilities, the tenant may wish to negotiate the terms associated with the varied agreement (eg: by way of a rent-reduction or compensation) for the loss of amenities, be it space or facilities.
If the landlord and tenant cannot reach an agreement as to whether any form of compensation will apply to the proposed variation of the agreement, and perceived loss of amenity, the tenant may make an application to the Tenancy Tribunal to have the matter resolved.
If you need any further assistance or advice please visit our website at www.tenancy.govt.nz or call our Tenancy Advice line on 0800 TENANCY (0800 836 262).The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.