Taking over tenancy

Ian asks:
(updated on Thursday, March 21st 2013)

I am a first-time landlord who took over existing tenants when I purchased my house. I have a few problems. Firstly, the existing tenants are untidy and unclean (although I am unsure of the condition of the house when they first moved in). Secondly, the previous property managers did the lawns, so I do too, even though it is not in the tenancy agreement. Thirdly, the rent is $290pw and I want to increase it. So, can I give the house a good clean and sign a new tenancy agreement saying this is the level of cleanliness I expect? Also, can I state that the tenants must mow lawns? Can I increase the rent without waiting the 180 days? Where can I find a reasonable estimate of rents? Alternatively, I could evict the tenants and then find new ones? But how do I know how easy it will be to find new ones?

Our Experts Answer:

Where a new owner purchases a tenanted property with a current tenancy agreement in place, the new owner will inherit the tenancy agreement, with all the original terms and conditions of that existing agreement. Under the Residential Tenancies Act 1986 (the Act), tenants are required to keep the premises reasonably clean and tidy. If you believe your tenant is not complying with this obligation, you may wish to discuss the matter with the tenant in the first instance. If this does not resolve the situation, you may give the tenant 14 days’ written notice to carry out the work required to ensure the property is in a reasonably clean and tidy condition. As the notice must be in writing, service time must be allowed for, and a copy of the notice retained. A template for 14 days’ notice and information about service times can be found on the Ministry of Business, Innovation and Employment, Building and Housing Group’s website (http://www.dbh.govt.nz/pubs-sorting-out-problems). If the tenant does not comply with the notice, you could apply to the Tenancy Tribunal to have the matter resolved. Where the responsibility for lawn mowing is not specifically written into the tenancy agreement but the previous landlord assumed responsibility for this, there may have been a verbal agreement between both parties in respect of this responsibility (which would form part of the terms and conditions inherited as part of the tenancy). Verbal agreements between both parties can be legally binding, however, it is recommended that any agreement is recorded in writing (preferably on the tenancy agreement) to ensure there is no confusion over what was agreed to. To determine whether an agreement regarding the responsibility for lawn mowing was previously established, you may consider discussing it with the tenant(s) and the previous landlord. Under the Act, landlords may increase the rent for a periodic tenancy (a tenancy that is not a fixed-term) by giving the tenant at least 60 days’ written notice of the increase. The notice must specify the amount of the increased rent and the day it will take effect, which cannot take effect within 180 days of the start of the tenancy or of any previous rent increase. As the notice must be in writing, service time must be allowed for (as noted above). Where the tenancy is a fixed-term tenancy, rent may only be increased where a provision in the tenancy agreement permits an increase. Information regarding Market Rent statistics can be viewed on the Building and Housing Group’s website (http://www.dbh.govt.nz/market-rent). However, please note that the Market Rent statistics are derived from information gathered from bonds that are lodged with the Building and Housing Group, and therefore may not be a true indication of the rental market. It is recommended that this information is used as a guide only. You may also wish to contact local Real Estate Agents or Property Management companies in the area the property is located to determine what similar properties in similar areas are renting for. To terminate a tenancy, in most cases landlords are required to give a minimum of 90 days’ notice to terminate a periodic tenancy. Fixed-term tenancies cannot be ended by notice, but may be ended by mutual consent (or by the Tenancy Tribunal in certain circumstances). Notices to terminate a tenancy must contain certain information and service time must be allowed for. To find out more about the requirements for notices of termination (and service time as noted above), please visit the Building and Housing Group’s website (www.dbh.govt.nz). You may also wish to discuss how quickly properties are let with local Real Estate Agents and Property Management companies. To discuss your tenancy situation further, or for information about rent increases and our market rent information you can visit the Ministry of Business, Innovation and Employment, Building and Housing Group’s website (www.dbh.govt.nz), or call 0800 TENANCY (0800 836 262).

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