The New Rules For Landlords
With a bewildering range of new regulations, property investors may be under pressure. Bindi Norwell of the Real Estate Institute of New Zealand looks at what’s ahead.
11 October 2021
JUNO Autumn 2020
It’s a busy time for investors – and it can be a worrying time.
The Labour Government’s back in power, bringing some uncertainty. And investors have to make sure their properties are ready for a raft of new laws set to come into effect over the next three years.
Let’s look at some of the issues landlords face.
Investors should already be familiar with the Healthy Homes legislation because new rules for insulation came into effect on 1 July 2019.
This law’s about ensuring tenants have access to warm, dry rental properties that will help raise the standards of our housing stock and protect tenants’ health.
The most urgent change investors need to understand is that the Compliance Statement deadline has passed – it was pushed out to 1 December from 1 July 2019, because of Covid-19.
From 1 December, every landlord must include a statement of their current level of compliance with the Healthy Homes Standards in any new or renewed tenancies.
You’ll probably need to get inspections by qualified tradespeople, or those with sufficient, relevant experience, because the information you’ll need for compliance statements is quite technical. It includes:
- Ceiling and underfloor insulation R-values. R-values are a measure of how well a barrier, like insulation, a window, a wall, or a ceiling, stops heat escaping.
- Heating requirements, or any ‘top-up’ allowances for existing heaters.
- Statements around efficient drainage systems and ventilation systems.
- Whether a property has any enclosed subfloor spaces, and if so, whether the space has a ground moisture barrier.
Not too far behind those rules are the wider healthy homes standards.
From 1 July 2020, private landlords must make sure their rental properties comply with the healthy home standards within 90 days of any new or changed tenancy, including the heating, insulation, ventilation, moisture ingress, drainage, and draft-stopping standards.
You can find more detailed information about these changes by visiting www.tenancy.govt.nz and looking up the healthy homes standards.
Residential Tenancies Amendment Act
The Residential Tenancies Amendment Act (RTA) was passed in August 20219 and there were two key changes that came into effect right away.
Transitional and emergency housing became exempt from the Act.
And landlords can now only increase rent once every 12 months, where in the past, increases were allowed once every six months.
Any rent increase notices given to tenants from 12 August 2020 on must comply with the new 12-month rule.
Phase 2 of the legislation came into effect from 11 February 2021. Key changes investors need to be aware of include:
Landlords will no longer be able to give a no-cause 90-day notice to end a tenancy.
To end a tenancy for anti-social behaviour, the tenant must have been given three written notices for anti-social behaviour within 90 days, and the landlord must apply to the Tenancy Tribunal with evidence of this behaviour.
Other valid reasons for terminating a periodic tenancy can be found at www.tenancy.govt.nz
Fixed-term tenancy agreements will now automatically convert to periodic, or ongoing, tenancies, except in a few cases:
- If a landlord gives notice using one of the reasons listed in the RTA for periodic tenancies.
- If a tenant gives notice for any reason at least 28 days before the end of the tenancy.
- Or if both parties agree to extend, renew, or end the fixed-term tenancy.
Minor changes to the property
For the first time, tenants will have more freedom to make minor changes to the property they rent, like adding shelving, baby gates, picture hooks, curtains, or window coverings.
They can also secure furniture or appliances to protect against earthquakes or to make a property child-safe.
Advertising a property for rent
Rental properties will no longer be allowed to be advertised without a rental price listed.
The new rules have also prohibited rental ‘bidding’, where tenants might try to bid more than competitors to secure a flat. Nor can landlords encourage tenants to pay more than the advertised amount.
More powers for MBIE
The Ministry of Business, Innovation and Employment, as the regulator, will have more power to take action against people who’re not meeting their obligations under this new phase.
The Tenancy Tribunal can now hear cases and make awards of up to NZ$100,000 (up from NZ$50,000).
Privacy has also been stepped up.
If someone’s involved in a published Tenancy Tribunal case and is successful, they can apply for a suppression order to remove the names and identifying details from the published case.
The third phase of the RTA will take effect no later than 11 August 2021.
Under Phase 3, tenants who are experiencing family violence can withdraw from a tenancy by giving just two days’ notice.
Also, if a tenant assaults the landlord, owner, a member of the landlord’s family or the landlord’s agent, and the police lay a charge, the landlord can give the tenant 14 days’ notice to leave the property.
From 1 December, new changes to the Privacy Act also come into effect.
Landlords now have responsibilities around the personal information they collect from tenants and store.
More information can be found at www.privacy.org.nz.
Still more to come
As part of its housing manifesto, Labour announced that it will introduce a code of conduct to make sure that property management services meet professional standards.
It says it will repeal and replace the Resource Management Act 1991 and will review and modernise the Unit Titles Act 2010.
So far, we don’t know when these proposed changes will happen, but landlords should look out for these in coming months.
Bindi Norwell is the outgoing chief executive of the Real Estate Institute of New Zealand
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Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.