Landlords, the law constantly changes

Farmer Freddy learns of the recent changes to the Residential Tenancies Act 1986 and how they affect him as a landlord.


Ever since the tenants of Farmer Freddy's rental property vacated the premises earlier in the year, Freddy has been considering re-letting his little nest-egg.

All Pebbles' nagging has obviously paid off. Freddy, quite sensibly, decides to give her a call to discuss his options.

Freddy explains the situation to Pebbles and asks her to give him a run down on the relevant law.

"To be honest," says Freddy, "I could probably go ahead and do this all myself. After all, it's only been six months since the last tenants left, and the law can't have changed that much in such a short time".

"Sorry to burst your bubble Dad," lectures Pebbles, "but it has. New changes to the Residential Tenancies Act were introduced on 1 October. On the whole, these changes are reasonably landlord-friendly, although there are a few changes which will affect your obligations as landlord, which you should be aware of."

"Go on," says Freddy, "enlighten me."

"Well, you know you're planning to take a month off to see your cousin in Europe," says Pebbles.

"What does that have to do with me letting out my property?" says Freddy.

"Under the amended legislation," continues Pebbles, "if a landlord is going to be outside New Zealand for more than 21 consecutive days, they have to appoint a New Zealand-based agent and notify the tenant of the agent's name, contact address and address for service."

"I can't afford to pay a real estate agent to manage the property for me while I am away," barks Freddy.

"Don't worry about that, Dad," Pebbles says. "It doesn't have to be a professional agent. Your New Zealand-based agent can be a family member or a friend.

"As has always been the case," she continues, "you have to ensure that you comply with your obligations as landlord regarding the cleanliness and maintenance of the property, and ensure you comply with all the relevant building, health and safety regulations.

"However, under the new legislation, it will be an unlawful act if you fail to comply with these obligations, and you could also be subject to a $3000 fine. Any interference with the privacy of the tenant or unlawful entry into the property by the landlord, will also be an unlawful act, and could result in a fine of between $1000 and $2000. So no more popping over unannounced, or leaving that roof leaking for months before repairing it."

"Next thing you'll be telling me I can't even increase the rent when I want to," scoffs Freddy, "I was silly not to increase the rent under the previous tenancy after I did all that work to the kitchen and bathroom.".

"Sorry to break this to you, Dad, but actually, you can't. You can only increase the rent if you have made substantial improvements to the premises, if those improvements increase the value of the property and constitute a material benefit to the tenant, and you had the consent of the tenant to make those improvements in the first place. Not all is lost, though. You can apply to the tribunal to increase the rent if the tenant doesn't agree to an increase."

"A number of unlawful acts have also been added to the legislation relating to the tenant's responsibilities, too. Any tenant who uses the premises for an unlawful purpose can be fined up to $1000 - and if, like the last tenants, the new tenants abandon the premises without reasonable excuse and while the rent is in arrears, they will be subject to a fine of $1000 as well as having to pay all rent arrears," Pebbles says.

"I've only mentioned a couple of the important points, Dad. You did the right thing by talking to me first. The law relating to landlords and tenants is constantly changing, so it's always wise to get advice if you are a new landlord or coming back to it after a while out."

 

The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document.
If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser.
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