90 days no more! Changes to the Residential Tenancies Act 1986

March 4, 2021




90 days no more! Changes to the Residential Tenancies Act 1986

There have been big changes to residential tenancy laws in the last few weeks, coming on the back of the Residential Tenancies Amendment Act passed last August. While a handful of changes came into effect immediately after the Act was passed, 11 February saw most of the eighty-odd changes take force. These changes mean big things for the 600,000 households living in rental accommodation in New Zealand, especially in terms of rent control and evictions.

There are various types of residential tenancies governed by the Act. The two most relevant kinds for our chat today are fixed-term residential tenancies and periodic residential tenancies, which have pretty intuitive meanings. Fixed-term tenancies are where you know how long your lease will be, for example signing on from 1 January to 31 December or for 24 months from the date of signing.Periodic tenancies are where there is no end date set. Tenants keep paying rent tenancies keep on rolling until either party wants to bring the relationship to an end.

There are two important points to make about these two kinds of tenancies. First, fixed-term tenancies automatically become periodic tenancies at the end of the contractual period unless either party gives notice that they are extending or terminating the agreement. Second, periodic tenancies are much harder to bring to an end, especially after 11 February this year.

Most notably, the Amendment Act abolished the landlord’s ability to terminate a tenancy for any reason by serving 90 days’ notice. Now, in order to get the tenants out in 90 days the landlords need a good reason. Good reasons include selling the property, converting it into a commercial premises, or carrying out extensive renovations. In cases where landlords want to move in, or their family or employees need a place to live, then the landlords can end a periodic tenancy by giving at least 63 days’ notice (9 weeks – up from 6 weeks’ notice). There is a catch – the reason given by the landlord must be actualised within 90 days of the tenant moving out. That means that if the landlord says he or she wants the tenant out so that their brother can have a place to stay, that brother needs to move in within 90 days of the tenant moving out. These changes aim to prevent landlords evicting tenants without good reason.

So, what is a good reason for eviction? In cases of damage to property, antisocial behaviour (including assaulting the landlord) or non-payment of rent, the landlord can apply to the Tenancy Tribunal for an order to end the tenancy. Non-payment has slightly different rules depending on the kind of tenancy involved. In most cases, rent 21 days in arrear gives the landlord the ability to apply to the Tenancy Tribunal to end the agreement.The rules are different for periodic tenancies. To end a periodic tenancy for non-payment of rent, rent must have been at least five working days late on three occasions during a 90-day period. The landlord cannot take the tenant to the Tribunal unless he or she served the tenant written notice each time rent was late and complied with the relevant time-limits and formalities.

Since we’re talking about money, let’s have a look at some other important changes to prices and costs in the rental market:

  • Rent can only be increased by landlords once every 12-month period. This is a change from the previous position of rent changes being allowed once every 180 days (6 months).
  • Rent must be clearly advertised when landlords are seeking new tenants.
  • Rental bidding is prohibited.

Finally, it appears that the new laws contemplate renting becoming a common, long-term way of living. The Amendment Act now allows renters to turn their houses into homes by giving them express permission to make some renovations and minor changes. The landlord may not unreasonably withhold consent for these activities, but he or she must be contacted first. It still remains to be seen how broadly the term “minor changes” will be interpreted, but it likely extends to things like wall-hangings and child safety gates.

Lesson of the day: it is no longer a landlord’s world. Tenants have lots of rights, since Parliament has decided that more needed to be done to protect the third of the population living in rental accommodation.