New Tenancy Laws: Some considerations for landlords
Most of the new tenancy laws come into existence on 11 February 2021. The most significant change is that a landlord can no longer end a tenancy without cause by simply serving a 90-day notice. Given that a landlord will need a reason to end a tenancy, I look at some of those reasons in more depth.
1. Will a landlord be able to remove a tenant for unpaid rent?
There are different options (existing and new), but they all involve applying to the tenancy tribunal. The new option is for cumulative offences (rent overdue by more than 5 days on 3 occasions within a 90-day period.) On each occasion the landlord must give the tenant a written notice with mandatory details advising tenants of overdue rent and, as well as the notices, the landlord must apply to the Tribunal to end the tenancy.
Synopsis: Landlords must ensure the correct process is followed in relation to 'rent'. Along with correct processes when ending a tenancy, there are fines that could be imposed on a landlord for not keeping correct records up to $2000 as opposed to $200 previously. The check on a landlord's power in ending a tenancy is that the tenant can challenge notices. Proper records and evidence are needed. It's a little like cricket in that the benefit of doubt always goes to the batsman.
2. Will a landlord be able to remove a tenant due to their behaviour?
There is a new provision for cumulative 'antisocial behaviour'- the behaviour must occur on 3 separate occasions within a 90-day period. This new provision is on top of existing provisions that can end a tenancy for behavioural issues (such as the tenant has caused or threatened to cause significant damage or the tenant has assaulted or threatened to assault specified persons ).
'Anti-social behaviour' is described as harassment, or any act or omission (whether intentional or not) that can cause alarm, distress, or nuisance that is not of a minor kind. This has a broad scope but evidence needs to be produced. Again, the process requires written notice with mandatory details and application must be made to the tenancy tribunal.
Synopsis : The burden of proof on the landlord is likely to be high for proving antisocial behaviour (irrespective of the fact that it is civil standard of proof). Evidence is needed such as a tenancy agreement, rent summary, correspondences, tradesperson quotes, bank statements/accounts, inspection reports, rent book, photos, and letters. This would suggest a shift in the Tribunal's norms and standards requiring (or at least favouring) witness participation before making an order for early termination.
3. Could the landlord sidestep the amendments (in relation to ending tenancies) through fixed term tenancies?
Only if the fixed term tenancy is for less than 90 days. Otherwise, after 11 February if there is a fixed term tenancy, the landlord cannot end it unless the tenant also agrees, or one of the other reasons set out in the Act applies. The fixed term tenancy rolls over into a periodic tenancy.
4. What are the other major themes?
Rather than re-invent the wheel, I provide a shortlist with page references to a more in-depth resource produced by the Ministry of Housing and Urban development https://www.hud.govt.nz/assets/Residential-Housing...
Tenancy services have written a succinct well-presented summary factsheet:
The overall theme of the new Act is for landlords to know what their obligations are, do thorough due diligence/background checks on tenants, and keep accurate records of all required matters.
Written by Blair Franklin (Property & Commercial Partner) Sean Lennon (Property & Commercial Associate).