RTA Amendments: What these changes mean for tenants and landlords

The Residential Tenancies Amendment Bill 2019 was a hotly contested argument between landlords and tenants during its time going through Parliament. However, this bill set out to clarify a number of issues that confused many landlords and tenants.

These amendments passed with unanimous backing in July, and became law early this week (27 August). These changes aren’t one sided, both landlords and tenants will benefit.

The Associate Minister of Housing, Kris Faafoi said that “this Bill makes practical changes to the Residential Tenancies Act 1986 to help ensure our tenancy laws better reflect responsibility” and we couldn’t agree more.

So, what are these changes and how will they benefit you as a landlord or tenant?

Liability for damages

This has been a contentious issue since a court ruled that tenants should be able to rely on their landlords' insurance - effectively meaning that property investors had to carry the cost of any accidental damage.

Landlords should expect normal wear and tear when renting out a property, but now if a tenant damages a rental property as a result of careless behaviour, they will be liable for the cost of the damage up to a maximum of four weeks’ rent or the insurance excess, whichever is lower.

Landlords will need to provide insurance information in any new tenancy agreement, including whether the property is insured and if so, what the excess amount is. The statement in the tenancy agreement must also inform the tenant that a copy of their insurance policy is available on request.

If they don’t provide this information, or if they don’t tell tenants in writing within a reasonable time if this information changes, they may be liable for a fine up to $500.

Unlawful residential premises

Previously, tenants who lived in premises such as converted garages, sleep-outs, warehouses or industrial buildings were not always protected by the Residential Tenancies Act.

The new Act amends the definition of “residential premises” so that regardless of whether premises can be legally lived in, they will be considered residential premises under the Residential Tenancies Act if they are lived in or intended to be lived in.

This gives the Tenancy Tribunal full jurisdiction over cases concerning premises that are unlawful for residential purposes and protects vulnerable tenants.

Contamination of premises

New regulation will be developed to prescribe the acceptable level for methamphetamine contamination, processes for testing (including when to test) and decontamination of rental properties. The regulations will be developed over the next year.

Landlords will be able to test for methamphetamine in rental premises while tenants are living there. They must provide 48 hours’ notice to tenants before entering the property.

These latest law changes are part of several rounds of tenancy reforms. The first to be introduced was the minimum standards for insulation in July. And by 2021 landlords will also have to meet minimum standards for heating and ventilation. Other changes that the Government are still consulting on include limiting rent rises to once a year and getting rid of no-cause tenancy terminations.

These changes might not be that popular with landlords and tenants, but what they do is give greater transparency and responsibility to each of them. If you have any questions regarding these changes or need more clarification, please get in touch with Keith at keith@niceplace.co.nz

Nick Phillips