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Changes To The Residential Tenancies Act 1986
March 3, 2020 August 26, 2020 Ali HedleyBlog
What's Changed About the Residential Tenancies Act 1986?
With a slate of proposed amendments to the Residential Tenancies Act 1986, local property management companies in Auckland have had to refine their practices and work hard to stay compliant. Below, we outline these changes so you can stay in the know.
What is the Residential Tenancies Act 1986?
The Residential Tenancies Act 1986 replaced the Tenancy Act 1955 and the Rent Appeal act 1973, as well as their subsequent amendments, outlining a new set of rights and responsibilities for landlords and tenants alike. The law also established the Tenancy Tribunal, which to this day is used to arbitrate disputes between landlords and tenants.
What changes have been made to the Residential Tenancies Act?
Several changes to the Residential Tenancies Act 1986 have been implemented and more are proposed. These include:
The Healthy Homes Guarantee – An updated set of standards for heating and insulation in rental properties.
A ban on letting fees – Letting agents and solicitors may no longer charge tenants to grant a tenancy, though they may still charge a landlord for such services.
Improvements to tenant security – Landlords may no longer use no-cause terminations to discontinue periodic tenancy agreements.
Limit on rent increases – Rent increases are now permissible only once every 12 months.
A ban on solicitation of rental bids – Landlords may no longer solicit potential tenants for rental bids and must provide a set rent amount when pursuing tenants.
Stricter penalties for noncompliance – Harsher financial penalties and the introduction of new litigation tools allow for more effective action against noncompliant parties.
More flexibility for tenant additions – Tenants now have more freedom to install minor enhancements such as baby proofing, fire alarms, earthquake brackets, and other safety and security measures.
Why were these changes proposed?
In short, these changes have been made in response to significant shifts in New Zealand's housing market demographics. With home ownership in New Zealand now at its lowest point in the past six decades, the number of households that are renting long-term has ballooned to over a third of the country's population. What's more, the number of children raised in rented homes has leaped from 26% in 1986 to nearly 50% today.
These demographic changes have fundamentally altered the balance of power between tenants and landlords, and the government has proposed these changes to ensure that the rights of tenants in this environment are secured. Importantly, these changes to the Residential Tenancies Act 1986 do not seem to have arisen in response to evidence of widespread mistreatment or exploitation of tenants by landlords. Rather, they seem to be precautionary, shoring up perceived weaknesses of tenants in a changing NZ housing market.
Get help from property management experts.
The proposed changes to the Residential Tenancies Act 1986 tip the scales slightly toward tenants. At Lochore's Real Estate, we work hard to stay abreast of changes to tenancy law and can help you navigate any compliance issues that may arise, we work to optimise the return on your investment whilst minimising the risks. As a leading Auckland property management office, we appreciate the relationship between landlords and tenants, and understand that positive relationships make your job as a landlord much easier. Contact Lochore's today to learn more.
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