With over 34 percent of people in New Zealand renting the property they live in, the passing of the Residential Tenancies Amendment Bill (“the Bill”) has the potential to significantly impact the tenant and landlord relationship, particularly with regard to ending a tenancy.
Some of the drivers behind the changes, according to Associate Housing Minister Kris Faafoi, are “More Kiwis than ever are renting now, including families with young children, as well as older people, and it’s important that there are appropriate protections in place for them. Renters should be able to put down roots in their community and not face the stress of continually having to find a new home.”
One of the reforms to the Residential Tenancies Act 1986 (“RTA”) relates to the tenancy agreement and how it may be ended. There are two different types of tenancy agreements a tenant can enter into, fixed term or periodic. A fixed term tenancy agreement is where the landlord and tenant agree on a period with an end date, where the tenant will occupy the landlord’s property. A periodic tenancy agreement is on-going, until either the landlord or tenants decide to end the agreement.
Prior to the reforms, to end a periodic tenancy, tenants had to give landlords 21 days’ written notice as to when they will be ending the tenancy. Landlords had to give tenants 90 days’ written notice to terminate the tenancy and were not required to give any reason or explain why they were ending the tenancy. A landlord could, under special circumstances, end a periodic tenancy by giving 42 days’ written notice.
Under the Bill, and effective from 11 February 2021, a tenant is now required to give the landlord 28 days’ written notice as to when they will be ending the tenancy and a landlord can no longer end a tenancy without giving a valid reason. The specified reasons by which a periodic tenancy can be ended by the landlord, giving 90 days written notice, include:
- The property is to be put on the market for sale within 90 days of the termination date.
- The property has been sold (unconditionally) with vacant possession.
- Extensive alterations, repairs or renovations of the property are to be carried out.
- The premises are to be demolished within 90 days of the termination date.
Further, the shorter period of 42 days for special circumstances is increased to 63 days. These circumstances are:
- The landlord requires the premises, within 90 days after the termination date, as the principal place of residence for themselves or a family member.
- The property is required for occupation by employees or contractors of the landlord.
The Bill also changes what happens when a fixed-term tenancy agreement comes to an end. Under the new rules, a fixed-term agreement will convert into a periodic tenancy unless:
- A tenant gives notice for any reason at least 28 days before the end of the tenancy.
- A landlord gives notice using one of the justified reasons for ending a periodic tenancy.
- Both parties agree to extend, renew, or end the fixed term tenancy.
The Bill also makes other changes, including:
- Limiting rent increases to once every 12 months, currently every 6 months.
- Improving the tenant’s ability to assign their tenancy when it is reasonable.
- Financial penalties for breaches have been increased.
- Requiring landlords to permit and facilitate the installation of ultra-fast broadband at no cost to the landlord, unless specific exemptions apply.
- Clarifying the rules around the tenant wanting to make minor changes to the property.
Evicting a Tenant on a Periodic Contract
The landlord can apply to the Tenancy Tribunal (“Tribunal”) for an order to terminate a periodic tenancy as follows:
- The tenant has engaged in three separate incidents of anti-social acts in a 90-day period and the landlord has issued the tenant with a written notice for each of the incidents.
- The tenant was at least five working days late with their rental payments on three separate occasions within a 90-day period and the landlord has issued the tenant with a written notice in relation to each of these late payments.
The landlord must make application to the Tribunal within 28 days of giving the third notice.
Given that the requirements for ending a periodic tenancy under the Bill are met and upheld, it is an unlawful act if the tenant stays in the tenancy without the permission of the landlord. If a tenant stays at the property without the permission of the landlord, the landlord can apply to the Tribunal for rectification.
If the tenant refuses to leave, a landlord should try self-mediation first and try to come to an agreement with the tenant. If an agreement cannot be made the landlord should then follow the steps of applying to the Tribunal. These steps are:
- register to apply,
- log in to the Tenancy Tribunal Application online tool and fill in the application form, and
- pay the application fee ($20.44) online and submit the application.
The Tribunal hearing will usually be within 20 working days of the application. If you are successful, the Tribunal may order the other party to reimburse the application fee along with the other remunerations.