Residential Tenancies Amendment Act 2019

August 29, 2019

  

The Residential Tenancies Amendment Act 2019 came into force on 27 August 2019, bringing several changes for tenants and landlords.

Liability for damage

This is one of the most significant changes, addressing the question of who pays for accidental damage to a rental property. Previously landlords had to effectively carry the cost of any accidental damage.

The law change makes tenants liable for an amount equal to four weeks' rent, or the landlord's insurance excess, whichever is lower, in any incident of damage as a result of careless behaviour.

These amendments intend to:

  • encourage tenants to take care of rental properties while making sure they are not liable for excessive costs
  • ensure landlords are not out of pocket for careless damage caused by tenants
  • encourage cost effective insurance arrangements

Insurance companies will not be able to pursue tenants on the landlord's behalf unless the damage was intentional or due to an unlawful act.

Insurance details

Landlords must now give their new tenants (and any other tenants who ask) their insurance details. The aim of this is to give tenants a clear understanding of what they would need to pay in the event of damage.

If they do not provide this, or they fail to tell tenants in writing of any changes, they can be fined up to $500.

Contamination of premises

New Zealand landlords have all heard horror stories of rental properties being contaminated with methamphetamine (meth) which often has significant financial and emotional implications. The amendment allows for regulations to be made to address how contamination of rental properties is tested and managed.

The Act allows landlords to test for contamination so long as they give 48 hours' notice before entering a property (or 24 hours for a boarding house room), they will have to tell the tenant what they are testing for and share the results. If contamination is established the landlord will be able to serve a seven-day eviction notice. This allows landlords to be more proactive to protect their property.

Landlords are not able to knowingly rent premises that are contaminated above the prescribed level without decontaminating in accordance with the regulations. They will be liable for up to $4,000 if they fail to adhere.

Unlawful Residential Premises

This amendment gives the Tenancy Tribunal full jurisdiction over cases concerning premises that are unlawful for residential purposes, such as garages and sleep-outs, which don’t meet minimum requirements for renting. They are able to enforce actions against landlords who fail to meet minimum standards. Regardless of whether the property is legally allowed to be lived in or not, tenants are protected in the way that they can still go to the Tenancy Tribunal.

For more detail on these changes, refer to the Residential Tenancies Amendment Act 2019 brochure below.

https://www.tenancy.govt.nz/assets/Uploads/files/residential-tenancies-amendment-act-2019-brochure.pdf

Nexia New Zealand have expertise in investment and rental property, both residential and commercial. We can provide a range of services in this area including tax compliance and advice, profit forecasts and budgets, property management and financial reporting. For more information, please contact Andrew Kidd on 03 379 0829 or akidd@nexiachch.co.nz.

 

 

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