Residential Tenancies Act July 2020

Reading Time: 4 Minutes  

Residential Tenancies Amendment Bill at Second Reading

The Government is currently reviewing the Residential Tenancies Act and Crockers has been following progress closely for our clients. On 7 July, 2020, the Select Committee reported back to Parliament with its recommendations.  The Bill is now ready for its Second Reading, with Parliament working its way through the recommendations made by The Social Services and Community Select Committee.

The main points of the Select Committee recommendations are discussed below. As this Bill progresses we will keep everyone informed of the changes and consequences for landlords.

No Rent Bidding

Rent bidding would be prohibited in an amendment to the Act, with landlords being obligated to state the amount of rent when advertising residential premises. Landlords would not be allowed to ask multiple applicants to pay more than this advertised price. The Select Committee recommended this not apply to service tenancies, where housing is included as part of an employment package and as a result, the property is not normally advertised for rent.

Withholding Consent Prohibited

The landlord would be prohibited from withholding consent unreasonably to release someone from a tenancy if they have another applicant, while allowing for the normal checks. The Select Committee recommended landlords should be required to respond to an assignment request in writing, and within a reasonable amount of time.

Fibre Connections

Landlords must allow and facilitate the installation of fibre broadband services to properties, with only a few exemptions. Exemptions include compromising weathertightness of a property, compromising the character of a building, and upcoming renovations which may be impeded by installation.

Termination by Notice

The Bill would remove “no cause” terminations to prevent landlords from being able to end a periodic tenancy without a reason. Instead, landlords would be able to end a periodic tenancy on various specific grounds:

• Termination to allow the owner or a family member to move in
  The Bill allows that the landlord may end a periodic tenancy on at least 63 days’ notice if the owner requires the premises as the principal place of residence for themselves or a family member. The Select Committee recommended the further restriction that the owner or their family member must move into the premises within 90 days.
  
  
• Termination where the landlord requires the premises for an employee
  A landlord would be allowed to terminate a periodic tenancy on at least 63 days’ notice if the premises are to be occupied by employees of the landlord. This possibility would have to have been clearly stated in the tenancy agreement.
  
  
• Termination to change to a commercial premise
  A landlord would be allowed to terminate a periodic tenancy by giving at least 90 days’ notice if the premises are to be converted into commercial premises (for example, to be used as an Airbnb). The Select Committee recommended the premises must be used for a commercial purpose for at least 90 days.
  
  
• Termination to allow renovations
  Termination of a periodic tenancy would be allowed if extensive alterations, refurbishment, repairs, or redevelopment were to be carried out, and it would not be reasonably practicable for the tenant to remain in place. The Select Committee recommended the landlord should take material steps towards beginning renovations within 90 days of the termination date.

• Termination because of demolition
  A landlord would be allowed to terminate a periodic tenancy, with at least 90 days’ notice, if the premises are to be demolished. As above, the Committee recommended the landlord should take material steps towards beginning demolition within 90 days.
  
  

Termination For Anti-Social Behaviour

A landlord would be allowed to apply to the Tribunal for an order terminating a periodic tenancy on the grounds of anti-social behaviour. The Select Committee recommended that the landlord must be able to prove that anti-social behaviour had occurred, instead of the tenant having to disprove the anti-social behaviour.

Privacy and Access to Justice

It is recommended that the Bill provides for automatic suppression of the applicant’s details when the Ministry of Business, Innovation and Employment takes a case on behalf of a party.

Enforcement

The Bill provides that landlords with six or more tenancies would be subject to higher infringement fees as these landlords are seen to be making a living from being a landlord and should be fully aware of their obligations under the Act. As this may capture some landlords who may neither own boarding houses nor large-scale tenancies, the Select Committee has recommended that any tenancies related to a room-by-room tenancy that is not a boarding house should be treated as only one tenancy.

Failing to Provide Minimum Information

The Select Committee recommends that landlords who fail to ensure the tenancy agreement contains landlord-related information specified by the Act are committing an unlawful act which will attract exemplary damages.

Requirement to Retain Documents

The Bill would require landlords to keep certain records and provide them to the regulator on request, including records of any building work, prescribed electrical work, or other maintenance work. The Select Committee recommended that the requirement to keep records should relate only to building work requiring consent/certification

As the Bill is only at its Second Reading there may still be some minor changes to come. After the Bill has its Second Reading, the Bill will progress to the Committee of the Whole House stage, where the provisions of the Bill are examined in further detail.

For further information see the Select Committee Report, view the progress of the Bill, or contact the helpful Crockers Property Management team.