Stay on the right side of the Residential Tenancies Act and avoid rental property problems, by knowing your responsibilities as a landlord, and the rights of your tenants.
You may have read recent reports of a greater number of Kiwis electing to forgo home ownership in favour of renting. Demand for good rental properties remains strong, and it’s important that landlords and tenants follow the rights and responsibilities that are governed under the Residential Tenancies Act 1986.
Knowing your responsibilities and your tenant’s rights under the Act can help prevent costly and stressful problems when letting out residential property. Here’s some best-practice advice to help you stay on the right side of the law.
Keep it clean and tidy
As a landlord, if you want to attract a tenant who will look after your property, you should ensure that your property is clean and tidy and presented at its best at the beginning of each tenancy.
Stay in touch, but avoid harassment
A tenant is entitled to quiet enjoyment of the property, which means that a landlord cannot harass a tenant. However, to avoid problems it important for you as landlord to keep in touch with your tenant, and that landlord contact details are given to the tenant.
Pre-tenancy application forms
It is advisable to have a prospective tenant complete a pre-tenancy application form, which is filled out by the prospective tenant and may be used by the landlord for credit and reference checks.
If the landlord contacts referees and does a credit check and they don’t like what they find out, the landlord is not obliged to advise a prospective tenant why they are not going to let the property to them. However it is important that a landlord does not tell the prospective tenant that they can have the property, or that the prospective tenant says they will take it, or that money is paid, as this may be binding even if the agreement has not been signed.
Collecting personal data
The landlord is able collect information about the tenant on a pre-tenancy application form, but be aware – The Privacy Act 1993 applies here, and a landlord should be familiar with how the Act applies to the information that is provided to them in a pre tenancy form.
A landlord must have a lawful purpose for collecting the tenant’s information and that purpose has to be relevant to the business of being a landlord. The landlord must let the tenant know why they are collecting the information and what it will be used for. The landlord must ensure that they store the information securely so that no one else can access that information.
Once the landlord has completed the credit and reference check the parties need to complete a tenancy agreement. Under the Residential Tenancies Act, all tenancies must have a written tenancy agreement, both parties must sign the agreement and the landlord must give the tenant a copy before the tenancy begins.
Further conditions may be included in the agreement that are specific to the particular tenancy however, if it is inconsistent with the Residential Tenancies Act then it has no effect. A landlord cannot enforce something that is outside the law and the tenants cannot give away any of their rights.
Tips on rent and bonds
- A landlord cannot require a tenant to pay more than 2 weeks rent in advance;
- The tenant must be given 60 days notice of a rent increase;
- Rent cannot be increased within 180 days of the start of a tenancy or the last rent increase;
- A bond is not compulsory, but a landlord can require up to 4 weeks rent as a bond;
- Bonds must be paid by the landlord to the Ministry of Business, Innovation and Employment within 23 working days of being paid.
If problems do occur…
If a rental problem occurs, the sooner the parties can talk about it the easier it can be to reach a resolution. If possible, try to keep communication open, and set realistic goals for reaching an agreement. If a mediator is required a Tenancy Tribunal application can be made by either the landlord or the tenant to the Tenancy Tribunal online.
For specialist advice, contact Christine Harding at Henderson Reeves
Christine Harding is a Legal Executive at Henderson Reeves lawyers. Her specialist areas are commercial, subdivisions, trusts and complex property transactions including farms. You can contact her on 09 430 4343.