Landlords and tenants need to understand and comply with various legal obligations set out in the Residential Tenancies Act 1986 and the recent changes introduced by the Residential Tenancies Amendment Act 2020.
The Residential Tenancies Amendment Act 2020 was introduced with phased implementation but is now entirely in force (as of 11 February 2021).
Critical changes from this amendment act
- Rent can only be increased once in 12 months from the date of the tenancy agreements,
- Landlords cannot unreasonably withhold consent from the tenant for renovations, fixtures or alterations,
- Amendments to termination provisions and,
- Fixed-term to periodic reversion.
Previously during a periodic tenancy, landlords could give 42 days written notice if the property has been sold or the owner/their family wants to live at the property.
Under the current rule, landlords must give written notice of 90 days if the property has been sold and 63 days if the owner/their family wants to move into the property.
FIXED-TERM & PERIODIC TENANCY
Before: Fixed-term tenancies automatically reverted to periodic tenancies unless the landlord served notice of their intent to end the tenancy.
Notice needed to be served between 21-90 days before the fixed term ends.
Now: Fixed-term tenancies automatically revert to periodic tenancies, and only tenants may unilaterally terminate the periodic tenancy by giving 28 days’ notice.
Landlords can only otherwise terminate in very limited circumstances.
The new provisions are very tenant-friendly. There is no longer a timeframe for when both parties agree not to continue with the tenancy.
Parties can, however, agree at the start of the tenancy for particular provisions to be included in their agreement. For example, they could agree outright not to continue with the tenancy beyond their current lease expiry date.
A clause such as this in the tenancy agreement would provide more certainty for landlords who wish to have a set timeframe placed on their tenancy. If you’d like advice on this or other changes to your agreement, please get in touch today.
FOR MORE INFORMATION
For legal advice on updating your tenancy agreements, please contact Wellington’s leading property law experts on 04 472 0020.
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