Proposed changes to the Residential Tenancies Act 1986

On the 27th August 2018 the Ministry of Business Innovation and Employment (MBIE) released its discussion document about the proposed reform of the Residential Tenancies Act 1986 (RTA).

The current state of the market means that for many Kiwis, home ownership is out of reach and a lifetime of renting is a reality

While a number of changes have taken place with the RTA, with the most recent being the introduction of smoke alarms and insulation requirements, there are still some significant changes in the wings. 

These are:

• Improving the security and stability of tenure for tenants, while maintaining adequate protection of landlords’ interests 
• Ensuring the law appropriately balances the rights and responsibilities of tenants and landlords to promote good faith tenancy relationships and help renters feel more at home 
• Modernising the law so it can appropriately respond to changing trends in the rental market 
• Improving the quality standards of boarding houses and the accountability of boarding house landlords

MBIE is seeking feedback and consultation on these issues. The consultation questions related to:

• Terminating a tenancy;
• Tenancy agreements;
• Tenant and landlord responsibilities;
• Alterations to property;
• Pets in rental properties;
• Letting and rental increases;
• Boarding houses;
• Enforcement of legislation.

Of these topics, some proposed changes could make it difficult for buyers, sellers, investors and real estate professionals.  The notice period required to notify a tenant when a house sells or an investor needs the property back. is currently 42 days.  The proposed change is to increase 42 days to 90 days.  This would make it difficult for buyers who purchase their first home having to wait three months before a home can settle. An investor who has to sell a property, may also not be able to wait three months for settlement to occur.

Further to this, a suggestion has been made to provide greater security for tenants by having a minimum of one year for a fixed term tenancy.  This may not suit some tenants who require a property for a shorter period or investors who make their properties available for shorter periods.  

You can read the full consultation document here.

It is important to provide feedback to MBIE on the proposed changes. Feedback is requested by 5pm on Sunday, 21 October 2018.