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Residential Tenancies Act 1986 Update: Retaliatory Notices, Letting Fees, and Healthy Homes Standards

5 July 2019

Retaliatory Notices

There have been a number of recent changes to the Residential Tenancies Act 1986 (RTA). For example, it is now unlawful for a landlord to end a tenancy where a tenant has exercised a lawful right under its tenancy agreement. Following receipt of a notice of termination, where the tenant believes that it has been issued in retaliation to an exercise of a lawful right, the tenant can apply within 28 days to the Tenancy Tribunal for an order that the notice was ”retaliatory.” 

Letting Fees

As many will have seen in the news, it is now unlawful for landlords (or their property managers) to charge tenants a letting fee at the start of a tenancy. Any costs for property managers must now be borne solely by the landlord.  The Tenancy Tribunal has the power to award exemplary damages of up to $1,000 against a landlord who charges such a letting fee. 

Healthy Homes Standards

There have also been significant changes to the RTA that are either already in force or will come into force shortly. All landlords should already know about the insulation requirements that they are required to have in place by 1 July 2019. These requirements include all landlords  to provide a statement on new tenancy agreements about the type, location, and the condition of the insulation in the rental home. 

The Tenancy Services’ Compliance and Investigations team (the “Team”) has stated they will not provide landlords with any extensions to the cut-off date to insulate. And, the Team has stated landlords having an insulation plan will not be enough to protect a landlord from financial penalties. From 1 July 2019, a landlord who has not installed ceiling and floor insulation where reasonably practicable will be in breach of the RTA and may face exemplary damages of up to $4,000 at the Tenancy Tribunal.

There are a few situations in which rental properties may not need to meet the insulation requirements by 1 July 2019:

  • Where the landlord intends to demolish or substantially renovate all or part of the property within 12 months of the start of a tenancy. In that case, the landlord must, if requested, provide evidence of having applied for the necessary building consent for the redevelopment or building work.
  • Where a property is purchased from and immediately rented back to the former owner-occupier, a 12-month exception will apply from the date of purchase.
  • Where the landlord can provide evidence that the insulation is still in reasonable condition and that when originally installed, it complied with particular insulation requirements.

The Healthy Homes Standards also come into force on 1 July 2019. These standards introduce new minimum insulation ratings and introduce other minimum requirements with the stated aim of enabling tenants to have easier access to warm, dry, and healthy rental homes.

Under the standards, landlords are to ensure their rental homes have:

  • fixed heating capable of achieving a minimum temperature
  • adequate ceiling and underfloor insulation (already compulsory from 1 July 2019)
  • sufficient ventilation in the living room, dining room, kitchen, and bathroom
  • efficient drainage, guttering, downpipes, and drains; and
  • reasonable blockage of any gaps or holes in walls, ceilings, windows, floors, and doors that cause noticeable draughts.

The date by which rental properties must comply with the healthy homes standards depends on the type of tenancy, and in most cases (other than boarding house tenancies and Housing New Zealand or community housing), the date will be within 90 days of any new or renewed tenancy after 1 July 2021. All rental homes must comply with the healthy homes standards from 1 July 2024.

However, with any new, varied, or renewed tenancy from 1 July 2019, landlords will need to include a statement of intent to comply with the healthy homes standard in the tenancy agreement. Further, landlords must retain the necessary documents and records to show compliance with the healthy homes standards that apply, or will apply, during the tenancy. 

While many landlords will have two years to comply with the standards (except in the case of insulation), we encourage our clients to start investigating what compliance work is needed for their properties. At Glaister Ennor, we work closely with property managers, consultants, and a variety of trades’ contractors. Therefore, we are able to assist you with ensuring your properties will be compliant with the standards. 

Should you wish to discuss the recent changes to the Residential Tenancies Act, please do not hesitate to contact Gaynor McLean (DDI: (09) 914 3528; g............@glaister.co.nz), Mitch Singh (DDI: (09) 969 1214; m..........@glaister.co.nz), or Paul Kim (DDI: (09) 913 2257; p.......@glaister.co.nz)