Renting an Airbnb property out for more than 90 days has consequences under New Zealand’s Residential Tenancies Act, leading to hefty fines.
After 90 days, any tenancy will automatically fall under the Residential Tenancies Act (RTA). You won’t be able to end the tenancy on a specific date, and you will need to abide by all the terms of the Act.
Many Airbnb property owners have been hit hard by the Covid-19 pandemic, which has led to drastically less tourism and restricted movement within New Zealand. Renting your property out for a longer term may be appealing in the present climate, but it’s important you understand all your responsibilities before you move to longer-term lets.
You Can’t Contract Out of the RTA
Landlords can’t use short-term booking sites such as Airbnb to contract out of the RTA. Once a property is let for 90 days, it automatically falls under the Act. It’s entirely possible some AirBnB hosts will not be aware of their responsibilities under the Act, but they will still be liable and could face heavy fines.
Responsibilities under the RTA
Under the RTA, landlords must:
- Ensure their property is in a reasonable condition
- Allow the tenant quiet enjoyment of their property
- Be sure to meet building and health and safety standards
- Handle abandoned goods in the right way
- Let the tenant know if the property is for sale
- Engage an agent if they are out of New Zealand for more than 21 days
You cannot simply end a tenancy on a specific date, and rental terminations can only end tenancies on specific grounds. Understanding your responsibilities under the Healthy Homes Act is also imperative to ensure you don’t face fines.
Consequences of Not Complying
New tenancy laws came into effect in New Zealand earlier this year, offering protection for renters but more restrictions for landlords. Not complying with tenancy law and healthy homes legislation could lead to hefty fines. For example, a landlord was ordered to pay $16,000 earlier this year for renting out a property that was considered dangerous and uninhabitable.
Crockers Property Management has advised all its clients to ensure their properties meet Healthy Homes requirements or prepare for the consequences of not complying with the Healthy Homes Act. Landlords of properties that do not comply face penalties of up to $4,000.
A warm, dry, compliant property is also likely to attract good tenants who will stay longer. If properties are not brought up to the required standard, not only will landlords be liable for large fines, but issues must be remedied quickly, which may be costly.
Does my Property Fall Under the RTA?
Even if you intend to let your property out for fewer than 90 days, it may still fall under the RTA. One Airbnb operator took a cautionary approach earlier this year, contacting the Tenancy Tribunal to inquire whether their beach house was excluded from the RTA.
While the Tribunal concluded that on the evidence presented, the property would likely be excluded at present, this did not mean every subsequent use of the house would automatically be excluded. The adjudicator K Lash stated: “for example, the nature of a particular arrangement may create a situation where the parties implicitly contract into the RTA by their circumstances.” This could happen if the intention was unclear between the parties as to the length or nature of the stay.
While the Covid-19 pandemic has forced some Airbnb operators to reassess the viability of providing short-term accommodation, it is imperative that operators familiarize themselves with New Zealand tenancy laws before offering longer-term lets.
Tenancy law may appear complex, but understanding your responsibilities under the RTA will ensure you don’t face fines imposed by the Tenancy Tribunal or be ordered to remedy issues under urgent time pressure.