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  • Greater protection for tenants under new RTA bill

    From the APIA Newsletter this week:

    The Residential Tenancies Act (RTA) amendment bill introduced to Parliament today will give greater protection to vulnerable tenants and; help both landlords and tenants to understand and enforce their respective rights, according to Building and Construction Minister Shane Jones.
    The existing Residential Tenancies Act 1986 does not provide adequate protection to those living in boarding houses and some rented retirement accommodation where meals or cleaning services are provided.
    Amendments proposed in the new bill will give that protection. Boarding houses with six or more tenants will become subject to the Act, as will some rented retirement accommodation.
    Another key proposal will introduce sanctions for landlords who fail to meet their maintenance responsibilities. Landlords will also be able to seek damages for some tenant breaches.
    Both landlords and tenants will benefit from improved clarity around rights and obligations, and from improved dispute resolution and enforcement processes.
    “It’s over 20 years since the original Act came into force. In that time there have been significant changes to the nature and scale of the residential rental market," Mr Jones said.
    “The number of people renting has increased as has the diversity of those renting with an increasing proportion of family households and older people renting.
    “The increasing popularity of property as an investment has also seen a significant increase in the size of the private rental sector.
    “These changes mean it’s essential we achieve an appropriate balance between landlords’ and tenants’ rights and obligations, because the bigger the rental market gets, the bigger its social and economic impact.


    In summary, the Bill:
    • extends of the Residential Tenancy Act’s coverage to boarding houses and to some rented accommodation where services such as meals or cleaning are provided
    • increases the monetary jurisdiction of the Tenancy Tribunal and penalties for breaches of the Act
    • increases the enforceability of Tenancy Tribunal orders by, for example, enabling a party to recover private debt collection costs
    • limits tenant liability for damage to their rental premises to four weeks’ rent if the Tenancy Tribunal is satisfied that the tenant neither caused the damage intentionally or recklessly, nor intentionally or recklessly encouraged or permitted another person to damage the premises
    • retains incentives for tenants to look after the premises
    • clarifies responsibility for outgoings such as rates, insurance and water use
    • allows for tenant breaches, such as sub-letting without consent, over-populating the premises or becoming a problem neighbour, to be subject to exemplary damages, as an alternative to eviction
    • clarifies the status of body corporate rules, with remedies for tenants if body corporate rules change during a tenancy
    • prohibits tenants being charged ‘letting fees’

    Will new bill correct anti-landlord bias?


    “Landlords seek tenancy legislation which is balanced and commonsense law”, said Martin Evans, President of the NZ Property Investors’ Federation, today. “Currently the RTA is skewed and has an anti-landlord bias so we welcome the long awaited Bill.”

    He said members welcome the suggestion that debt collections costs can be added to awards as this may help reduce the extremely high incidence of rent arrears. It is also considered a good move to introduce exemplary damages for tenants sub-letting, over-populating the premises or becoming a problem neighbour, as this will lead to longer tenancies and better communities.
    “It is pleasing to see that no mention has been made of allowing advocates in Tenancy Tribunal Hearings,” said Mr Evans. “This could have led to a lack of justice for rental property providers, potentially leading to a significant reduction in the supply of rental property.”

    Residential tenancy issues are critical for all property investors, especially, for example, in areas such as the responsibility of tenants for utility charges.
    “Our members are looking forward to new legislation reaffirming the 2003 District Court decision ruling that tenants are liable for all relevant water charges’, said Mr Evans.

    As the industry body representing 7,330 members, the NZ Property Investors’ Federation will be opposing vigorously the draft legislation limiting tenant damages to four weeks. This does not send the right message to tenants and merely passes responsibility of looking after the property from the tenant to the landlord.
    The Federation also maintains that the amount represented by this time period is insufficient to replace items such as carpets and curtains. On the other hand, they will be supporting the inclusion of relevant corporate body rules into tenancy agreements.
    “This is a golden opportunity for all landlords to make their views known” said Mr Evans. “ NZPIF will be helping to distribute the draft legislation to all its members and encourages all residential property investor landlords to study the draft legislation and tell the Government about areas that they believe need more work to get right.”.
    DFTBA

  • #2
    limits tenant liability for damage to their rental premises to four weeks’ rent if the Tenancy Tribunal is satisfied that the tenant neither caused the damage intentionally or recklessly, nor intentionally or recklessly encouraged or permitted another person to damage the premises
    This is the most frightening of the changes. It requires little more than a vaguely plausible "It wasn't me and I don't know who it was" for the tenant to evade the costs. How can a tribunal ever rule otherwise in the face of a denial of any knowledge?
    prohibits tenants being charged ‘letting fees’
    Does this mean that PM's are planning to charge Landlords letting fees now? I noticed a clause in a friends property management agreement that said something like; "We reserve the right to charge the landlord a letting fee and recover the cost from the tenant". Clearly, they have got wind of this proposal and are proactively signing landlords up for it.
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    • #3
      $3,000 fine

      Now, does the owner get copped for this or the PM (landlord) if the rental fails to meet the required standards?
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      • #4
        It has to be the owner.

        If the owner has enaged a property manager, then the owner can make a contract claim against the property manager - but the owner has to be the person responsible for payment of the fine.

        PS - As to who the "landlord" might be, isn't it always the owner? The property manager (if any) is merely the landlord's agent.

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        • #5
          Does
          give greater protection to vulnerable tenants
          actually mean ALL tenants?

          When are specifics going to be released?

          Although in a roundabout kind of way I feel it doesn't really matter what legislation there is, and that tenants will ultimately end up paying the price of government intervention. Higher costs and stricter regulation = less landlords ad higher rents.

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          • #6
            The fine details got published just before the long weekend.
            I bet this was done to avoid it getting a roasting in the media.
            By the time the jurnos get back from their holidays the news release will be out of date and headlines will be full of murders and green rubbish.

            You can look at all the details on this link.

            http://www.legislation.govt.nz/bill/government/2007/0217-1/latest/DLM1336713.html

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            • #7
              Thanks for the link Glenn. I enjoy light reading.

              Well, 98% of what's written is for the sole benefit of our poor vulnerable tenants. I bet they gave landlords a small amount of crappy benefits so they can make feel-good statements like "this new legislation will provide benefits for both parties..."

              It looks they've made a big enough stick with these amendments to smack some small time "ma and pa" investors/landlords out of property investment altogether.

              They'll be leaving because we'll start seeing news headlines of landlords fined for breaches, the media will be sure to whip it up into a frenzy and some of the "ma and pa" investors will return to stocks and funds, right where the govt wants them.

              Although I suspect in the end, landlords will be more cautious, some will throw in the towel, it will be harder for marginal tenants to find accommodation, and rents will increase even further.

              Originally posted by Glenn View Post
              The fine details got published just before the long weekend.
              I bet this was done to avoid it getting a roasting in the media.
              By the time the jurnos get back from their holidays the news release will be out of date and headlines will be full of murders and green rubbish.

              You can look at all the details on this link.

              http://www.legislation.govt.nz/bill/government/2007/0217-1/latest/DLM1336713.html

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              • #8
                Originally posted by spurner View Post
                Thanks for the link Glenn. I enjoy light reading.

                .
                Holy smoke have you been up all night with the "light" on reading this "stuff".

                What it is doing is compensating the poor hard done MREINZ PM's who are suffering at the nasty hand of the over wieght labour politicians.
                Now that the male politicians and the females ones who have too much totestorone can no longer use physical punishments on their partners and babies they have to have an outlet for their physical urges.

                It will push more people towards PM's and this will bring more business to the poor disadvantaged real estate agents.

                Oh big brother is so kind. Long live big brother.

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                • #9
                  Just read the summaries of all the changes (still, quite long), not every statute! There are some basic common sense amendments, some which are unlikely to affect 99% of people, some which are likely to catch landlords out, and some which are pretty silly.

                  A common sense one: When landlord provides 42 days notice to vacate because a member of their family is moving in, this now applies only to owners of the said property, and not their agents or landlords.

                  A silly one: Unless owners of a boarding house live within the boarding house, they are not entitled to use the communal facilities there. So, by going to your property to do work/ see some tenants - you are not allowed to make yourself a cup of coffee, and are not even allowed to take a pee in your own toilet, without breaching the act now.

                  Another: If an owner is overseas for more than 21 days they have to write all their tenants advising of the contact person. What if you only go away 20 days, is it reasonable for tenants to have no contact with you for all this time? And what is wrong with a message on your telephone advising who the contact person is, or diverting your calls to the contact person? What if you are just in Australia and use roaming and can easily deal with any tenant enquiries, why do you need to appoint a contact person locally?

                  Even the statutes which are supposed to benefit landlords such as damages for breaches of the act by tenants, may infact work against landlords. When a tenant overcrowds a property or makes breaches, they may be given a small fine rather than evicted, which is what the landlord might really be after.

                  There are many many tricky clauses in there. Like I said before I read this, if it (the RTA) isn't broken, then why fix it...

                  Originally posted by Glenn View Post
                  Holy smoke have you been up all night with the "light" on reading this "stuff".

                  What it is doing is compensating the poor hard done MREINZ PM's who are suffering at the nasty hand of the over wieght labour politicians.
                  Now that the male politicians and the females ones who have too much totestorone can no longer use physical punishments on their partners and babies they have to have an outlet for their physical urges.

                  It will push more people towards PM's and this will bring more business to the poor disadvantaged real estate agents.

                  Oh big brother is so kind. Long live big brother.

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                  • #10
                    What Would National Do?

                    Does anyone plan to canvass the other lot to see what
                    they'd do to this piece of further social engineering by
                    the present W'gton Comrade Commissariat?

                    Or maybe they have a known stance, already?

                    (2A) The parties may not enter into a fixed-term tenancy
                    of not more than 90 days for the purpose of using that
                    tenancy as a trial-period for ascertaining the desirability
                    of extending or renewing the tenancy.
                    I have had one tenant leave, making use of the initial
                    4 week FTT, saying they had made a hasty decision and
                    were glad that they had the 4 week FTT option.

                    Conversely, I have never declined to renew an initial
                    4 week FTT, over the years.

                    What is it with these airheads and drongoes that pass
                    themselves off as wooden-headed politicians?
                    Last edited by Perry; 25-10-2008, 08:37 PM. Reason: clarification
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                    • #11
                      (2A) The parties may not enter into a fixed-term tenancy
                      of not more than 90 days for
                      Dont you love the English.
                      Why not just say fixed term tenancies less than 90 days are not permitted.

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                      • #12
                        Because "The parties may not enter into a fixed-term tenancy of not more than 90 days" is not equivalent to "fixed-term tenancies less than 90 days are not permitted".

                        The latter, but not the former, allows for a FTT of 90 days for the purposes of a trial period.

                        The proposed new wording means that 91 days is the minimum FT trial period.

                        Paul.

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                        • #13
                          Originally posted by SuperDad View Post
                          Because "The parties may not enter into a fixed-term tenancy of not more than 90 days" is not equivalent to "fixed-term tenancies less than 90 days are not permitted".

                          The latter, but not the former, allows for a FTT of 90 days for the purposes of a trial period.

                          The proposed new wording means that 91 days is the minimum FT trial period.

                          Paul.
                          So you are surely not suggesting that if one had a FT of 90 days it is not permitted to renew it.
                          What if the landlord did not say that the initial period was a trial.
                          Surely all FT tenancies are trials and renewing or not is almost always an issue of the LL and the tenant liking each other and the property.
                          What a pigs breakfast to determine the right or wrong of a tenancy is based on intent or what might have been in the landlords mind at the start of the tenancy.
                          I suppose the Govt will have to set up a new branch of the police called the "thought Police unit" to go around checking our minds from time to time to make sure we are not thinking bad or devious things.

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                          • #14
                            Whatever happened to the poster who called him/her self The Police?
                            "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

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                            • #15
                              Originally posted by Glenn View Post
                              I suppose the Govt will have to set up a new branch of the police called the "thought Police unit" to go around checking our minds from time to time to make sure we are not thinking bad or devious things.
                              Just borrow the IRD's ones.

                              Tell me sir, what was your intention when purchasing that property?
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