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Supporting Stable Tenancies - Ministry of Housing

Supporting Stable Tenancies

With more New Zealanders renting a home as a long term option, the Government wants to promote stable tenancies. Stable tenancies are a reflection of good relationships between landlords and tenants. Where there is a good relationship both parties win. For landlords this means a steady rental income and a well cared for asset; for tenants a secure, safe and well maintained home.

In response to issues raised by landlords and tenants, a practical package of new initiatives has been announced by the Minister of Housing, Steve Maharey, to help landlords further mitigate their business risk through the Residential Tenancies Act, and the tenancy service provided through the Ministry of Housing with the aim of promoting stable tenancies.

The package includes:

- Access to some government-held address information to trace Tenancy Tribunal Order debtors.

- A Work and Income package "Rent Help for Tenants in Difficulty" which includes new processes for tenants to access benefit redirection for rent and rent arrears.

- Investigation of improved access to Tenancy Tribunal decisions.

- More landlord education options offered through the Ministry of Housing.

The Minister has also indicated he will be looking at whether the regulatory framework provided by the Residential Tenancies Act needs updating.

New enforcement option

People with a Tenancy Tribunal Order to be enforced, that hasn't been complied with, will be able to get assistance through the Ministry of Housing to locate and access the address information for the person who the Order is against, if this is held. This new process involves searching address information held by some government departments. Any address information located would be released to the District Court for enforcement.

Options for tenants in rent arrears

New procedures will allow redirection of benefit to pay rent or rent arrears, as part of Work and Income's new "Rent Help for Tenants in Difficulty" package. This option is at the discretion of Work and Income case managers, where it is viable and appropriate in the mix of assistance that can be provided when there is difficulty with rent payments.

Access to Tenancy Tribunal decisions

The Minister of Housing has asked officials to investigate options for making Tribunal Orders more readily accessible to landlords and tenants. This information can be a useful tool in tenant or landlord-selection. Issues around privacy, security and cost are being investigated as part of this work.

More education options through the Ministry of Housing

The Ministry of Housing will be adding a new component to its education programme, aimed at improving outcomes for landlords by assisting them with developing and applying best practice to their tenant selection and business management processes. There will be more landlord seminars and a new "advanced' seminar focussed on the "how to' of property management.

Supporting Tenancies - Questions and Answers

Why are these changes happening?

With more New Zealanders renting a home as a long term option, the Government wants to promote stable tenancies. Stable tenancies are a reflection of good relationships between landlords and tenants. Where there is a good relationship both parties win. For landlords this means a steady rental income and a well cared for asset; for tenants a secure, safe and well maintained home.

These particular changes are largely in response to issues raised over a period of time, mainly by landlords wanting to sort out problems with tenants who get into rent arrears or cause damage to the property, and do not compensate their landlord accordingly.

They are also seek to promote stable tenancies, by ensuring that tenants who are having difficulty with rent payments have the information and support they need about assistance options available to them from Work and Income.

Where can I go to find out more, or for more help?

It depends on the initiative you are interested in and whether you are a landlord or tenant, or a creditor.

Tenants wanting to find out about Work and Income assistance that may be available need to contact Work and Income on 0800 559 009.

If you have a Tenancy Tribunal Order to enforce and have been unable to locate the debtor, you can visit the Tenancy Services website or call 0800 222 012 for advice on how to apply for address information to be searched.

If you want to find out about landlord seminars offered through the Ministry of Housing, and how you can learn more about good tenant selection and business management practices, you should keep an eye on the website, and local newspapers.

The new enforcement option

Why is address information released to the Court and not directly to the tenancy creditor?

The information can only be released for the purpose of enforcement and is requested on that basis. As the enforcement agency for Tenancy Tribunal decisions, the Department for Courts is the appropriate place for the information to be released to.

How long will it take for me to find out if an address match for the debtor has been located?

This is a brand new process, so this will depend in part on the level of demand. At this stage, the Ministry of Housing anticipates it will take up to 20 working days to confirm an address match.

How do I make a request for the release of address information?

There is a special application form to fill out. You can get this from the Ministry of Housing website (where there is also more information about how to apply) or by calling 0800 222 012. Tenancy Services offices and larger District Courts will also have the forms available. You will need to have a Tenancy Tribunal Order for enforcement and be able to provide other information about the debtor and steps already taken to enforce the Order.

The Tenancy Tribunal agreed my previous landlord owes me money - can I use this process?

Yes. The process works for tenants in just the same way as it does for landlords.

The Rent Help for Tenants in Difficulty package

My tenant is a beneficiary. How do I go about having their rent payments paid directly to me?

You can't. Access to benefit redirection is an issue for the tenant to discuss with Work and Income.

If your tenant is a beneficiary, who has got into rent arrears, and you have made a Tenancy Tribunal application against them because of this, they will receive information about how to get in touch with Work and Income in the mediation appointment letter they will be sent.

So how will the redirection process work?

Once a tenant indicates they would like to look at this assistance option, their Work and Income case manager will work with them to decide if it is an appropriate, viable option for them.

There is a formal application process for the tenant to work through.

At the start of the tenancy - helping with good tenant selection

Better landlord education

Selecting the best possible tenants for a rental property is a key component of a landlord's business risk management.

To help more landlords apply best practice to their initial tenant selection processes, the Ministry of Housing has been given additional resources to put in place a new component to its public education programme.

This means the Ministry will be offering:

- more education seminars specifically for landlords who are new to the market.

- an "advanced' landlord seminar covering the "how to' of running a successful property business.

- an increased focus in both seminars on good tenant selection and business management practices.

The advanced seminar will be developed and delivered in partnership with industry stakeholders and representatives of both landlord and tenant groups, with the goal of further raising the industry's professional standards.

Access to Tenancy Tribunal Orders

Access to information about previous tenancies held by prospective tenants is a valuable part of the suite of tools that can assist a landlord in selecting the best tenant for their property.

The public record of the Tenancy Tribunal contains information about Orders made by adjudicators against both tenants and landlords.

The Ministry of Housing and Department for Courts have been asked to look at ways this information could be made more readily accessible to landlords and tenants seeking guidance before entering into a tenancy. This work will address issues around this proposal, such as privacy, security of information and cost.

During the tenancy - new assistance with rent arrears

The Ministry of Housing has been working with the Ministry of Social Development to develop a fresh approach to assisting with rent arrears. The result of that work is the new "Rent help for Tenants in Difficulty" package. The major components of this Work and Income package are revamped procedures to access a range of financial assistance options, one of which is an option for the redirection of benefit to pay rent arrears and rent in certain circumstances.

The new procedures are designed to help get those tenants who are experiencing difficulty in paying their rent to talk to Work and Income as soon as possible about potential solutions to that issue.

How this initiative works

The initiative is aimed at informing tenants about a range of potential solutions to rent arrears. Currently, Tenancy Services sends a letter to both parties involved in a Tenancy Tribunal application, which gives details of the application and their mediation appointment time. When the application has been made against a tenant, the letter will now include information about the financial assistance that may be available to them through Work and Income, if they are having difficulty paying rent.

The options Work and Income will examine include:

- ensuring the tenant is receiving their full entitlement, including accommodation supplement.

- making an advance payment of benefit to cover part or all of the rent arrears.

- approving a redirection from the tenant's benefit where there is good cause for the arrears and rent to be paid directly (such as avoiding eviction).

Which option is the most viable depends on the individual circumstances of the tenant. Work and Income case managers will be responsible for deciding what will be the most appropriate mix of assistance they can provide.

Any tenant who seeks and receives such additional assistance, will receive written confirmation of this from Work and Income. They can then take this confirmation with them to their tenancy mediation or Tribunal hearing to feed into the dispute resolution process.

If the tenant is not granted any additional assistance from Work and Income, in many cases the mediator or adjudicator will be advised of this prior to the day of the mediation or hearing.

There is also a "second chance" option, if the tenant did not contact Work and Income prior to their mediation or hearing. The mediation or hearing can be temporarily suspended in order for the tenant to make contact with Work and Income, if the landlord agrees that it may lead to a viable settlement.

The rules around redirection have been clarified to ensure that it can be considered as an option where the tenancy is at risk. Redirecting payments will continue to be at the discretion of Work and Income Case Managers and the beneficiary. Allowing beneficiaries to access this method of payment has the potential to give their landlords a higher degree of confidence that their rent will be paid. However, in the context of settling the dispute, landlords do not have to accept redirection, even if Work and Income have approved it.

If redirection has been approved, and the landlord accepts the option as part of a settlement, the landlord will have to provide bank details on a MSD Redirection of Benefit Payment form. The details of the mediated settlement, or the adjudicated order will then incorporate the options that have been agreed to by the landlord and the tenant.

Granting redirection

There are some constraints around the circumstances under which redirection of benefit will be granted. As a voluntary process, the tenant cannot be ordered to request redirection and should redirection be granted, the tenant has the right to stop the payments at any time. Should that happen, the Tenancy Tribunal Order would be able to be enforced in the same way as any other breached Order is currently enforced.

The Government hopes this strengthened option to assist tenants when they are having trouble meeting rent payments and falling into rent arrears will be an important in contributing to longer-term, more sustainable tenancies.

The end of the tenancy - new assistance with enforcing Tenancy Tribunal Orders

The Minister of Housing has announced the Government intends amending the Residential Tenancies Act (RTA) to provide an improved enforcement option for Tenancy Tribunal Orders.

This will allow tenancy creditors to request the release of some government-held address information to the Department for Courts, for the purposes of enforcing a Tenancy Tribunal Order, when creditors are unable to locate the debtor.

The Government has also signalled their intention to investigate other ways of improving the civil enforcement system as a separate initiative.

Current enforcement options

Sometimes tenancies can result in disputes. Tenancy Services, a division of the Ministry of Housing, encourages landlords and tenants to use the dispute resolution process it provides under the RTA. This involves providing a mediation service aimed at resolving disputes out of Court, and for those disputes that are not mediated or otherwise resolved, recourse to the Tenancy Tribunal for adjudication. Tenancy Tribunal orders and sealed mediated orders are deemed to be orders of the District Court, and can therefore be enforced by the Department for Courts.

Creditors have a choice of how they go about recovering the debt. They can enforce through the Court or through a private credit agency. Court enforcement costs can be added to the outstanding judgement debt. However, the current civil enforcement system requires an up-to-date address for the personal service of enforcement documents. It can be difficult to obtain a valid address for service, and creditors are then unable to enforce their Tenancy Tribunal Order through the Court system.

The interim process

An interim process has been set up for creditors to apply for address information for the enforcement of their Tenancy Tribunal orders. This will assist many creditors who have been unable to proceed with enforcement action.

If the current address is held by either the Ministry of Housing's Tenancy Services division or the Ministry of Social Development, it can be passed on to the District Court, who will manage the enforcement process.

Creditors, who have been unable to locate their debtors for the purpose of enforcement, will need to complete a Request for address information form to access the process. This form can be downloaded from the Tenancy Services website, or by calling 0800 222 012. Tenancy Services offices throughout the country and larger District Courts will also have these forms.

How the new Request for address information process will work

- Creditors will need to provide information about themselves, their debtor, and what action has been taken so far.

- Creditors will need to provide a copy of their Tenancy Tribunal Order, as well as any information about the debtor that would be useful when it comes to establishing a match. For example, a bond number for the tenancy that resulted in the dispute will assist Tenancy Services to establish the debtor's identity.

- Creditors will also need to say what actions they have already taken to try to locate their debtor.

If a new address is located...

- If the creditor has already applied for Court enforcement, and a new address is located for the debtor, the creditor will get a letter telling them that their request was successful. The address information will be sent directly to the District Court so that the Order can be enforced.

- If the creditor has yet to apply for Court enforcement, the creditor will receive a letter telling them the information has been sent to the District Court, and that they will need to apply for enforcement within a month. This time limit is so the Court can be reasonably confident the information is still valid.

If no new address is located...

- The creditor will receive a letter advising that the Ministry of Housing and Ministry of Social Development were unable to locate, verify or release a new address for the debtor. This could be for a number of reasons, such as the address not being held by either agency, or for privacy considerations, such as when there is a protection order in place.

The District Court's enforcement processes will operate as before.

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