REINZ warns landlords and property managers
Following the Residential Tenancies Act (RTA) Number 2 Bill receiving Royal Assent last week, the Real Estate Institute of New Zealand (REINZ) is warning landlords and property managers that they now have less than three weeks before they’ll need to communicate insurance details for any new tenancies in order to be compliant with the new legislation.
Under the changes to the RTA, if a tenant causes intentional damage to a property then they are now responsible for paying either four weeks rent or the landlord’s insurance excess (whichever figure is less) to cover the damage. For tenants to understand just how much they would need to pay in the event of damage, landlords now need to provide their insurance information, including the excess details, to new tenants from 27 August 2019. Landlords also needs to inform tenants that a copy of their insurance policy is available on request.
Bindi Norwell, Chief Executive at REINZ says: “Landlords now have less than three weeks to ensure they have communicated their insurance details in writing to any new tenants and if they don’t then they may be faced with a financial penalty of up to $500. While not as punitive as the insulation penalties, the last thing landlords will want is to be fined for not communicating their insurance details to new tenants.”
Also outlined in the changes to the RTA, the legislation states that for existing tenancies, insurance information must be provided within a “reasonable” time. However, no details have been given as to what that timeframe is.
“We have no idea at this point as to what would constitute a ‘reasonable’ timeframe,” says Norwell. “However, we will be working with MBIE over the coming weeks to try and get some clarification on that so we can communicate those details with property managers and landlords around the country to ensure they are not in breach of the Act,” says Norwell.
“Under the changes to the Act, tenants also need to be advised if a property isn’t insured, as tenants will still be liable for four weeks rent if they cause intentional damage,” says Norwell. “Additionally, if landlords make any changes to their insurance policies then they need to notify these changes to tenants in writing,” continues Norwell.
“One thing tenants need to be aware of, is that if they invite guests to their property for example, to a party, and the guests cause damage to the property, then as tenants they are responsible for paying to fix the damage – not the landlord,” concludes Norwell.
REINZ will be working with its property management members over the coming weeks to ensure they are ready by the deadline on 27 August.