Opinion: RTA Changes Will Benefit Industry In Long-term
By Will Alexander
Recent amendments to the Residential Tenancies Act are, despite some media commentary, well-rounded and will benefit the industry in the long-term.
We have certainly all watched closely as the changes were fast-tracked through Parliament into law on August 12. There has been a comprehensive response from all the key stakeholders, including owners and tenants, with 4,787 submissions received since consultation began in 018.
There is no doubt these changes are quite significant, but we believe our industry will be better off. The RTA is there to protect owners and tenants, but some areas had become dated. This is understandable as it has been in place since 1986. A revision was necessary, but none of the amendments are any cause of concern.
We now have a more robust piece of legislation that meets our society’s contemporary requirements. At Property Brokers, we are optimistic about the amendments, and will be fully prepared and ready when the bulk of the changes take effect in February 2021.
Investors and tenants choosing to engage with professional property management agencies have nothing to worry about, as the legislation is more about lifting the overall standard to a level that we already operate at.
The only challenging aspect of the amendments is the timing, which has not been ideal. The industry is under a lot of pressure, having just worked to meet the Insulation Regulation 2016 deadline in July 2019, and now currently, to meet the Healthy Homes Standards by 01 July 2020.
So, what happens next? Here are the core changes to the Residential Tenancies Act, and when they will come into effect.
Phase 1: Law changes that took effect on (12 August 2020)
Transitional and emergency housing:Accommodation provided for these purposes, which is funded by the government or part of a special needs’ grants programme, is exempt from the Residential Tenancies Act.
Rent increases:Rent increases are limited to once every 12 months - a change from once every six months. There is currently a freeze on rent increases with none allowed until after 25 September 2020.
Phase 2: Law changes to take effect from 11 February 2021
Security of rental tenure: Landlords will not be able to end a periodic tenancy without cause by providing 90 days’ notice. New termination grounds will be available to landlords under a periodic tenancy and the required notice periods have changed.
Changes for fixed-term tenancies:All fixed-term tenancy agreements will convert to periodic tenancies at the end of the fixed-term unless the parties agree otherwise, the tenant gives a 28-day notice, or the landlord gives notice in accordance with the termination grounds for periodic tenancies.
Making minor changes:Tenants can ask to make changes to the property and landlords must not decline if the change is minor. Landlords must respond to a tenant’s request to make a change within 21 days.
Prohibitions on rental bidding:Rental properties cannot be advertised without a rental price listed, and landlords cannot invite or encourage tenants to bid on the rental (pay more than the advertised rent amount). This is common sense, and it should never happen in the first place.
Fibre broadband:Tenants can request to install fibre broadband, and landlords must agree if it can be installed at no cost to them, unless specific exemptions apply.
Privacy and access to justice:A suppression order can remove names and identifying details from published Tenancy Tribunal decisions if a party who has applied for a suppression order is wholly or substantially successful, or if this is in the interests of the parties and the public interest.
Assignment of tenancies:All requests to assign a tenancy must be considered. Landlords cannot decline unreasonably. If a residential tenancy agreement prohibits assignment, it is of no effect. The plenty of upsides here, and it will result in less vacancies. However, the requirement for this is low, and seldom do these requests come through. All assignees still need to meet the vetting requirement.
Landlord records:Not providing a tenancy agreement in writing will be an unlawful act and landlords will need to retain and provide new types of information. This will not affect Property Brokers as this standard practice for us.
Enforcement measures being strengthened:The Regulator (the Ministry of Business, Innovation and Employment) will have new measures to take action against parties who are not meeting their obligations. Professional Agencies already operate within the Act, and work to protect owners and tenants from compensation claims. We support more stringent penalties for people who choose to disregard the Act.
Changes to Tenancy Tribunal jurisdiction:The Tenancy Tribunal can hear cases and make awards up to $100,000, which is up from $50,000. Property Brokers supports more stringent penalties for those not adhering to the Act as we believe renting properties should be a seamless, enjoyable experience for everyone.
Phase 3: Law changes to take effect by 11 August 2021
Family violence:Tenants who are the victims of family violence will be able to withdraw from a fixed-term or periodic tenancy without financial penalty by giving two days’ notice and evidence of the family violence. If they are the only tenant, the tenancy will end.
Physical assault:If a tenant physically assaults the landlord, owner, or agent of the landlord, or family member of the landlord/owner, and the Police have laid a charge against the tenant, landlords can issue a 14 days' notice to terminate a fixed-term or periodic tenancy.
There is a significant amount of details in each of these changes. If you have any questions, concerns, or wish to seek for the clarity, please feel free to contact Will Alexander - General Manager of Property Management, or your property manager.
We will keep you up to date with progress from here. In the meantime, we are working diligently to assess each property for the Healthy Homes Standards, and you can expect reports, and certificates to come through over the next few months.
Will Alexander is Property Brokers’ General Manager – Property Management.