Residential Tenancies Act 2019: What You Need to Know

The New Zealand property rental market has undergone significant changes this August, as the Residential Tenancies Act of 2019 takes effect. The new law implements a variety of changes for landlords and tenants alike that will change the property rental landscape significantly.

With major changes concerning damage liability, insurance, contamination, and more, implementation of the Residential Tenancies Act 2019 means that existing landlords and tenants must re-evaluate their relationships to one another. Overall, these changes should improve the level of accountability in the renting market and provide updated protections for renters and tenants alike.

So, what do these new laws mean for you and your rental situation? Read on.

What is the Residential Tenancies Act 2019?

The Residential Tenancies Act of 2019 was granted Royal assent on 30 July 2019. The bill was designed to address issues relating to damage liability in rental properties. The law limits tenants’ liability for damage done to residential properties that are deemed “careless”, empowering Tenancy Services to take legal action against landlords who rent noncompliant properties.

The law also gives the Tenancy Tribunal jurisdiction over properties that are being used as rentals but do not meet the standards set for residential purposes. These could include garages or sleep-outs contractually leased as residential rentals. Finally, the law allows for regulations to address contamination testing and management of residential properties, for methamphetamines and other contaminants.

What does the Residential Tenancies Act 2019 mean for landlords?

If you are a property owner leasing property to tenants, you should expect stricter regulations regarding methamphetamine testing to be passed soon. The new law allows you to test for meth in your rented properties if you give your tenants at least 48 hours’ notice. If your property is a boarding house room, you need only provide 24 hours’ notice.

Tenants may also now rely more heavily on your property insurance, meaning that landlords will need to shoulder more of the repair costs for damage done by tenants. Additionally, landlords will now need to provide their insurance details to their tenants.

What does the Residential Tenancies Act 2019 mean for tenants?

As a tenant, you have less liability if you cause damage to your space. This update is a result of a controversial 2016 ruling in the case of Holler V Osaki, which essentially stated that landlords could not impose the cost of damage repairs on their tenants if the landlord’s insurance would cover them.

However, the Residential Tenancies Act 2019 also states that the tenant becomes liable if the damage done to the property is greater than either four weeks’ worth of rent or the landlord’s insurance excess, whichever is lower. Also, if you are renting a garage or a sleepout as a residential space, you can finally benefit from the protection of the Tenancy Tribunal and be treated the same, legally, as you would be if you were renting any normal apartment or home.

Make sense of a changing rental landscape

The world of property law is constantly changing, with new laws always in the works to balance the responsibilities and protections of tenants and landlords alike. If you are a landlord in New Zealand, it pays to have the experience of professional property management in your corner. Udy Realty boasts extensive local knowledge and a company-wide focus on exceptional customer service. Contact Udy Realty today to learn more about how these new laws will affect you.