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Providing accommodation to your farm staff?

Published: 17th August 2016

Author: Jacqui Owen, Allen Needham & Co Ltd

Published in: Rural e.Speaking | Issue #21

It’s not unknown for us to receive a shocked look from farmer clients when we advise them that they are subject to the Residential Tenancies Act 1986 regarding the accommodation they are providing to their staff.

These types of accommodation provisions are classed as ‘service tenancies’. They are largely subject to the same rules as any other residential tenancy with a few minor exceptions such as rent in advance and termination notices.

As an employer or farm owner, you must comply with the same standards as any other landlord and you can be subject to a Tenancy Tribunal hearing if you fail to comply.

What must you do?

The tenancy agreement must be in writing and there are compulsory clauses that need to be included.

For many of you this will form a part of the employment agreement you have in place, but it is important that you are not using an outdated agreement that doesn’t comply with the requirements of the Residential Tenancies Act 1986. As well, the Tenancy Tribunal has been vocal about its preference that the tenancy agreement is contained in a separate document, not as part of an employment or any other agreement.

There are many things that MUST be included in the tenancy agreement and we strongly advise you get us to review your draft agreement before presenting it to your staff.

New requirements for rental properties

As of 1 July 2016 there have been stricter standards imposed on landlords to ensure their rental properties are safer and warmer. There must now be smoke alarms installed that are regularly maintained and adequate in number. The property needs to be maintained to a safe and reasonable standard. This means that electrical outlets need to be working, broken windows must be repaired and plumbing systems must be in working order.

As well, there are new insulation requirements that take effect from 1 July 2019. These requirements differ throughout New Zealand; they are designed to help combat health issues associated with the cold, damp and mould commonly found in tenanted accommodation.

P-contamination

A significant area of concern we are seeing amongst farmer landlords relates to chemical contamination of their tenanted properties.

As a landlord you’re responsible to your tenant for any effect of methamphetamine (P) contamination in your property. You should actively monitor your property and test if required.

A recent Tenancy Tribunal decision[¹] noted that simply not knowing whether or not a property was contaminated is not enough to absolve you of liability to any future tenants. It can be a costly mistake to plead ignorance and the decision really places an onus on landlords to test between tenants and advise new tenants of the results.

We recommend that you test your property between tenants. You should also update the provisions in the tenancy agreement to enable you to recoup costs if you can show that through regular testing on the balance of probabilities, the contamination was caused by a particular tenant.

Insurance

We also recommend contacting your insurer to establish what steps are required for your landlord’s insurance to be effective. Some insurers will have requirements as to the frequency and form of property inspections before they will honour your policy. It pays to check that the steps you are taking will be sufficient should you ever need to make a claim.

The days of a farm assistant being placed into sub-standard accommodation are now over. The Tenancy Tribunal does not look favourably on farmers who plead ignorance to the requirements.

If you’re unsure about your obligations and responsibilities to your farm staff, or need guidance on tenancy agreements, do talk with us before you offer accommodation to your staff.

[¹] Visagie v Harper Property Management 15/06955/MK 16 March 2016

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