Affecting both landlords and tenants
The Residential Tenancies Amendment Act 2019 came into force on 27 August 2019. This legislation affects both landlords and tenants in a number of ways including limiting a tenant’s liability for careless damage in rental properties, and how methamphetamine (meth) contamination of rental properties is to be tested and managed. Landlords are also now required to provide a statement in the tenancy agreement about the property’s insurance.
Damage to rental properties
The legislation is designed to encourage tenants (and their guests) to look after the property they rent, and for landlords not to be out-of-pocket for careless or intentional damage by their tenants.
As a landlord, you cannot hold your tenant liable for any fair wear and tear to your rental property or your chattels. However, your tenant is liable if you can show that the destruction or damage was:
• Intentionally caused by your tenant (or their guests)
• The result of your tenant doing something illegal which could result in them going to prison, such as making meth, or
• The result of your tenant doing something careless, such as cooking while intoxicated.
If your tenant is liable for the damage to your rental, their liability is limited to the lesser of:
• The excess of your property insurance or
• The equivalent of four weeks’ rent.
Unfortunately, you will have to wear the difference if your actual costs to repair the damage are greater than what your tenant must pay.
The new legislation allows for landlords to test for meth contamination in rental properties whilst their tenants are living there.
You must give 48 hours’ notice to your tenants before entering your property, and you must tell your tenants that you are testing for meth contamination. You are also required to share the test results with your tenant within seven days of receiving them.
Still to come are the regulations that will detail the level of meth contamination that is acceptable, the processes for testing for meth and decontamination of a property.
There is more detail about meth contamination in rental properties here.
Landlords must now provide a statement with any new tenancy agreement stating whether the property is insured and providing the insurance excess amount for that policy or policies. If you don’t provide this information, or don’t tell your tenants of any insurance changes, you could be fined up to $500.
Tenants on existing tenancies (pre-27 August 2019) can ask for your property’s insurance information, and you must provide this within a reasonable timeframe.
The new legislation also clarifies obligations about letting ‘unlawful residential premises’. This is a place used for the occupation for a person but that place cannot lawfully be occupied for residential purposes, or where a landlord has failed to comply with their obligations under the Residential Tenancies Act.
An example of ‘unlawful residential premises’ is where a landlord has let a property that does not comply with the Healthy Homes Standards.
Tenants in unlawful residential premises may terminate their tenancy with only two days’ notice.
If you let unlawful residential premises to a tenant and your tenant falls into rent arrears, unless there are special circumstances, the Tenancy Tribunal cannot order your tenant to repay those arrears. In addition to this the tribunal may order you to:
1. Reimburse your tenant for any or all rent they have paid while the premises are unlawful
2. Complete work on the premises and/or
3. Terminate the tenancy.
The new legislation has been in force for more than two months, and all landlords and tenants should now be aware of their obligations and responsibilities. If you would like to know more, click here. If you would like more detailed information, please don’t hesitate to contact our firm.