The revised Residential Tenancies Act (RTA) tidied up several grey areas in property law, and made it clearer how landlords and tenants should operate.
There were more than 100 amendments to the 1986 Act, and almost 80 per cent of them impact on property management. If breaches are proved, there are also plenty of fines to hand out.
The RTA outlines new unlawful acts for landlords and tenants, and sets out maximum awards of punitive damages.
The 1986 Act listed 14 unlawful acts landlords might commit, and just two for tenants. Now, it's more balanced - 22 unlawful acts for landlords and 11 for tenants.
The landlord, for instance, commits an unlawful act if the property is not rented out in a clean and tidy condition. The breach comes with a $3000 maximum exemplary damages tariff, which goes to the tenant.
Renting out a non-complying building can also cost the landlord $3000. If the water supply is not reticulated, then the landlord must provide an adequate means of storage, such as a water tank, or face a $3000 maximum damages claim. These damages are on top of any costs required to rectify the situation.
On the tenant's side, interference with any fire escape device comes with $3000 maximum exemplary damages, payable to the landlord. This includes removing batteries from a smoke alarm, covering a sensor, blocking fire escapes or nailing up doors or windows.
Tenants face exemplary damages of $1000 for failing to leave at the end of the tenancy. Using premises for an unlawful purpose, such as drug manufacture, attracts a $1000 damages payment, and harassing other tenants or neighbours can cost the tenant a maximum of $2000 in exemplary damages.
There are also $1000 fines for abandoning a rented property with rent in arrears, and for overcrowding.
In other changes, a landlord leaving New Zealand for 21 consecutive days must appoint an agent, inform the tenant, and change the bond over to the agent's name. This is in response to the situation of some overseas landlords having no official representative in New Zealand.
Failure to do this carries a $1000 penalty.
Landlords now have the right to increase rent after carrying out substantial improvements to a tenanted property, regardless of any other rent increase in the previous 180 days.
Such improvements include insulation, heat pumps, an extra bedroom, new kitchen or bathroom. It can also cover external improvements, such as sealing a gravel driveway.
Landlords can also decrease the rent temporarily as compensation, for say, subdivision work and related building activity.
This could be an acknowledgment of the breach of quiet enjoyment, and the rent can go back up at the completion of the work without being deemed to be an official rent increase. Changes to body corporate rules in an apartment building can also lead to rent decreases.
Tenants can ask for a market rent assessment to take account of changes that decrease their benefits, such as the closure of an in-house gym.
The 42-day notice for the tenant to vacate on the basis that the owner needs the property has been redrafted.
The test is whether the owner has made it his/her home, and this will require the owner to move in furniture, for example.
Guarantors are also now an official part of residential tenancy security, with a third party responsible for the tenant's debts.
The Tenancy Tribunal now has powers to deal with squatters, and tenants can give notice to terminate the rental agreement in the event of a mortgagee sale.
The New Zealand Property Investors' Federation sent out an updated fact sheet to its members and has prepared a letter that landlords should hand to their tenants. Dan Keller, president of the Tauranga Property Investors Association, said if tenants are aware of the changes, there's a better chance they won't break tenancy agreements.
How you can be fined For tenants:
* $1000 for failing to leave a property at the end of the tenancy, and for moving out without telling the landlord and not having a reasonable excuse.
* $1000 for giving the rental property to a new tenant without the landlord's written consent.
* $1000 for allowing others to use the rental property for an unlawful purpose, and for having more people living in the property than allowed.
* $2000 for harassing other tenants or neighbours.
For landlords:
* $1000 for interfering with supply of services to premises.
* $1000 or less for failing to appoint an agent when they are outside New Zealand for longer than three weeks.
For both:
* A landlord or tenant who changes the locks on the property without the permission of the other party may have to pay up to $1000.
The new Residential Tenancies Act came into force on October 1 last year.