RTA Amendments of 2016

22nd September 2016 | By: Dave Smyth

A lot has been written about the new law that has been passed. MBIE will talk about it at our next meeting. They might even mention about some things that should have been included in the amendment such at the Meth contamination isues and the Osaki case that is letting tenants get away with blue murder.

In writing this newsletter I have spent a wet Saturday morning reading the difficult to understand 2016 amendments to the RTA. In the past the writers attempted to make the RTA reasonably easy for a layman to understand. Not that the judiciary and I always agreed on what it means. Well in my opinion such well-meaning intent to write clear plain English has been abandoned. To complicate matters for the first time the law writers have produced both an amendment and a set of regulations. The complete amended RTA is available on line which sort of helps to understand things but it is easier to work out what has changed by first reading the amendment to the act.

As everyone should know the main issue is we now have to provide insulation to ceilings and floors. The regulations go into detail about this and provide for some complicated descriptions of your obligations. This obligation extends to needing to specify in the tenancy agreement what kind, quality, and condition the insulation is but strangely not it’s R rating. The RTA differs from the Regulations in that you also need to specify in the tenancy agreement the insulation in the walls even though there is no requirement to provide insulation in the walls?

You also need to provide smoke alarms with a problematic issue of tenants being obliged to replace batteries of unspecified alarms but not all. I can see some interesting cases developing with tenants tampering with mains operated and monitored units and claiming they thought they were obliged to do this.

The notice requirements re right of entry by the landlord has been changed to 24 hours from the normal 48 hours but only for insulation and smoke alarms. What a mess this will cause with tenants and landlords getting mistaken ideas what their rights and obligations are. At least they have at long last fixed up the mistake that was made in 2010 re a penalty for tenants who would not permit access.

A half-hearted attempt has been made to make things easier to regain an abandoned property. Nick Smith told me it was because HNZ had lots of empty abandoned properties. Once a tenant is 14 days in arrears (three missed rent payments) you need to serve a 24 hours notice of inspection (not the normal 48 hours) on the tenant then apply to the court for a non attendance hearing. To do this you must have an email address for the tenant to permit official notice of procedure to be given. Alas the RTA still does not define what an abandoned property is. No mention is made of dogs or even other (non tenant) people in a property. No mention is made of mains power dis-connection. No mention is made of what to do when the water is flowing out the door from overflowing sinks. No mention is made of what to do when there is a rotting body in a property (not necessarily the tenant). No mention is made of tenants who are imprisoned or have left the country (perhaps by being deported). These are all things I have faced and dealt with.

There is another fascinating requirement that to my knowledge has not been in media releases. All tenancy records now must be kept during a tenancy and for 7 tax years after it finishes. These records are defined as tenancy agreement, amendments to the agreement, inspections, records of all correspondence, notices, letters, emails, all maintenance records and photo graphs and other forms of communications. I guess other forms of communications mean text, face book, snap chat, and maybe even phone call records. These are to be for all communications with the tenant or any person acting on the tenant’s behalf. They do not define or limit the definition of what is regarded as a person acting on behalf of a tenant. Could this be parents, partners, lovers, Police, neighbours, flat mates, or plain old busy bodies?

A little bit has been published about changes to the retaliatory notice provisions. My understanding of what was being said in the media varies somewhat with what I read in the amendments. I am sure I heard that the rules around giving of retaliatory notice had been tightened up to stop abuse of it by landlords. To me that means the narrow definition of retaliatory notice has been widened. In fact all that appears to have changed is the tenants have now got longer to appeal / make an application to the tribunal to have it struck out. Times have changed from 14 to 28 days. The tribunals would often accept applications over 14 days so nothing has really changed here. However the penalty on landlords has been ramped up to a maximum of $4000 which makes it one of the larger fines that can be imposed. I have noticed frequent abuse of the 42 day notice provisions so perhaps this might give the tribunal a bit more power to deal with such cases.


 

Glenn Morris is a well-known property manager and investor in Blenheim. He is the current secretary of the Nelson Property Investors Association. He was active in the review of the RTA and is a well-known figure in the property investment community. He has a reputation for effectively managing difficult tenancies.


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