A question recently came up in our Facebook group from Brian: “I can see on the RTA (section 44A) that landlords can charge for ‘any expenses reasonably incurred,’ but in reality, is this restricted to itemised costs paid to a third party for advertising and credit checks? Can self-managing landlords not charge for the time they spend conducting viewings, assessing applications, doing background checks, etc.?”
The short answer is: correct—but let’s break it down.
What Can You Actually Claim?
Under section 44A of the Residential Tenancies Act (RTA), landlords can be reimbursed for reasonable expenses they’ve actually incurred. These expenses typically include things like TradeMe listing fees, credit checking fees, travel, vehicle costs, and other disbursements, especially when a tenancy ends early in a fixed term.
However, the key here is that the RTA allows for reimbursement of actual out-of-pocket expenses rather than hypothetical charges. This means landlords can only claim costs they’ve paid to someone else, supported by an itemised list of expenses, and not for time they spend doing tasks themselves.
Why Can’t You Charge for Your Own Time?
The reason self-managing landlords usually can’t recover time spent conducting viewings, assessing applications, or doing background checks is straightforward: you can’t contract with yourself to perform a service. Since you can’t create a liability or incur an expense for time spent doing something for yourself, this doesn’t meet the criteria for a reimbursable expense under section 44A.
Even If You Negotiate, It’s Not Enforceable
Even if a self-managing landlord negotiates with the tenant to be paid for their time spent administering an early termination, such an agreement won’t be enforceable. Under section 11 of the RTA, while a landlord can contract out of the Act to their own detriment, a tenant cannot. This means that any agreement requiring the tenant to pay for the landlord’s time, even if both parties consent, would not bear fruit.
Reimbursement vs. Payment
Remember, the entitlement under section 44A is for reimbursement—not payment. The tenant is only liable to reimburse the landlord for what they’ve actually paid out, not hypothetical charges for time or services that were never invoiced or contracted with a third party. The law is clear that only actual expenses already incurred are covered, and these must be itemised and documented.
Timing Matters
In general, Tribunal adjudicators also consider how early the termination occurs. If the early termination is near the start of the tenancy, it’s more likely that the Tribunal will order the tenant to pay all or most of the landlord’s claimed expenses. However, if the termination happens late in the tenancy (e.g., just a few weeks before the end), it’s not uncommon for the Tribunal to apply a “haircut” to the landlord’s claims. This adjustment reflects the fact that many of those expenses would likely have been incurred anyway at the end of the tenancy.
The calibration here recognises that section 44A is about restoring the landlord to the position they would have been in had the tenant followed through with their commitment to remain until the end of the tenancy.
Hope this helps clarify the rules for self-managing landlords!
Got Property Questions? We’re Here to Help!
One of the great perks of being an APIA member is access to expert advice whenever you need it. If you have any property-related questions—whether it’s about tenancy rules, tax strategies, or anything in between—just reach out! We’re here to provide the guidance and support that comes with your membership.
Sarina Gibbon
Sarina Gibbon is the general manager of the APIA.
Add Comment