Home » Don’t be scared of the RTA: Your tenancy questions answered

Don’t be scared of the RTA: Your tenancy questions answered

We want to say a big thank you to everyone who joined us at last night’s webinar, Get it Right: How to Navigate the minefield of Residential Tenancy. It’s fantastic to see so many of you spending a Thursday night to invest in your success.

Related video: Get it Right: How to Navigate the Minefield of Residential Tenancy

Here are the answers to the questions we didn’t manage to get to during the webinar:

Q: Are property managers required to operate a trust account? If not, when will it become a requirement?

A: Property managers are not required to operate a trust account though it is certainly preferred and best practice to. Clause 47 of the Residential Property Managers Bill (expected to in force 18 months after the Act receives Royal Assent) requires registered property management organisations to operate trust accounts. 

Q: Where can I find an up-to-date version of the Residential Tenancies Act? 

A: Here.

Q. Can tenancy agreements be self-made? 

A: Yes, so long as it meets all RTA requirements (in particular, ss13, 13A and 11). 

Q: What does opting in and opting out of the RTA mean? 

A: The RTA sets out minimum standards for tenancies that it captures. Parties to a captured tenancy cannot opt out of the Act. However, parties of excluded tenancies (see s5) can voluntarily opt into the RTA either in full or in part. 

Q: How do I know if I am operating a boarding house? 

A: See here for more information. 

Q: Is there a template for rent receipts? 

Regrettably, we don’t offer one; neither does Tenancy Services. However, the RTA’s requirements for receipts are pretty straightforward. They must include: 

  • the address of the premises (or a uniquely identifiable code for the premises) to which the payment relates and 
  • the amount and nature of the payment and
  • the date of the payment and 
  • the name (if known) of the person making the payment.

Landlords are only required to issue receipts in limited circumstances. But, if you are required to then your failure to do so would be an unlawful act and an infringement offence. You may also want to check in with your accountant to ascertain if there are any IRD requirements for rent receipts. 

Q: My property is only insured for fire and earthquake (i.e. not tenant damage or destruction), do I have to disclose details of the policy to my tenant? 

A: Yes. You are required to make an insurance disclosure statement irrespective of whether the property is insured. If the property is not insured, then the statement should indicate so. If the property is insured, then your disclosure statement should set out aspects of the policy that relate to the tenant’s liability for destruction of or damage of the premises including the amount of each access relevant to that liability. Additionally, if you haven’t already provided a copy of the policy to the tenant, the statement should also inform the tenant his/her right to request a copy of the policy from you. 

Q: How do I end a fixed-term tenancy in order to sell the property?

A: Assuming your fixed-term tenancy started after 11 February 2021:

  • If you are under an unconditional agreement to give the buyer vacant possession, you can end the fixed-term tenancy on or after the expiry with at least 90 days’ notice under s51(2)(b)
  • If the property hasn’t been listed for sale then you can end the fixed-term tenancy on or after the expiry with at least 90 days’ notice under s51(2)(a). You must list the property on the market within 90 days of the termination date.

Q: If a property manager commits a tenancy wrong who pays the fine to the Tribunal? The owner or the property manager?

A: That will depend on who is listed on the tenancy agreement as the landlord and whether there are indemnity terms in the management contract that would allow one party (usually the property manager) to be compensated by the other (usually the landlord). We are also starting to see adjudicators imposing fines on both landlords and property managers in certain cases.

In general, we recommend landlords to

  • Get a legal opinion on management contracts to understand exactly what you are signing up for and
  • Vet a property manager carefully and
  • Expect that while you can outsource your responsibilities, you cannot outsource your accountability under the RTA.

Related article: How to vet a property manager

Q: How do I stop a fixed-term tenancy from rolling over into a periodic tenancy?

A: We assume you are referring to fixed-term tenancies of more than 90 days.. If your fixed-term tenancy predates 11 February 2021 then you simply give a notice between 90 and 21 days before the expiry date. The fixed-term tenancy will end on the expiry date.

If your fixed-term tenancy came on or after 11 February 2021 then there are four ways to stop it from rolling over into a periodic tenancy.

  • If the agreement is renewed or extended before the expiry of the fixed-term or
  • If you and your tenant both agree not to continue with the tenancy after it expires or
  • If your tenant gives you a notice to discontinue the tenancy at its expiry. The notice must be given at least 28 days before the expiry date or
  • Either of you give notice under s 50(1)(a) to (b) terminating the tenancy
    • on expiry or
    • before expiry or
    • would do if the tenancy is already periodic

Alternatively, for fixed-term tenancies that post-date 11 February 2021, you can achieve termination by giving a notice under s 50(1)(a) to (b) as long as the termination takes place on or after the expiry of the fixed term (i.e. once it has rolled over into a periodic tenancy).

Use Tenancy Services’ online decision tool to find out how much notice you need to give to end a tenancy.

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