Removal of the 90 day no-clause termination30 Sep 2020

The Residential Tenancies Amendment Act (RTA) 2020 removes the ability of landlords to end a periodic tenancy by giving 90 days’ notice without giving a reason to the tenant. This part of the legislation comes into effect on 11 February 2021.

When do landlords use 90-day notices?

Landlords and property managers issue 90-day notices for a number of reasons, including to remove problematic tenants who display antisocial behaviour or who are consistently late with their rent payments.

What can a landlord do if a tenant is displaying anti-social behavior?

The no-cause termination has been useful when tenants are behaving in such a way that they are a nuisance to neighbouring properties and when neighbours are reluctant to go on the record for fear of retaliation. No-cause terminations are issued as a last resort and the president of the New Zealand Property Investors Federation has been quoted as saying that only about 3 percent of their members’ tenants were given a 90-day notice in a typical year.*

The new amendments allow landlords to terminate tenants on a periodic tenancy who engage in repeated anti-social behaviour. Landlords must issue tenants with three notices for separate anti-social acts in any 90-day period which clearly describe the behaviour, who engaged in the behaviour (if known), the date and approximate time and location, and how many other notices have been given within the 90-day period. The landlord must also advise the tenants that they can challenge the notice in the Tribunal. If three notices are issued, the landlord must apply for termination of the tenancy within 28 days of the last notice being issued.

So, what is anti-social behaviour?

Anti-social behaviour is when a tenant has acted in a way that has caused harassment, alarm, distress, or nuisance that is more than minor and includes unintentional acts or acts by omission. If the tenant disputes the notices, the onus is on the landlord to prove that the anti-social behaviour occurred. If this is proven, and the Tribunal considers that the notices are fair and reasonable, it must make an order to terminate the tenancy.

Your Harcourts property manager keeps detailed diary notes of conversations and correspondence with tenants and any relevant parties. They will act in a timely manner when dealing with any complaints of anti-social behaviour so that the window of opportunity to terminate an anti-social tenant is not compromised. Our property managers’ first course of action is always to discuss and educate a tenant about the behaviour and what is expected of them. Harcourts property managers will continue to strive to maintain professional and respectful relationships with their tenants.

What if a tenant is consistently late with their rent payments?

The RTA Amendment Act 2020 has provided additional provisions for landlords to use if a tenant is repeatedly late with their rent payments, but they do not reach more than 21 days in arrears (which is already provided for in the current Act).

If a tenant is, on three separate occasions in a 90-day period, at least five working days late with their rent payment, and the landlord has issued the required notices, the landlord can apply to have the tenancy terminated. However, the landlord must do so within 28 days of the last notice being issued.

The notices must include the dates for the rent arrears, the amount overdue and how many other notices have been issued within the 90-day period. The notices must advise the tenant that they can challenge the notice in the Tribunal. If the Tribunal is satisfied the
requirements for termination are met, it must make an order to terminate the tenancy.

Harcourts’ policy on rent arrears

Harcourts has a zero tolerance to rent arrears and our property managers act the moment a tenant falls into arrears. Our trust accounting systems track our actions and correspondence with tenants so that we can monitor their payments and issue the appropriate notices as and when required.

The RTA currently provides for landlords to issue 14-day notices to remedy a breach that includes non-payment of rent. If a tenant fails to remedy the breach, the landlord can apply to the Tenancy Tribunal for termination. If a tenant owes 21 days of rent or more, the landlord can apply to the Tenancy Tribunal for termination of the tenancy. This legislation has not changed, rather this amendment to the RTA has given landlords additional provisions for dealing with rent arrears after issuing no-cause termination
notices becomes an unlawful act.

What happens if a tenant breaches their agreement?

It is important to note that the Bill retains the provisions that enable a landlord to apply to the Tribunal when a tenant fails to remedy
a breach of their tenancy agreement or the Residential Tenancies Act 1986. This includes, but is not limited to, a tenant failing to meet their obligations under the RTA to not interfere with the peace, comfort, or privacy of the landlord’s other tenants or the neighbours. A 14-day notice to remedy a breach should still be issued and if a tenant does not remedy the breach within the given time frame, the landlord can apply to the Tribunal to have the tenancy terminated. Other breaches may include smoking inside the house and keeping pets when they are not permitted to do so.

This article is featured in Harcourts' Property Management Focus Issue 9, 2020.