Tenancy Law Changes Explained

Welcome to this weekend’s newsletter – we take a deep dive into the recent changes to the Residential Tenancies Act. This new legislation reworks various provisions of tenancy law in New Zealand. If you’re a current or prospective landlord, you’ll want to keep informed about these law changes.

The bulk of the changes relate to how and when landlords can terminate a residential tenancy. The ban on ‘no-cause terminations’ introduced by the previous 2020 Labour government, is now gone, making it easier for landlords to end tenancies, particularly periodic tenancies.

If landlords want to end a periodic tenancy by giving 90 day’s notice, a reason is no longer needed, providing vastly increased flexibility for landlords The notice period can be even shorter in cases where you or your family want to move into your property, if you’ve sold the property, or if it’s needed for your employees or contractors.

These legislative changes impact fixed-term tenancies as well, although in a slightly different way. Landlords cannot end a fixed term tenancy before the end date unless the tenant agrees – that is set and stone and almost certainly will never change. However, the new rules will affect the end of a fixed term tenancy.

Under the previous laws, when a fixed term tenancy reached its expiry date, the tenancy moved to a periodic tenancy and the landlord required ‘just cause’ to end the tenancy. Now these new rules allow landlords the flexibility to terminate tenancies after their fixed term is up without having to give a reason.

Note, these changes only apply to NEW tenancies commencing after the new legislation comes into effect (mostly from 30 January, 2025). The changes will have no effect on existing tenancies signed prior to 30 January; or on the renewal of an existing tenancy, even when the renewal is after 30 January, 2025.

So why should landlords care about these changes to tenancy laws? Periodic tenancies are now much more appealing to landlords who value flexibility or are facing uncertainty.

Previously landlords (for instance those with student rentals) may have opted for a fixed term lease – there was no compelling reason to switch to a periodic arrangement. Now, with these changes, landlords who want to keep their options open may consider a periodic lease. You may continue to ‘fix’ your tenants for a year, however these changes will make it much easier at the end of the initial fixed lease term, to evict troublesome tenants.

If you‘re curious to know what this means for your situation, please give us a call. We’d be happy to chat and in the long term, connect you with the right property manager to ensure your needs are being serviced as well as possible.