Almost 2 years after it was first introduced, the Residential Tenancies Amendment Bill (RTAB) 2020 was passed on Wednesday 5 August 2020. It brings some significant changes to the Residential Tenancies Act 1986 and some feel that it substantially changes the balance of power in favour of the tenants, in particular with regard to terminating tenancies.

Aim of the introduced changes

The aim of the changes introduced by the Bill is to provide more security and stability to tenants while still protecting landlords’ interests. On the face of it, it does appear that the changes are primarily in favour of the tenant, but on closer investigation, this is not quite the case.

Changes in the Bill

Some of the major changes introduced by the Residential Tenancies Amendment Bill include the following:

• the 90-day notice to terminate a periodic tenancy without reason (the so-called ‘no-cause eviction’) may no longer occur.
• a fixed-term tenancy will become a periodic tenancy at the end of the fixed-term period unless both parties otherwise agree otherwise, or the tenant gives notice, or the landlord gives notice using one of the reasons specified in the Bill. The period of notice a tenant must give has increased from 21 to 28 days.
• rent increases may only occur annually and not less than 12 months after a new tenancy has begun.
• rent “bidding” is banned.
• owners must reasonably allow the installation of a fibre broadband connection if a tenant requests it but there should be no cost to the owner.
• owners must reasonably allow for minor alterations to be made by tenants but they may impose reasonable conditions on how the alterations are carried out, and the changes must be remediated at the end of the tenancy.
• if a complaint by a tenant has been upheld by the Tenancy Tribunal, details identifying the tenant will be not be included in the Tribunal orders.
• tenants experiencing family violence may give two days’ notice to terminate a tenancy.
• tenants who abandon a premises remain liable for the rent for 28 days, an increase from 21 days.
  
  

Removal of the 90-day notice to terminate a tenancy without notice

The biggest concern about the RTAB seems to be the ‘no-cause evictions’ clause. Before looking more closely at this change, an important point to note about terminating a tenancy is that no landlord evicts good tenants. It doesn’t make sense for them to do so as their rental property is an investment and only earns money if there are tenants. The ideal situation for all landlords is to have long-term occupancy and a continuous rental income. Evicting tenants on a regular basis as the media would have us believe occurs, does not achieve this.

How can a tenancy be terminated?

Tenancies can still be terminated by the following:

1. Specified reasons
Under the new Bill, landlords may not terminate a tenancy without a reason but they may apply to the Tenancy Tribunal for termination using one of a number of reasons specified in the Bill such as the owner or owner’s family wanting to live in the property or the property is to be sold with vacant possession. The minimum notice period has increased from 42 days (6 weeks) to 63 days (9 weeks).

2. Rent arrears
Tenants who are late with rental payments may be sent a 14-day notice to remedy and the landlord may apply to the Tenancy Tribunal to terminate a tenancy if the tenant is 21 days in arrears. This has not changed from the previous provisions.  

What has changed is that the landlord may apply to the Tenancy Tribunal for termination if, within a 90-day period a tenant has been at least five working days’ late with the rent payment on three separate occasions, and the landlord has issued the required notices advising the tenant of these. This is a new clause that prevents tenants from being continuously up to but not quite over 21 days in arrears.

There are specific requirements for notice to be given under the five days late with rent payments provision, and the landlord must apply to the Tenancy Tribunal within 28 days of the last notice being issued. Regardless of the outcome, the tenant remains liable for all unpaid rent.

3. Anti-social behaviour
Under the Residential Tenancies Act 1986, a landlord was able to apply to the Tribunal to end a tenancy where:

• a tenant assaulted or threatened to assault the landlord or their family, the owner or their family, neighbours, or other occupants of the premises; or
  
  
• either a tenant or someone permitted by them, has caused or threated to cause substantial damage to the premises.
  
  

This has not changed from the previous provisions. An assault or damage only needs to occur once before an application to terminate the tenancy may be made to the Tribunal.

The Bill also introduces a new provision to deal with anti-social behaviour. If, on three separate occasions in any 90-day period, anti-social acts have been issued with a notice, the landlord may apply to the Tenancy Tribunal for termination within 28 days of the last notice being issued. Anti-social behaviour is defined as ‘harassment or anything that reasonably causes alarm, distress or nuisance that is more than minor, to others’.

Nightingales view

Our view is that the changes that the Bill has introduced will not adversely affect the relationship between landlords and tenants.

While the ‘no-cause evictions’ provision has been removed, the Bill retains the ability to terminate a tenancy on the basis of damage, anti-social behaviour and non-payment of rent, and in fact the latter has become more favourable to landlords.

The Bill also gives the tenants more flexibility in what they can do to their rental property but must be remediated at the end of the tenancy.

Fixed-term tenancies have always converted to periodic unless both parties agreed to extend or renew the fixed-term tenancy. The major change is that a landlord cannot give notice except by using one of the specified reasons, but as already stated, landlords do not give notice to good tenants unless they have good reason to do so such as requiring the property to live in or wishing to sell.

At Nightingales, we do not increase rents more frequently than annually except on the request of the owner and this only happens very infrequently. And we have never engaged in rent bidding.

Undoubtedly, there are bad landlords so it is only fair that a tenant who takes a complaint against a landlord to the Tribunal should not be disadvantaged if the complaint is upheld.

But overall, the changes brought about by the Bill will not change the ‘balance of power’ as some people fear it might.