Information for tenants
Here are some general guidelines to help you to become a well-informed tenant.
A tenancy bond is a payment of up to four weeks’ rent made to the landlord by tenants when they move into a property. The bond is held to cover any losses the landlord incurs if the tenant breaches any of the conditions in the Tenancy Agreement or the general obligations of a tenant.
The landlord will collect the bond from the tenant, and they must lodge it with the Bond Centre within 23 working days, with a signed Bond Lodgement form (by both the landlord and tenant).
The bond is held by the Bond Centre until a Bond Refund form is filed (signed by both the landlord and tenant) by either the tenant or landlord. To ensure this part of the process progresses smoothly, it is important that the tenant and landlord lodge any Change of Tenants or Change of Landlords during the period of the agreement.
If there is any damage to the property at the conclusion of the agreement, and the landlord and tenant agree on the value of this, then the bond is divided between the parties accordingly. However, if the parties are unable to agree on the value, then one of the parties can apply to the Tenancy Tribunal for mediation.
It’s very important that landlords and tenants understand whose responsibility it is to have insurance to make sure that both parties are protected against loss. When selecting insurance make sure that you inform your insurance company that the property is a rental property.
Tenants – The tenant must ensure they have personal contents insurance for their belongings to ensure they are protected against loss. Contents insurance will also cover your liability as a tenant. If you or another tenant damages the property you rent, you could be liable for repairs.
Landlord – The landlord must have insurance for the property (the physical buildings and the section) against fire, storm, flood, damage from burglary, etc, if they want it protected against loss. To ensure coverage it is vital that you advise the insurance company that the property is tenanted. Check that your policy covers chattels, e.g. carpets and curtains.
We also recommend that landlords take some form of property and income protection insurance. This is an additional insurance taken out by a landlord to cover:
- Loss of rent due to tenants doing a ‘runner’.
- Loss of rent due to eviction.
- Malicious damage or theft by tenants.
- Rent recovery while malicious damage is being repaired.
Repairs and maintenance
Both the tenant and the landlord have responsibilities and obligations when it comes to repairs and maintenance which both parties should be aware of. It is in both parties’ interests to have the property repaired promptly to prevent further damage and discomfort.
If tenants discover damage or maintenance that needs to be carried out, then they should inform the landlord as soon as possible. If the damage is serious or is likely to cause harm to someone and the tenants have been unable to contact the landlord after making every effort to do so, then the tenants may have the repairs done and ask the landlord to reimburse them (this applies to health and safety issues only). However, if the repairs are not of an urgent nature then the tenants must inform the landlord and ask them to fix it.
If the tenants have asked a landlord to make specific non-urgent repairs and the landlord has not done so in a reasonable amount of time, then the tenants have other actions they can take, such as serving the landlord with a Fourteen Working Day Letter asking for the work to be done. In such situations, it is recommended that the tenant contact Tenancy Services (www.tenancy.govt.nz) to ensure that they follow the correct procedures.
On some occasions, the landlord may discover damage that has been caused by the tenant. In these cases, the landlord should issue the tenant with a Fourteen Working Day Notice, which will give the tenant two weeks to fix the problem.
If these obligations are fulfilled it is beneficial to both parties. The tenant will have a safe, comfortable place in which to live and the landlord will maintain an investment that will continue to provide good returns.
Mediation and the tenancy tribunal
Mediation is usually the second step of dispute resolution. The first step is usually to try talking to your landlord. If the first step is unsuccessful then either the landlord or tenant can apply to the Tenancy Tribunal for mediation. Mediation takes place when an impartial person (someone not personally involved) helps the two parties to reach a solution for their problem.
The mediator will allow each person to explain to the other how they view the problem, help them discuss the possible ways to solve that problem and encourage them to choose the best solution for both of them.
A mediator is not able to make a decision for the parties. They can only help and encourage the parties to reach an agreement. The resulting decision is put into a mediated order which is then binding on both parties. Occasionally the parties in mediation are not able to agree upon a decision. If this is the case, then the dispute will go to a Tenancy Tribunal hearing.
The Tenancy Tribunal is a special court set up to deal with unresolved problems between landlords and tenants which they have been unable to settle themselves.
A Tenancy Tribunal case normally takes place only after mediation between the parties has been attempted and the parties have been unsuccessful at reaching a resolution. A tenancy adjudicator oversees the case and makes a decision, which is legally binding on both parties.
The adjudicator listens to both parties, any witnesses and evidence that either party feels is important and makes a decision based on this information and any provisions in the Residential Tenancies Act.
For more information, visit the Ministry of Business, Innovation and Employment http://www.mbie.govt.nz/info-services/housing-property/tenancy or Tenancy Services http://www.tenancy.govt.nz