Are you a landlord renting your property to a family member? While the Residential Tenancies Act 1986 (RTA) generally governs residential tenancies in New Zealand, it's essential to be aware of the Act's exclusions, as not all situations are covered. Section 5 of the Act lists several circumstances where it does not apply.
Of particular relevance to family rental arrangements is section 5(1)(n), which excludes rentals when the rental property serves as a residence for the landlord, property owner, or a member of their family. However, Section 8(1) of the RTA provides an avenue for parties involved in an excluded tenancy to opt for the Act's application by drafting a written agreement. Any modifications to the RTA's provisions must be explicitly stated and signed by both parties.
While this may seem straightforward, there are complexities to consider:
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Standard Tenancy Agreements Fall Short: The primary pitfall is that a standard tenancy agreement, like the one available from Tenancy Services, is insufficient to bring an excluded tenancy back under the RTA's jurisdiction. Even if both parties sign the standard agreement, the Tenancy Tribunal, responsible for resolving disputes related to tenancies, lacks the authority to mediate or resolve issues under the Act.
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The Need for a "Contract-In" Clause: To apply the RTA to family rental situations, a specific "contract-in" clause must be added to the tenancy agreement. This clause should explicitly state that both parties, i.e., the landlord and the tenants, agree to be bound by the provisions of the RTA. It is crucial that this clause is signed by all parties involved.
Family rental arrangements can quickly become challenging, potentially straining family relationships. However, by incorporating a contract-in clause into the tenancy agreement, signed by all parties, family rentals can function smoothly.
So, the next time you consider a family rental situation, ensure that your tenancy agreement includes a specific clause wherein both parties agree to "contract back into" the RTA. This step can help safeguard your rights and responsibilities while fostering a healthy landlord-tenant relationship within your family.
