A tenancy agreement defines the relationship between a landlord and a tenant - in other words, it is a contract between you and the tenant. It outlines the terms and conditions of the rental arrangement, ensuring that both parties understand their rights and obligations.
The team at Oxygen has put together a crash-course guide to understanding tenancy agreements in New Zealand.
Types of Tenancy Agreements
1. Fixed-Term Tenancy
This type of agreement specifies a start and end date, usually for six months or a year. During this period, neither party can terminate the tenancy without mutual consent or sufficient legal cause. Fixed-term tenancies offer stability but require commitment from both parties for the duration of the term. The tenancy will automatically become a periodic tenancy when it ends. If the landlord or the tenant doesn't want it to become a periodic tenancy, they need to give notice saying this. The notice must be given between 90 and 21 days before the expiry date of the fixed term.
2. Periodic Tenancy
Unlike a fixed-term tenancy, a periodic tenancy doesn’t have an end date. It continues until either the tenant or landlord gives written notice. This type of agreement provides flexibility, allowing tenants to move out with 28 days' notice (unless the landlord agrees to a shorter time), while the length of written notice a landlord has to give depends on the reason for the periodic tenancy ending.
If there are multiple tenants named on the tenancy agreement, and one of the tenants gives the landlord written notice, this ends the tenancy for all the tenants.
3. Boarding House Tenancy
This applies when a tenant rents a room in a property where facilities like the kitchen and bathroom are shared with others. Boarding houses are subject to specific regulations to ensure the safety and well-being of residents, making these agreements slightly more complex.
4. Commercial Tenancy
For properties used for business purposes, commercial tenancy agreements are different from residential ones, with distinct rules and obligations. These agreements often involve more significant financial commitments and different legal protections.
5. Holiday Home Tenancy
This type of agreement is for short-term rentals, usually for vacations or holidays, and is governed by unique terms suited to temporary occupancy.
Required Components of a Tenancy Agreement
Every tenancy agreement must be in writing and include the following components
Names and Contact Details
The full names and contact information of both the landlord and the tenant must be clearly stated.
Property Details
The address and a description of the property, including any specific areas or items included in the tenancy (e.g., parking spaces, storage areas). Term of Tenancy: Whether the tenancy is fixed-term or periodic, along with the start and end dates for fixed-term tenancies.
Rent Details
The amount of rent, the frequency of payments, and the method of payment should be clearly outlined.
Bond Information
If a bond is collected, the amount and the fact that it will be lodged with Tenancy Services must be included. The bond can be up to four weeks' rent.
Maintenance and Repairs
Responsibilities for property maintenance and repairs should be specified, detailing what is expected from both parties.
Insurance and Liability
The landlord’s insurance responsibilities should be detailed, along with the tenant’s obligations regarding personal belongings and liability insurance.
Mandatory Statements
New Zealand law requires that certain statements be included in all tenancy agreements, such as:
Insulation Statement
As per the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016, landlords must provide details about the insulation in the property, including its type, condition, and location.
Healthy Homes Standards
From July 2021, all rental properties must comply with Healthy Homes Standards, and the tenancy agreement must include statements about the property’s compliance status.
Rights and Obligations
Both landlords and tenants have rights and obligations under the Residential Tenancies Act 1986:
For Landlords
The obligation to provide a habitable property, maintain the property in a reasonable state of repair, and respect the tenant’s privacy.
For Tenants
The obligation to pay rent on time, keep the property reasonably clean, and not cause damage beyond normal wear and tear.
Dispute Resolution
If issues arise, both landlords and tenants are encouraged to resolve them amicably. If this fails, they can seek mediation through Tenancy Services or escalate the matter to the Tenancy Tribunal.
Understanding and correctly drafting a tenancy agreement is paramount to a smooth, legal and pleasant rental experience for both landlords and tenants. By ensuring all legal requirements are met and clearly outlining the terms of the tenancy, both parties can avoid disputes and foster a positive rental relationship.
Are you looking to rent your property? Complete our quick rental appraisal form.
