RSS Feed

Landlords would do well not to underestimate the RTA

Wednesday, February 03, 2021

Mainstream commentary on the Residential Tenancies Amendment Act 2020 (RTAA 2020) is grossly preoccupied with the removal of the 90-day no-fault termination notice. At times, it even exaggerates the (detrimental) consequences landlords will be made to suffer post 11 February seeing as the proverbial rug is about to be pulled out from under us.

We disagree and offer this reframe - That while the 90-day no-fault termination notice is the easiest ‘catch-all’ solution for landlords to move along problematic tenants, it is not the only one. To describe its removal as the clipping of landlords’ wings would be an injustice to the Residential Tenancies Act (RTA) and the full set of tools it has available for landlords to manage our tenancies. Our hope and expectation are that landlords will come to appreciate the RTA’s legal apparatus in its entirety and see that there are still ample ways to preserve our rights as property owners.

S56 termination

An example is an s56 application for termination (for non-payment of rent and other breaches) which is not subject to RTAA 2020 amendments. The section itself is nothing new. After all, it is the legal authority for 14-day notices. The other aspect of s56 that does not get talked about nearly enough is that failure by the offending party to remedy the breach within the notice period could give the aggrieved party the ability to apply to the Tribunal for termination. And this mechanism could very well capture most of the situations that would, prior to 11 February 2021, warrant and result in a 90-day notice.

Say you have a tenant who persistently disturbs the peace in the neighbourhood but the behaviour never amounts to the statutory standard for anti-social behaviour. The three-strike rule isn’t going to help you there (especially when the tenant is entitled to challenge your allegation). But, disturbing neighbours is a breach of s40(2)(c) that warrants an s56 notice. If the tenant does not rein in her behaviour within the 14-days or if her behaviour is in such a way that you do not believe the breach could be remedied then you can make an application to the Tribunal for termination. If the Tribunal considers it fair and just for the tenancy to be terminated, it would do so in your favour. Indeed, the Tribunal is known for ordering an s56 termination for a variety of behaviours such as rent arrears, meth consumption, failure to upkeep, disturbing neighbours, abusing/harassing contractors and similar such.

S55B termination

Another instrument that could provide landlords with some much-needed assurance is the soon to be s55B. Landlords (not tenants) will have the ability to apply to the Tribunal for termination citing hardship. We won’t know much about how the section will be interpreted and applied until the amendments bed in and cases are brought forth for adjudication. However, on the face of it, it certainly looks hopeful for those landlords seeking to be released from an unduly onerous tenancy.

Inconvenience ≠ hopelessness

Keen-eyed readers out there would point out that termination by application is not the same as a termination by notice; that the alternatives proposed here are not like-for-like replacements for the 90-day notice. And you would be right.

In saying that, something that is inconvenient is not straightaway hopeless. Removing the 90-day notice makes termination inconvenient for landlords but not impossible. If renting is to be accepted as a business like any other then landlords shouldn’t cower from pro-consumer principles that underwrite the business zeitgeist. Most of us had been tenants before and can surely see the value of having a rental relationship that is built on transparency and certainty. If we care to cast aside our immediate concerns about the amendments, we will hopefully see the RTAA 2020 as a call to action to elevate our professionalism, broaden our understanding of the law, allow knowledge to empower our actions and have faith that the system will still facilitate an equitable outcome as long as our reasons and actions are just.

So keep that head up. 11th February is not Doomsday. It is merely a day on the calendar.


Recent Posts


property maintenance bond cat Case study scotney williams interest only Market report positive cash flow election2020 daikin negotiation off the plan wealth creation management education initio auckland holiday house rent arrears relationship tenancy tribunal election 2017 heater principal and interest development cash-flow tax DTI Jeff Bezos LIM asbestos anz government advice unitary plan trademe rta rta reform cgt Must knows CoreLogic rental wof recycling equity HHGA HHS Tribunal case study ocr watercare anti-social behaviour clnz boarding house property value market rent extractor fan RTAA 2019 tenancy issues rent buying rules rent control inspection barfoot and thompson television covid-19 interest rates rtaa2020 Sponsored post commerce commission tenant market sale and purchase mindset short-term rental quiet enjoyment CCC housing package Q&A bond form investor subdivision warm up new zealand robert kiyosaki auckland council Holler banking property trust p lab RBNZ interest deductibility letting fee will ventilation warren buffett ring-fencing legal equity bad tenant buying Guest blog Standards New Zealand first home buying early termination return bankruptcy housing bubble skill shortage trespass Question and answer yield business khh debt enforcement gluckman report privacy finance kiwibuild apia renovation Gluckman Level 4 parry v inglis sublease maintenance termination rent increase insurance nzpif letting damage worksafe shortland chartered accountants meth partners opes partners sale and purchas heating Kris Pedersen Mortgages and Insurance structure Editor's Choice How to investment strategy mortgage rental market heat pump property apprentice income shower dome brightline speculator Investment tip ird water bill property management productivity personal growth reserve bank house prices TCIT tenancy services Must know financial advisers act re agent property cycle building retaliatory notice smoke alarm winz wins fixed-term tenancy HSWA minor dwelling ask an expert Landlording lvr buyer's agent airbnb housing affordability insulation legal cost data security capital gain Investor story landlord beginner investor twg report meth contamination Property (Relationships) Act


Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo
09 360 2376

The Tenancy Practice Service and TPS Credit Control work closely with the Auckland Property Investors' Association. Our vision of bringing helpful resources, documents and high quality services to Auckland Property Investors and Property Managers is shared by APIA, so its a partnership that works well. 

The Auckland Property Investors' Association is a great organisation for those who want access to advice and information from a range of industry experts and partners. 

Mathieu Holt- Managing Director, The Tenancy Practice Service & TPS Credit Control
Through the Association I found the channels and methods to fund the purchase of property I never dreamed about. Grant Brown

All round it has been one of those things Neil and I felt was really worthwhile belonging to. We have learned so much it has just built our confidence in what we are doing.

Janice Bieleski
I read two articles in the monthly magazine that saved me over $5,000. That is my membership fee for the next 26 years and I am sure I will learn a whole lot more! John Duncan
Fantastic organisation. The networking opportunities are brilliant and provide us with information and opportunities that cannot be obtained anywhere else. We learn something new at every meeting and we've been in this game for nearly 20 years. Pauline and Gyanen Kumar

I find the information obtained from various APIA meetings very useful in guiding my own property investment and rental management.  I also enjoy the networking opportunities with like-minded investors.  I am inspired by other investors’ success and find the more experiences and knowledge that I share with others, the more confident I become.  

Thanks to all APIA event organizers and administrators for your brilliant work. 

Stella Shao

I like talking to people and learning from their experience because it gives me the confidence to invest well. I think it is a knowledge thing. I now know I am doing things the right way.

Stephen Weatherall

My APIA membership has become a total success.

Every time I attend a monthly or regional meeting I come away with so many useful and positive tips that have added value to my property investments and management.

Not only that, the website is a great place for practical advice and useful information. It has now evolved into an important resource for my business.

Talk about value for money! The discounts I have been getting at Bunnings when I present my APIA membership card have more than paid for my annual subscription!

Tim Duffett, Plan A Investments Limited