Merry Christmas from Harcourts

At Harcourts, we’d like to take a moment to thank you for your continued trust and partnership this year. Your support has been
invaluable, and we are committed to delivering the best possible service as we move into the new year.

As the festive season approaches, we send our warmest wishes to you and your loved ones. May this time be filled with peace, good health, and joy; and may the year ahead bring you exciting opportunities and lasting success.

Residential Tenancies Amendment Bill 2024 – Update

In previous editions of the PM Focus newsletter, we have included updates on the progress of the Residential Tenancies Amendment Bill 2024. We can now report that the Residential Tenancies Amendment Bill (RTA Bill) has passed its Second Reading stage with all recommendations by Select Committee voted in favour and adopted.

Key examples of the committee’s recommended changes which have now been adopted in the Bill include:

• Clarifying rules for consenting to and refusing requests to keep a pet, by expanding and clarifying grounds for refusing a request, and adding
  a non-exhaustive list of reasonable conditions that a landlord may attach to their consent;
• Simplifying the smoking provisions, by allowing the prohibition of smoking inside while allowing for a case-by- case assessment elsewhere on a property; and
• Strengthening protections for tenants by extending existing rules for retaliatory terminations, which prohibit a landlord from terminating a tenancy in response to legal actions taken against them.

The next stage for the Bill is the Committee of the Whole House. You can find out more about the Bill and track its progress on the Parliament website. We will update you again when this Bill is passed into law.

Harcourts property managers are being kept well informed of the proposed changes, and once the Bill has been passed into law, we will be providing comprehensive training to all Harcourts property managers throughout New Zealand to ensure full compliance with the Residential Tenancies Act and Amendments on behalf of our landlords.

Modernising the tenancy bond service

Tenancy Services are upgrading and modernising the tenancy bond service and changing how they deliver their services.

This modern, digital-first system will make bond transactions quicker and easier for landlords, tenants and property managers. Changes will be made in stages, with the first stage of the project taking effect from late November 2024.

This first stage will enable new bonds to be lodged digitally. For property management companies, this will
be administered via our property management software that has been developed for a new business to business connection. For private landlords, other options will be available.

Harcourts offices use the most up-to-date property management software available, and we anticipate a seamless transition to the new and improved system.

Locking up over the holidays

If you are lucky enough to be going away over the summer holidays, you’ll want to make sure your home is as secure as possible while you’re away, to avoid any nasty surprises when you return.

Here are some tips for securing your home.

• Secure all tools, ladders, axes, hammers, and saws – anything that will help thieves break into your house.
• Lock all doors and windows, set alarms, and use deadbolts. Don’t forget the garage.
• Leave your curtains open and your blinds up, but if you have anyone popping over, get them to adjust them now and again.
• Use lights with timers – a dark home over many nights is a sure sign you’re away. Timed lighting gives the appearance of activity, and the more you mix up the lighting timing and locations, the better.
• Unplug appliances and devices to minimise the risk of electrical fires.
• Clean out your fridge to minimise the amount of food you keep in the fridge and freezer while you’re on holiday. That way less will be lost if there’s a power cut while you’re away.
• Turn down the ring tone on your phone if you still have a landline. Long, loud, unanswered rings are just another way of shouting out, “No one’s here.”
• Be careful who you tell, don’t advertise your absence on your phone answering machine, sites like Facebook, or anywhere else that isn’t secure.
• Leave an emergency contact number with friends or neighbours.
• Cancel your newspapers and other deliveries, so they don’t pile up on your doorstep and advertise that you’re away.
• Keep the garden tidy if you are lucky enough to be away for an extended period, arrange for someone to come and mow your lawns and tend to the garden.
• Ask a friend to help if you’re going to be away for an extended period, you may want to ask a friend to pop over once a week.
• Keep a car in the driveway or ask a neighbour to park in your driveway occasionally.
• Ask your neighbours to help if you know them well enough and ask them to check on your house for litter, and branches that have blown down or pot plants that have fallen over. These are tell-tale signs you have gone away.
• Tell neighbours you’re going away and arrange for them to collect your mail. Nothing says, “No one’s home!” like an overflowing mailbox.
• Hide any valuables including jewellery so that thieves cannot locate them easily.

Now kick back and enjoy your holiday with additional peace of mind.

Renting with Harcourts – Christmas edition

As part of our continued commitment to our tenants we publish a newsletter twice per annum to coincide with Winter and the Summer/Christmas season. Whilst some of the articles may be repetitive, with an average tenancy lasting from 1 ½ – 2 years,
we want to educate our tenants how to look after their rental, and what their responsibilities are. At Harcourts we believe, Happy Tenant, Happy Landlord.

In the latest edition of Renting with Harcourts we included the following articles:

1. Happy holidays from Harcourts (with a reminder to check your property for maintenance before the Christmas period)
2. Low Deposit Home Loans: Options for First Home Buyers in New Zealand
3. Safe removal of 3M adhesive strips
4. What do you really have to do for a rental inspection?
5. Make a splash around your home this summer
6. Maintaining a healthy home
7. Locking up for holidays
8. Renters insurance
9. Tenancy Services – The Tenancy bond service is changing
10. Update on Gumboot Friday
11. Christmas recipes

You can access a copy of the Renting with Harcourts newsletter here

When the RTA Amendment Bill has been passed into law, we will update our tenants on the changes that directly affect them.

We thought the article on the safe removal of 3M strips and the tip to use a hairdryer to remove them was useful enough to share with our landlords – see over page

Safe removal of 3M adhesive strips (for our landlords AND tenants)

Whilst 3M adhesive tape, or any similar product, is heralded as a product that doesn’t cause damage and is an alternative to putting nails and holes into walls; this isn’t always the case when it comes to its removal.

The removal of the adhesive tape can damage the wall if not removed carefully, and often removes the paint from the wall with the strip, leaving an unsightly patch on the wall.

Heat is essential for many chemical processes, and the molecules in the 3M adhesive will loosen up when exposed to enough of it.

If this doesn’t work, you can get a removal product from your local hardware store, or try solutions such as petroleum jelly, hand sanitiser or nail polish remover.

To avoid damaging the wall try using a hair dryer, heat gun, or heating pads when removing the adhesive pad. The heat can make it easier to remove stubborn residue.

We are delighted to announce that…

Harcourts Foundation NZ proudly supported Gumboot Friday for the third year, in 2024. With the successful fundraising efforts in 2022 and 2023
combined, the Harcourts network raised over $323,000 which made 2254 free counselling sessions available to Kiwi kids in need.
The impact of Gumboot Friday on the country has been astounding, and so has our network’s focus on raising funds and awareness for Kiwi kids struggling with their mental health. These children come from diverse backgrounds, families, and communities all over
New Zealand.

Time is running out – Healthy Homes Standards

As the 1 July 2025 deadline for compliance with the Healthy Homes Standards approaches, it’s crucial that all private rentals meet these requirements.
As a landlord, meeting these standards is not just a legal obligation, but a way to enhance the quality of your rental home.

By improving your property, you provide your tenants with warmer, drier, and healthier living environments, leading to better health outcomes and increased satisfaction with their rental experience.

If you haven’t already, now is the time to take action to comply with these standards.

Visit tenancy.govt.nz/healthy-homes/ for all the information you need.

Before moving:

• Giving Notice – Generally, tenants need to give at least 28 days’ written notice to end a periodic tenancy. The process is different for a fixed-term tenancy, make sure you know what is required before you start planning your move.
• Final Inspection – Make sure you understand from your property manager the process for the completion of the final inspection.
• Connections – Tenants should pay everything they need to and cancel or transfer any services connected to the property (e.g. electricity, gas and internet). Speak to your Harcourts property manager about utility connection service providers who may be able to assist you in a seamless transfer to your new home.
• Damage – If any accidental damage has occurred to the property during your tenancy, you should speak to your property manager about getting it fixed. You may have the benefit of the landlord’s insurance and you should get the item fixed before you vacate, thus expediting your bond refund.

Moving day:

• Moving – Tenants must remove all their belongings, but leave behind anything provided by the landlord, such as furniture and appliances.
• Cleaning – Tenants need to leave the property clean and tidy and take away all their rubbish.
• Keys – All keys, remotes or access cards must be returned to your property manager.

Bond refunds:

• To facilitate a quick bond refund, tenants need to ensure that the property is returned in the same condition as it was when they rented the property, with the exception of fair wear and tear. If any repairs or cleaning are required after vacating, this will slow down the release of the bond.

The government restores interest deductibility on investment properties

Updates on tax reform have been announced, with Associate Finance Minister David Seymour announcing that the government will reinstate deductibility for mortgage interest on residential investment properties.

The government will phase in interest deductibility on mortgage interest paid on residential investment properties. Landlords will be able to claim 80% of interest expenses from April 1 2024, moving to 100% from April 2025.

The modification to the interest limitation rule will be included in the Taxation (Annual Rates for 2023/24, Multinational Tax, and Remedial Matters Bill), which is currently undergoing review by a select committee.

The report on this bill is expected by 29 March 2024.

This announcement offers clarity for property investors seeking more precise details on the changes, especially for the 2023/2024 tax year. While some investors might be disappointed that the changes won’t take effect this fiscal year, this is being seen as positive news for property investors as it provides increased certainty and confidence in the market.

There is no such thing in the Residential Tenancies Act (RTA) as a month-by-month tenancy, however, we are sometimes asked to give a tenant a months’ notice, so let’s clear this up.

The closest thing to a month-by-month tenancy is a short fixed-term tenancy. However, if a short fixed-term tenancy exceeds 90 days, it is then deemed to be a periodic tenancy, and it was still a ‘fixed-term’. Most of the time residential property managers deal with either periodic, or fixed-term tenancies.

It’s very important to know the differences between a periodic tenancy and a fixed-term tenancy for both landlords and tenants, so that both parties understand their commitments under the RTA and the right type of tenancy is selected.

Periodic tenancy

A periodic tenancy agreement has no end date. It continues until either the tenant or the landlord gives written notice to end it. Landlords must use one of the prescribed reasons in the RTA, and the notice period is either a minimum of 63 or 90 days’ notice. A tenant on a periodic tenancy only has to give 28 days’ notice.

Fixed-term tenancy

A fixed-term tenancy agreement is for a set period – e.g., 12month term. There is no maximum length for a fixed-term tenancy and the length of the term must be included on the tenancy agreement.

You can’t ‘give notice’ to end a fixed-term tenancy before the end date of the fixed term.

Once a fixed-term ends, the tenancy will automatically become periodic unless the landlord gives notice using one of the prescribed reasons in the RTA. They must give the tenant a minimum of 63 or 90 days’ notice, regardless of the end date for the fixed term. The only proviso is that the notice period must not end before the end of the fixed term, but it can go past the end date.

The tenant must give at least 28 days’ notice to end the tenancy prior to the end of the fixed-term, if they want the tenancy to end on that date, or the tenancy will become periodic. Once a tenant is within 28 days of the end of the fixed term, it is treated as a periodic tenancy, and they are only required to give 28 days’ notice to vacate.

Ending a fixed term tenancy early

Generally, a landlord or tenant cannot give notice to end a fixed-term tenancy early. However, there are limited exceptions to this rule, and some other options available if the landlord or tenant wants to end a tenancy early.

Landlords and tenants can agree to end the tenancy early

Fixed-term tenancies can only be changed if the landlord and tenants agree. Any agreement must be in writing and include what’s been agreed to. If a tenant breaks their fixed-term and the landlord has to find another tenant, the landlord may charge a fee for ending the fixed-term early. These fees should only be their actual and reasonable costs. For example, the cost to advertise for new tenants. A tenant may request to assign their tenancy, and the request that must be considered by the landlord.

Withdrawal from a tenancy following family violence – Important

A tenant who experiences family violence during a tenancy can remove themselves from the tenancy by giving the landlord at least 2 days’ written notice in the approved form (with qualifying evidence of family violence) without financial penalty or the need for agreement from the landlord. This applies to both fixed-term and periodic tenancy agreements. Victims of family violence do not need to apply to the Tenancy Tribunal to end their tenancy.

Sadly, property managers are receiving applications for removal from tenancies using this provision in the RTA. Disclosing notice of withdrawal or accompanying qualifying evidence of family violence is an unlawful act, which may result in a penalty paid to the tenant of up to $3000, or a complaint to the Office of the Privacy Commissioner. We are therefore unable to provide the reason for termination to the remaining occupants or tenants. We can however provide the reason for termination to the landlord, but we still need to be careful with what information we disclose, in order to protect the tenants right to privacy.

Termination by notice for physical assault by tenant

A landlord can give written notice of at least 14 days in the approved form to terminate a tenancy, if the tenant has physically assaulted the landlord, the owner, a member of the landlord or owner’s family, or the landlord’s agent, and the Police have filed a charge against the tenant in respect of the assault. Landlords will need to provide qualifying evidence of the charge being filed.

Landlords and Tenants can apply to the Tenancy Tribunal

Severe hardship – landlord or tenant

If a landlord or tenant has an unexpected change in circumstances, they can apply to the Tenancy Tribunal to end the tenancy, however this can be a high bar to achieve, particularly for a landlord.

If the applicant will suffer from severe hardship if the tenancy continues, the Tribunal may decide to end the fixed-term early at a date the Tribunal determines is appropriate. For this to occur, the hardship of the applicant (if the tenancy continues) would need to be greater than the other person’s (if the tenancy ends early). The landlord and tenant should discuss the change in circumstances first and try to reach an agreement.

The tenant can also apply to the Tribunal to end the fixed-term early if their rent has increased by a large amount. The Tribunal may do this if the increase is an amount that:

• the tenant couldn’t have expected when they signed the tenancy agreement, and
• will cause them serious hardship.

Changes to body corporate rules

If a rental premises is part of a body corporate and there is a change to body corporate rules that negatively affects the tenant, they can apply to the Tenancy Tribunal to end the fixed-term tenancy early.

The Tenancy Tribunal may order compensation

When the Tenancy Tribunal elects to end a fixed-term tenancy early, it may also order compensation to be paid. The person wanting the fixed-term to end may have to pay compensation to cover any costs incurred by the person who didn’t want the tenancy to end.

What you need to know when putting your rental on the market for sale