Driven by significant legislative changes of late, the NZ rental market is seeing significant changes at the moment. For property owners and investors, navigating these changes within the confines of the Residential Tenancies Act and the more recent Healthy Homes Standards can feel a bit like a full-time job!
To provide clarity and professional insight, we sat down with our senior property management team to answer the most common, complex, and urgent rental property questions we receive from landlords across Aotearoa, New Zealand.
Q: What Is The Single Biggest Failure Point You See When Conducting Healthy Homes Assessments Now That The Compliance Deadline Has Passed?
The most common failure point we are seeing is often meeting the Heating Standard, more specifically, the calculation of minimum heating capacity. Many landlords incorrectly assume an existing heat pump is adequate without confirming its Kilowatt (kW) rating actually meets the specific requirements for the size and condition of the main living area.
Relying on old or undersized heat pumps or portable heaters usually results in non-compliance. Using the official Tenancy Services heating calculation tool for every property to ensure the fixed heating solution meets the precise minimum capacity required.
Q: If My Property Had New Ceiling Insulation Installed A Few Years Ago, Is That Enough?
The Healthy Homes Insulation Standard builds upon the existing insulation law that has been compulsory since 2019. Simply having insulation is not enough, it must meet the new required performance rating, or R-value.
For many older homes, even if insulation was installed five to ten years ago, it may need to be topped up or completely replaced to meet the standard. In some climate zones (especially Zone 3 in the lower South Island), the R-value requirements are higher. Plus, you must also ensure there is no damage, displacement, or dampness affecting the insulation.
Q: What Are The Risks Of Non-Compliance With NZ’s Healthy Homes Standards?
The risks of non-compliance are now much stricter (especially since the compliance deadline of the 1st July 2025 has now passed). Currently, the primary risk is a potential penalty fine of up to $7,200 per breach, according to Tenancy Services. Beyond financial penalties, non-compliance exposes you to two significant secondary risks; the first being Tenancy Tribunal Disputes, where a tenant can issue a 14-day notice to remedy a breach. If you fail to act, the tenant can take you to the Tribunal, which may order rent rebates (repaying rent for the period of non-compliance) in addition to fines.
The second being, insurance complications. Many landlord insurance policies now include clauses requiring Healthy Homes compliance. If you make a claim related to moisture, mould, or damage, and your property is found to be non-compliant with the ventilation or moisture/drainage Standards, your insurance company may decline the claim entirely. Which means compliance is now directly tied to protecting your asset.
Q: Are 'No-Cause' Periodic Tenancy Terminations Back Under The Residential Tenancies Amendment Act 2024 (RTAA)? What Are The New Rules?
Yes, the ability for landlords to end a periodic tenancy without providing a specific, statutorily defined reason has been reintroduced (effective from January 30 2025), but with the inclusion of strict notice periods.
According to the government’s Tenancy Services, landlords can now terminate a periodic tenancy using a 90-day notice period with no cause. This provides investors with the flexibility to manage their assets better, particularly if the tenant relationship is challenging but does not meet the legal criteria for specified breaches. It pays to note that this change is balanced by a corresponding change for tenants, who can now terminate a periodic tenancy with only 21 days’ notice (down from the previous 28 days).
Q: What About Fixed-Term Tenancies Under The RTAA? Do I Still Have To Offer A Reason To End A Fixed Term At Its Expiry Date?
No, you no longer need a reason to end a fixed-term tenancy on its expiry date, but you still need to be proactive. Fixed-term tenancies will still automatically convert to a periodic tenancy unless one of the landlord or tenant gives notice to end the tenancy between 90 and 21 days before the fixed term ends (no reason required), or both parties agree to a renewal or extension of the fixed term.
If you miss this window, the tenancy will automatically convert to periodic, and your tenancy agreement will revert to the 90-day no-cause notice rule.
Q: What Are The Shorter Notice Periods A Landlord Can Use For A Periodic Tenancy Under The Residential Tenancies Act (RTA)?
According to the RTA, there are still defined grounds allowing a landlord to use a 42-day notice period to terminate a periodic tenancy. These include, but are not limited to:
- Owner Occupancy: The owner or a member of the owner’s family requires the premises as their principal place of residence for at least 90 days. The owner must occupy the property within 90 days of the tenancy ending.
- Sale With Vacant Possession: The property has been sold, and there is an unconditional agreement for sale requiring vacant possession.
- Employee Use: The property is genuinely required for occupation by employees or contractors of the landlord, provided this purpose was specified in the current tenancy agreement.
Q: How Often Should I Conduct Routine Inspections On My Rental Property, And Is The Tenant Required To Be There?
Legally, a landlord or property manager can inspect a property no more frequently than once every four weeks (30 days). However, the common industry standard, and often a non-negotiable requirement of most Landlord Insurance policies, is an inspection every three months (quarterly). Failure to perform these inspections and properly document them can jeopardise your insurance coverage when making a claim for tenant damage or meth contamination.
It is important to note that tenants must be given a minimum of 48 hours’ written notice of the upcoming inspection. The tenant is not required to be present, but it is often encouraged as it facilitates open communication about minor maintenance concerns. Routine tenant property inspections typically last no more than 30 minutes.
Q: Who Is Responsible For Minor Repairs And Maintenance Items, Like Clearing Gutters Or Replacing Smoke Alarm Batteries?
Under the Residential Tenancies Act, the division of responsibility around minor repairs is generally divided as follows (for a more comprehensive list, see here):
Landlord Responsibilities: The landlord is responsible for keeping the property in a reasonable state of repair. This includes structural maintenance (roofing, foundations, plumbing), exterior maintenance (clearing gutters, downpipes, and drains), replacing, installing, and ensuring working smoke alarms and all costs associated with meeting the Healthy Homes Standards.
All new smoke alarms must:
- Be photoelectric
- Have a battery life of at least eight years, or be hard-wired
- Be installed according to the manufacturer’s instructions
- Meet international standards
*Existing smoke alarms do not need to be replaced if they are working, and have not passed the expiry date.
Tenant Responsibilities: Tenants are responsible for keeping the property reasonably clean and tidy, promptly notifying the landlord of any required repairs, and mitigating damage. This includes maintaining lawns and gardens (unless agreed otherwise), replacing the batteries in the smoke alarms (if applicable), and ensuring the property is adequately ventilated to prevent mould and dampness buildup.
Q: Does Landlord Insurance Cover Damage Caused By The Tenant?
Landlord insurance policies are highly specific and should not be confused with standard house and contents insurance. Most dedicated landlord policies cover tenancy-related risks that standard policies do not, but it is important to look at your individual insurance policy for specific details.
- Tenant-Caused Damage: Generally speaking, damage that is intentional or careless (classified as beyond "fair wear and tear" or deterioration not as a result of normal usage) is covered by Landlord Insurance.
- Loss Of Rent: If a tenant defaults on rent or if the property becomes uninhabitable due to tenant damage or an unlawful act, your Landlord Insurance should have provisions for this.
- Meth Contamination: Any costs associated with testing and decontamination in relation to meth contamination are usually covered by Landlord Insurance.
Keep in mind, insurance coverage often hinges on compliance and documentation. As mentioned, failure to meet Healthy Homes Standards or failure to conduct and document quarterly inspections may invalidate cover for tenancy-related claims. Always check your policy details and remember tenants should always have their own contents insurance to cover their personal belongings.
Maintaining documentation, conducting inspections, and ensuring legal compliance are no longer optional tasks for NZ property owners; they are the minimum requirements for safeguarding your investment and providing a quality home for your tenants. If you are concerned about your Healthy Homes compliance or need expert guidance on the new Residential Tenancies Act rules, reach out to The Rent Shop’s experienced property management team today!
Disclaimer: The information provided in this Q&A article is for general guidance only and is based on the Residential Tenancies Act 1986 and its amendments, as well as the NZ Healthy Homes Standards. This information should not be taken as legal advice. Property owners should always seek professional advice specific to their unique circumstances.
