Tenancy Terminations Update - Residential Tenancies Act 2024
Last year, the Government announced the Residential Tenancies Amendment Act 2024. The first set of changes took effect last year with updates to the bond processes allowing online lodgements and some updates.
As of 30th January this year, some of the more impactful changes have taken effect. These relate to termination of tenancies. These updates reverse some of the provisions made by the previous labour government and below is a summary of the changes and what they mean to you as rental property owners:
1. Landlords are now able to give notice to end a tenancy without giving a reason – previously a landlord could only terminate a tenancy under specific circumstances (such as selling or moving into a property). This change means a 90 day notice can be issued to end a tenancy, without giving a reason.
The use of a no reason 90 day notice has often been fairly limited in the past and we expect that this will be the case again. The option to issue a notice without giving a reason might be necessary in some cases which would be something to explore on a case by case basis.
2. The notice period for ending a tenancy when a landlord needs to move into a property, or when a property has been sold has been reduced to 42 days. Previously these were 63 days and 90 days respectively.
Please note these notice periods are the minimum so owners can choose to give more notice if they wish to. The changes will impact the turnaround for tenants needing to find new accommodation so some consideration should be given for this.
3. Landlords can now give notice to end a fixed term tenancy, at the expiry of the fixed term*. This notice must be issued between 90 and 21 days prior to the end of the fixed term. Previously landlords were unable to end a fixed term tenancy without one of the reasons stated above.
Being able to end a tenancy at the end of a fixed term if tenants don’t want to sign a new lease has historically been an advantage for property owners in Wellington. It has meant they could retain a level of control over when the property was re-marketed - normally aiming for the peak summer period between November and February. No doubt this will be something to consider again, however we have seen over the past few years that a lot of tenants have taken up periodic tenancies and there has been a slight spread of demand over the year rather than a big focus on those summer peak months.
*Please note a condition in the law means this change does not apply to fixed term tenancies that were started on or after the 11th February 2021 and expire before 30th April 2025. These tenancies remain under the previous rules.
4. Tenants notice period has been reduced from 28 to 21 days.
Given this change, there will be more focus on ensuring the turnaround between receiving a notice and re-marketing the property is as short as possible in order to try and avoid a vacancy period. Retaining tenants on a fixed term will give much better options for property owners, however a periodic tenancy is obviously useful for some owners and tenants depending on their circumstances.
A full breakdown of the RTA Amendment Act 2024 can be found on the tenancy services website here. There are further updates coming into effect as of the 20th March 2025 which are more around technical changes. The final element of the RTA Amendment Act relates to pet consent and pet bonds but as of yet no date has been set for these to be introduced. We will be keeping you updated as soon as we have more details around this.
If you have any queries around any aspect of the legislation updates please contact us and we would be happy to discuss any queries you may have.