Lots of landlords around New Zealand like to use a fixed term tenancy. The perceived benefits of the fixed-term is that it gives a landlord some assurance that their property will be occupied for a fixed period of time, guaranteeing them rent. Likewise, many tenants also like the idea of the fixed-term as they know that their tenancy is secure during that period of time. If the landlord sells, the purchaser has to honour the fixed-term tenancy agreement.
Fixed term tenancies are especially appealing to landlords who own student properties as they can structure the fixed term around the student year. However, recent changes in legislation have put the future of the fixed term tenancy in doubt, as has the somewhat flawed decision to leave fixed-term tenancies out of the scope of some of the more recent changes to the Residential Tenancies Act in regards to protecting landlords against antisocial tenants.
This was highlighted in a recent Tenancy Tribunal case in the Waikato. A property management company had been dealing with a tenant whose behaviour was clearly causing problems that fitted the description, ‘antisocial’. There was an array of antisocial incidents that included the following:
- Loud music with evidence that Hamilton City Council had visited the property on several occasions with complaints to noise control.
- Rubbish and littering.
- Taking car parks that were allocated to neighbours.
- Incidents of disorderly behaviour such as family violence and loud tussles that the police were called out to.
- Drug use.
- Threatening and intimidating behaviour towards other tenants.
All of this was proven by the property management company; one would have thought that this really was an open and shut case. But no, the adjudicator dismissed the case.
How can this be?
Let’s look and see what the law states.
Antisocial behaviour is covered in the new section 55A of the Residential Tenancies Act.
When you look at this section, the landlord has to do the following if antisocial behaviour is occurring. Firstly, the landlord must send notice to the tenant describing what behaviour is considered to be antisocial as well as who, if known, has engaged in it. The notice must also advise the tenant of the date and the approximate time of the behaviour.
If three notices are issued during a ninety day period, then the landlord can apply to the Tenancy Tribunal for termination of the tenancy. If the landlord has sufficient evidence that antisocial behaviour has occurred at the premises, then the adjudicator shall issue an order terminating the tenancy.
All of this took place in the Waikato case and the adjudicator even acknowledges this in the ruling. So why was the case dismissed?
For some reason only known to law makers at the Ministry of Housing and Urban Development, this section only applies to periodic tenancies. Can someone please explain to me the logic behind this?
It does not stop there. The three strike rule for rent arrears, when a tenant is five working-days in arrears on three separate occasions during a ninety day period, also only applies to periodic tenancies and not Fixed-terms. In the aforementioned case, you could have argued that the behaviour demonstrated by the tenants went beyond antisocial. Under section 55 of the Residential Tenancies Act, you can apply for termination of the tenancy if the tenants have assaulted or threatened to assault any occupier of any building which the premises constitutes to be a part of. This also includes any neighbour of the premises as well.
It is hugely disappointing that this technicality, whether through intention or oversight, has occurred. It has put the property management company in a precarious position. Do you continue to manage the property, and can you guarantee the safety of the tenants? One has to feel for the owner as well. If this company does not want to manage the property, who would be prepared? And who can blame anyone for not wanting to manage it?
However, the biggest losers in all of this are the tenants’ neighbours. They must be scratching their heads as to how these antisocial yobs have not been evicted.
So, just be wary of the small technicalities that can bite you. Here at Tommy’s Property Management, our team undertakes regular training with regards to the Residential Tenancies Act. You can rest assured that we know what we are doing.
As always, feel free to get in touch with the team at Tommy’s Property Managment if you have any questions regarding your rental properteis or want to learn more about expanding your portfolio. Check out tommysrentals.co.nz
Harrison Vaughan
Director