Autumn 2016 Newsletter

The Residential Tenancies Amendment Bill – A look at the changes for landlords and tenants

The Residential Tenancies Amendment Bill was introduced to Parliament on 3 December 2015, and with it came a number of interesting proposed changes to the Residential Tenancies Act 1986. Two of the main aims of the Bill are: to improve the safety of residential rental properties by requiring smoke alarms and insulation in all residential rental properties and to make the process around abandoned rental properties more efficient.

Smoke alarms and insulation requirements

The proposed Bill would require a landlord to ensure that their residential rental property has working smoke alarms while making the tenant responsible for changing the alarm batteries and notifying the landlord of any faulty alarms.

The proposed Bill would further require underfloor and ceiling insulation. The requirement in respect of insulation splits residential rental properties into two categories; income-related rent tenancies and all other tenancies. An income-related rent tenancy generally refers to a property where the rent is based on the tenant’s income under the Housing Restructuring and Tenancy Matters Act 1992, but excludes boarding houses. For these income-related rent tenancies, insulation is required from 1 July 2016, while all other rental properties require insulation from 1 July 2019.

Under the proposed amendments a landlord is also required to provide information about the insulation of the premises in the tenancy agreement for the property.

This will include whether there is insulation and if so, the details of that insulation. The Bill proposes that a landlord commits an unlawful act if this information is omitted from the tenancy agreement or if the landlord knows the information is false or misleading.

Overall, the aim of these two requirements is to ensure the health and safety of the occupiers of a residential rental property without imposing excessive costs on a landlord.

 The process around abandoned rental properties

A rental property is an “abandoned rental property” where the tenant is in arrears and has left the property with no obvious intention of returning to it.

The current process under the Residential Tenancies Act 1986 for abandoned rental property cases can take up to six weeks. The Bill proposes a process which will take ten working days after an application is filed with the Tenancy Tribunal. Reducing the time to confirm abandonment of a tenancy will enable a landlord to re-tenant their property, which reduces the loss of rental income.

The Bill also proposes giving a landlord the right to enter the rental premises where the rent is at least 14 days in arrears and where the landlord has reasonable cause to believe that the tenant has abandoned the property. Furthermore, the Bill proposes that a landlord may enter the premises to confirm abandonment if notice has been given to the tenant no less than 24 hours prior to entry.

The Social Services Committee report on the Bill is due on 8 June 2016 which will take into account public submissions about the proposed changes.

 

The Health and Safety at Work Act 2015 – In force from 4 April 2016

In New Zealand, more than one in ten workers claim for a workplace injury each year. To address this, the new Health and Safety at Work Act 2015 (“the Act”) aims to make New Zealand’s work places safer, part of wide Health and Safety reforms ultimately hoping to reduce the workplace injury and death toll by 25 per cent by 2020.

What does it mean for workers?

The term “worker” is defined widely and includes, but is not limited to; employees, contractors and sub-contractors and their employees, labour hire company employees who have been assigned, students and volunteers.

Two key features affect workers:

  1. Provisions in the Act protect workers against discrimination and negative actions if they feel the need to raise a health and safety concern.
  2. The Act supports more effective engagement and participation with workers. This begins with consultations surrounding policies, and extends to practical, companywide obligations for every worker to abide by regulations and take reasonable care while in the work place.

What does it mean for business owners?

The Act introduces the term “person conducting a business or undertaking” (“PCBU”). This is another wide term which is intended to apply to a broad range of business arrangements.

Some key obligations of the PCBU are;

  1. To take “reasonably practicable” steps to ensure the health and safety of workers. These steps include ensuring that risks are minimised throughout the business; including the work place itself, its fixtures, materials, workers and tasks.
  2. To support and encourage worker participation in all aspects of the health and safety policies and their enforcement and – if requested by employees – appoint and train safety representatives. (The obligations surrounding representatives vary based on the size and nature of the business).

There will be a growing focus on enforcement, along with increased penalties for non-compliance. Any insurance that a company may hold against fines will also have no effect. No businesses, regardless of the size or level of risk are exempt from the obligations in the Act.

 What does it mean for Officers of PCBU’s?

An “Officer” includes, but is not limited to; directors of a company, partners of a partnership, and any person who

is in a position to exercise significant influence over the management of the business.

Officers will now be personally liable for failing to exercise due diligence in ensuring that the business is complying with health and safety regulations even if they were not directly involved in making the decision which contravenes the Act.

Interestingly, Peter Jackson recently resigned as Director of Weta Workshop, apparently due to the level of director involvement that this new Act will encourage. The increased level of personal liability is daunting for those directors who do not, or cannot take a hands-on approach.

When do the changes come into force?

This Act takes effect on the 4th of April 2016. Work Safe New Zealand will provide information on the new legislation to businesses in an attempt to make the transition as seamless as possible. You may choose to consult a lawyer for more specific advice if you think any of these changes may affect you or your business.

Updated agreement for sale and purchase of real estate

Recent changes to the widely used Agreement for Sale and Purchase of Real Estate prepared by the Auckland District Law Society and the Real Estate Institute of New Zealand include:

 

Snippets

 

McLeods Staff – Hanna Devlin

Hanna joined Mcleods Lawyers as a Trust Account Administrator in June 2015, after moving to New Zealand from Kent in the UK.

Hanna obtained a degree in law and criminology from the University of Manchester and went on to qualify as a barrister in the UK in 2011.

Since moving to Kerikeri in February 2015 she has completed the New Zealand law and practice exam, converting her law degree, and is currently undertaking the professional legal studies course in order to qualify as a New Zealand lawyer.

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.

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