A well-written tenancy agreement is the foundation of a successful rental relationship. It sets out the rights and responsibilities of both the landlord and tenant, ensuring transparency and compliance with New Zealand’s rental laws.
This article explains how to create a strong tenancy agreement, what it must include, and how to customize it to meet your property’s specific needs.
What is a Tenancy Agreement?
A tenancy agreement is a legally binding contract between a landlord and tenant. It outlines the terms and conditions of the tenancy and is required by law under the Residential Tenancies Act 1986 (RTA).
There are two main types of tenancy agreements:
- Periodic Tenancy: Ongoing until either party gives notice to end it.
- Fixed-Term Tenancy: Has a set start and end date, with conditions for renewal or termination.
Why is a Tenancy Agreement Important?
A clear tenancy agreement:
- Protects both parties by defining their roles and responsibilities.
- Reduces the likelihood of disputes by establishing agreed terms upfront.
- Ensures compliance with the RTA, preventing potential fines or legal issues.
What to Include in a Tenancy Agreement
The RTA specifies mandatory information that must be included in a tenancy agreement. Use the Residential Tenancies (Form of Tenancy Agreement) Regulations 2010 as a guide to ensure compliance.
1. Essential Information
- Names and contact details of the landlord and tenant.
- Address of the rental property.
- Start and end dates (for fixed-term tenancies).
- Rent amount, payment method, and frequency (e.g., weekly, fortnightly).
- Bond amount and whether it has been lodged with Tenancy Services.
2. Healthy Homes Compliance Statement
- From 1 July 2021, landlords must include a statement outlining whether the property meets the Healthy Homes Standards. If the property is not yet compliant, you must specify the planned compliance date.
3. Rights and Responsibilities
Outline key landlord and tenant obligations, including:
- Maintenance responsibilities.
- Rules about quiet enjoyment and privacy.
- Notice periods for inspections or ending the tenancy.
4. Additional Clauses
Include property-specific terms, such as:
- Pet Policies: State whether pets are allowed and under what conditions.
- Lawn and Garden Maintenance: Specify who is responsible for upkeep.
- Use of Property: Rules about smoking, subletting, or unauthorized alterations.
Ensure additional clauses do not conflict with the RTA. For example, you cannot include terms that:
- Waive the tenant’s rights under the law.
- Require tenants to pay more than four weeks’ bond or two weeks’ rent in advance.
Customizing Your Tenancy Agreement
While a standard tenancy agreement template is a good starting point, customizing it ensures it reflects the unique aspects of your property.
Examples of Custom Clauses:
- Shared Facilities: Rules for using shared spaces like driveways or laundry rooms in multi-unit properties.
- Utilities: Specify whether utilities (e.g., water or internet) are included in the rent or billed separately.
- Appliance Use: Clarify responsibility for maintaining or replacing provided appliances.
Always review custom clauses with a lawyer or property manager to ensure they are legally enforceable.
Signing and Storing the Agreement
- Provide Copies: Both the landlord and tenant must sign the agreement and receive a copy before the tenancy begins.
- Store Securely: Keep a signed copy of the agreement in a safe place. Consider digitizing it for easy access.
- Use Tenancy Services Tools: Landlords can use online tools provided by Tenancy Services to ensure compliance and streamline record-keeping.
Common Mistakes to Avoid
- Missing Key Information: Omitting mandatory details like the rent amount or Healthy Homes Compliance Statement can result in fines.
- Unclear Clauses: Vague or ambiguous terms can lead to disputes. Be specific and use plain language.
- Unlawful Clauses: Avoid including terms that breach the RTA, as they won’t be enforceable.
- Verbal Agreements: Always put agreements in writing to avoid misunderstandings.
What to Do if Disputes Arise
If a dispute occurs over the tenancy agreement, the first step is to communicate with the tenant to resolve the issue. If this fails, mediation through Tenancy Services or a hearing with the Tenancy Tribunal can provide a resolution.
Practical Tips for Landlords
- Use Approved Templates: Start with the template provided by Tenancy Services and adapt it as needed.
- Seek Professional Advice: Consult a lawyer or property manager if you’re unsure about any clauses.
- Review Regularly: Update your agreements to reflect changes in the law or your property’s circumstances.
- Be Transparent: Ensure tenants fully understand the terms of the agreement before signing.
A strong tenancy agreement is the cornerstone of a positive and legally compliant rental relationship. By including all required information, customizing where necessary, and ensuring clarity, you can protect your investment and foster a professional relationship with your tenants.