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Amendment to Residential Tenancies Act – Part two – Unlawful Dwellings

11

September

2017

Amendment to Residential Tenancies Act – Part two – Unlawful Dwellings

In part two of our review of the Amendment to the RTA we look at Unlawful Dwellings, covered in the Act by section S56A which deals with termination of a tenancy where a property is considered to be unlawful.

Firstly, what are some examples of an unlawful dwelling…

    1. A dwelling without a consent, such as a small cottage or garage
    2. A dwelling which is being used for permanent human residence, where a building consent has been issued, but which is not designed or approved for permanent human residence, e.g. Garage converted to a home
    3. A dwelling without a code of compliance to be rented separately to the major dwelling on the site, e.g. Granny flat
    4. A dwelling with a building consent for human residence, subject to restrictions, but has added facilities such as kitchenette with tub or wired in stove – e.g. large property converted or split into several units
    5. A dwelling with a building consent but the owner has added rooms so part of the dwelling is unlawful – g. a deck area that has had walls added and been clad to add another room.

Orders of the Tenancy tribunal relating to unlawful dwellings are dealt with under Section 78 of the act.

Where the tenant cannot lawfully live in the dwelling and the landlord is in breach of the Act, either by not complying with all building health and safety requirements or legally is not allowed to tenant the property, the tenant cannot be charged rent.
There are several instances if cases at the tenancy tribunal where landlords have had to repay some rent collected.

The amendment (likely to be passed into law later this year) goes much further when dealing with unlawful dwellings in the following ways…

  1. It will ensure that the tenancy tribunal cannot make any award of rent – therefore if the tribunal agrees that a dwelling is unlawful all rent paid would have to be repaid to the tenant.
  2. The amendment also allows for an order of compensation to the tenants, and any damage caused by the tenant would not be able to be claimed by the landlord.
  3. Further, the tenancy tribunal also has the power not to make an order for termination – thus meaning that if a tenant falls into rent arrears, then a tenant could stay on, not paying rent, until a landlord makes a fresh application for termination based on the dwelling being unlawful.
  4. The tenancy tribunal is not concerned with landlord’s finances, and can make an order up to $50,000 to force a landlord to make an unlawful dwelling lawful.

Given the extent of the claims that can be made against the landlords, it’s imperative that all property owners ensure their rental property is indeed lawful. A recent case adjudicated by the Tenancy Tribunal outlines the potential issues for landlords http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11915184

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