RTA Boarding Houses & Rent By The Room and Studio Rooms

Posted on Monday, March 3 2014

Residential Tenancies Act, Boarding Houses, Rent By The Room and studio rooms

During the last few years while the review of the Residential Tenancies Act has been taking place, the focus has not been on how the changes will affect landlords with boarding houses, studio and rent by the room tenancies. However now the dust has settled there are many landlords affected by these changes and many changes landlords need to implement.

BOARDING HOUSES S.66B:
The Residential Tenancies Amendment Act 2010 includes Boarding houses. They have their own Part – 2A consisting of 15 pages plus contents plus unlawful acts. Additionally most other sections also apply to boarding houses and the exceptions and interpretations are listed in section 66A

The definition of a boarding house under the act is residential premises

(a) Containing 1 or more boarding rooms along with facilities for communal use by tenants of the boarding house; and

(b) Occupied, or intended by the landlord to be occupied, by at least 6 tenants at any one time.

This does have ramifications on landlords who rent out properties by the room or have studio rooms with any area of communal use. If that property consists of 6 or more bedrooms, then it is deemed a boarding house under the act which means that the landlords have additional responsibilities.

A boarding house tenancy is a residential tenancy in a boarding house as set out above

(a) That is intended to, or that does in fact, last for 28 days or more; and

(b) Under which the tenant is granted exclusive rights to occupy particular sleeping quarters (not necessarily an entire bedroom) in the boarding house, and has the right to the shared use of the facilities of the boarding house.

A boarding room is a room in a boarding house that is used as sleeping quarters by 1 or more tenants of the boarding house, and that is for use only by a tenant whose tenancy agreement relates to that room

TENANCY AGREEMENTS S.66C:
Form and content
Boarding house tenancy agreements are required to contain the same detail as other residential tenancy agreements with the addition of the following:

A statement of whether the tenancy is intended to last for 28 days or more

1 or more telephone numbers at which the landlord may be contacted by the tenant at any reasonable time

The room number of the boarding room to which the tenancy agreement relates

A statement as to whether the boarding room that the tenant is renting is shared by other tenants and, if so, the maximum number of other tenants who may occupy the room

A statement of whether the tenancy is a joint tenancy and, if so, the names of the other people who will occupy the boarding room under the tenancy agreement

A statement of the service (if any) to be provided by the landlord

If the premises are managed by a person other than the landlord, the name and contact address (which much include a telephone number) of that person

A description of the fire evacuation procedures that apply to the premises.

A boarding house tenancy agreement may, in addition, provide for the tenant to supply the name and contact details of a contact person (for the purpose of sections 62 to 62b and 66x)

BONDS S.66D:

Bonds are now required to be lodged with the chief executive (tenancy services) when more than one weeks worth of bond is collected. Where less than one weeks worth of bond is collected then the bond does not have to be lodged, however a full receipt must be issued to the tenant detailing the address of the premises to which payment relates, the amount and nature of the payment, the date of the payment and the name of the payer, providing the name is known to the person who receives the payment.

OUTGOINGS S.66E:
The landlord is responsible for all outgoings in respect of the boarding house that are incurred whether or not the boarding house is occupied; or for common facilities; or in respect of rooms that are occupied by more than one tenant. If the landlord provides services to a tenant, and payment for those services is not included in the rent, the landlord must provide the tenant each week with an itemised account of the services provided and the amount payable by the tenant.

A tenant is responsible for all outgoings that are exclusively attributable to the tenant’s occupation of a room that is exclusively occupied by the tenant.

BOARDING HOUSE TENANCY IS NOT ASSIGNABLE BY THE TENANT S.66F:

A boarding house tenancy is not assignable by a tenant.

LANDLORDS OBLIGATIONS AT THE START OF THE TENANCY S.66H:
When the tenant enters into a boarding house tenancy agreement, the landlord must give the tenant: A copy of the current house rules and a list of any services together with their costs that are provided by the landlord and not covered by the rent.

When the tenant first takes occupation of a boarding room under a boarding house tenancy, the landlord must ensure that the tenant has vacant possession of the room or the sleeping quarters within a shared room, that the room is in a reasonable state of cleanliness and there are no legal impediment to the tenant’s occupation of the room

ONGOING OBLIGATIONS OF THE LANDLORD 66I:

Many of the ongoing obligations are similar to that of other residential tenancies with special note of ensuring the facilities are in a reasonable state of cleanliness ongoing, however in addition the landlord must ensure that copies of the house rules and fire evacuation procedures are on display in the premises at all times and the landlord must take all reasonable steps to ensure that the house rules are observed, and to enforce them in a fair and consistent manner.

CHANGING LOCKS 66J:
Before changing any lock or similar device, the landlord must tell every tenant of the boarding house who will be affected by the change.

HOUSE RULES 66O:

The landlord of a boarding house may make house rules relating to the use and enjoyment of the premises and the provisions of services. No house rule may be inconsistent or contravene this or other acts such as Human Rights Act 1993 or the Privacy Act 1993.

The landlord may make changes to the house rules, however the new house rule does not come into effect until the landlord has given each tenant of the boarding house at least 7 days written notice of the new house rule.

A tenant may make an application to the tenancy tribunal to have the rule declared unlawful and the tenancy tribunal may require the landlord apply the house rule in a particular manner, vary the rule or set the rule aside.

LANDLORDS RIGHT TO ENTER A BOARDING HOUSE S.66Q:

The landlord has the right to enter the boarding house at any time. The landlord must not use the facilities of the boarding house for his or her own domestic purposes unless the landlord resides at the boarding house.

ENTERING A BOARDING ROOM S.66R:

The landlords right to enter a boarding room is limited. The landlord can enter with consent of the tenant or one of the tenants if occupied by more than one, given freely at or immediately before, the time of entry or if the landlord believes on reasonable grounds there is a serious risk to life or property and entry is necessary to reduce risk or save life or property. The landlord may also enter if services are provided which requires the landlord to enter the room to provide them, however the entry must be in accordance to the conditions in the tenancy agreement or house rules.

The landlord may also give the tenant or any tenant if occupied by more than one, at least 24 hours notice before the entry orally or in writing. The reason for entering the room must be in accordance with the act. A landlord who uses or threatens to use force to gain entry into a tenant’s room except in the case of serious risk to life or property commits an offence and is liable to imprisonment for a term not exceeding 3 months or to a fine not exceeding $2,000.

TERMINATION OF A TENANCY BY THE LANDLORD S.66U:

A landlord can terminate a boarding house tenancy immediately, if the tenant has:
Caused or threatened to cause serious damage, disruption or endanger to people or property

A landlord can terminate a boarding house tenancy on 48 hours notice if the tenant has not paid arrears set out in a notice by the landlord not less than 10 days previously, the tenant is using the premises for illegal purposes, the landlord believes the tenant has abandoned the room.

A landlord can terminate a boarding house tenancy on 14 days notice if the tenancy is also a service tenancy S.55 applies

A landlord can terminate a boarding house tenancy on 28 days notice if no reason is given.

In all cases the form and content of the notice must comply with S.66U(2)

TENANT TERMINATING A TENANCY S.66V:

A tenant of a boarding house tenancy may terminate that tenancy with 48 hours notice to the landlord and that notice does not need to be in writing.

TERMINATION OF TENANCY ON DEATH OF SOLE TENANT 66W:

A boarding house tenancy terminates 48 hours after the death of a sole tenant under the tenancy.

ABANDONMENT BY TENANT S.66X:
Providing the tenant is in arrears with the rent and the landlord believes the tenant has vacated the premises, the landlord may put a notice on the door of the boarding room, advising the landlord will enter the room 24 hours later to confirm whether the tenant has abandoned the tenancy and must make all reasonable efforts to contact the contact person (if any) identified in the tenant’s tenancy agreement.

Once confirmed the landlord can terminate the tenancy by attaching a further notice on the door stating the tenancy will terminate no less than 48 hours later including the date and time.

A tenant commits an unlawful act if, without reasonable excuse, he or she abandons the premises when the rent is in arrears.

RENT INCREASES S.24:
A rent increase cannot take effect until 28 days after the notice of a rent increase has been given.

TRANSITIONAL PROVISIONS

There are a number of transitional provisions set out in the principal act which are brought into force with the commencement of the amendments in relation to boarding houses. These are too many to outline here but can be referred to via section 9(2) and (3) of the principal act and read in conjunction with Section 93 (5) of the Residential Tenancies Amendment Act 2010.

A couple to note…

BONDS
Any bond held of more than one weeks rent must be forwarded to the chief executive (tenancy services bond centre) in the prescribed form signed by the landlord and the tenant within 23 working days of the commencement of the amendments to the act. The landlord must also ensure a receipt has been provided to the tenant detailing the address of the premises to which payment relates, the amount and nature of the payment, the date of the payment and the name of the payer, providing the name is known to the person who receives the payment.

Where a bond is held of less than one weeks rent, the landlord must ensure a receipt has been provided to the tenant detailing the address of the premises to which payment relates, the amount and nature of the payment, the date of the payment and the name of the payer, providing the name is known to the person who receives the payment. This bond is not required to be paid to the chief executive (tenancy services bond centre)

TENANCY AGREEMENTS

The required detail provided on a boarding house tenancy agreement does not apply to existing tenancies

OUTGOINGS
Clause 66E details the direct split of outgoings between boarding house tenant and boarding house owners. This does not apply to existing tenancies at the commencement of the amended act.

This information is provided as an introduction into the changes brought about by the Residential Tenancies Amendment Act 2010 and the actual act should be referred to for the full information.

Tania & Kyle Elmer
Mana Property Management Ltd / www.ManaProperty.co.nz

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Expert's Bio

Tania & Kyle Elmer

Tania & Kyle Elmer are active investors with a large portfolio of properties in Dunedin and Central Otago and mentor investors in the techniques used to grow wealth through property investing. Kyle and Tania are Co-directors of the Leading Property Mangers of New Zealand (LPMNZ). Kyle is a past president of the Otago Property Investors Association (OPIA). They founded Mana Property Management Ltd to provide specialist management services to Discerning Landlords dealing in the quality end of the market. www.ManaProperty.co.nz | Find Kyle on Google+

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