Signing away rights under the Act

In New Zealand, tenancy agreements must comply with the Residential Tenancies Act (RTA). Any clauses included in a Tenancy Agreement that conflict with the Act or diminish a tenant’s rights are unenforceable. In some cases, including such clauses may even be considered an unlawful act. As a common legal phrase states, “You cannot contract out of the Act.”

What Does This Mean for Tenants and Landlords?

At the time of signing a Tenancy Agreement:

• Neither the landlord nor the tenant can agree to clauses that reduce or evade the rights and responsibilities outlined in the RTA.
• Such clauses will have no legal standing and cannot be enforced.

However, during or at the end of a tenancy, both parties can mutually agree to terms that benefit one or both, provided they do not infringe on the tenant’s rights. For example:

• A landlord may give 63 days’ notice to move back into the property as required under the RTA for periodic tenancies.
• A tenant may then choose to give 28 days’ notice to leave earlier, or both parties can agree to reduce this period further if mutually beneficial.

Common Pitfalls and Examples

1. Reduced Notice Periods:
   • If a landlord includes a clause in the agreement requiring only 28 days’ notice to vacate instead of the legal 90 days, this clause is unenforceable.
   • Even when renting to family or friends, tenants retain their rights under the RTA, which can lead to disputes if landlords rely on such clauses.
2. Flatmate Agreements:
   • Renting out a granny flat or similar dwelling under a flatmate or house-sharing agreement may still fall under the RTA if the flatmate is deemed a tenant (e.g., they do not share household facilities or the dwelling lacks council consent).
   • The Tenancy Tribunal may enforce the RTA regardless of the signed agreement.
3. Maintenance and Reduced Rent:
   • Landlords cannot trade maintenance responsibilities for lower rent. For example, offering cheap rent in exchange for no maintenance violates Section 45 of the RTA.
   • Such arrangements can lead to significant penalties, including compensation for the tenant and work orders to address maintenance issues.

What Landlords Cannot Do

Landlords cannot:

• Require tenants to do more than the RTA allows.
• Remove or reduce tenant rights.
• Evade their own obligations under the Act.

Consequences for Non-Compliance

Attempting to contract out of the RTA can lead to:

• Penalties payable to the tenant plus compensation.
• Work orders issued by the Tenancy Tribunal (up to $100,000).
• Infringement notices from the Ministry of Business, Innovation and Employment (MBIE).

What may initially seem like a convenient arrangement can quickly become a legal and financial burden for landlords when tenants exercise their rights under the RTA.

Protecting Your Rights

Tenants cannot sign away their rights, and landlords cannot enforce agreements that violate the RTA. If you’re unsure about clauses in a Tenancy Agreement or have concerns about your rights, consult us for a professional advice.