KEY POINTS:
Residential tenants are in for stiffer penalties and the Tenancy Tribunal will be able to make awards against them of up to $50,000 under a tough revamp of renting rules.
Minister of Building and Construction Clayton Cosgrove outlined a much harsher regime for renters who break the law
at a Wellington Property Investors Association meeting this week.
The tribunal can now only impose sanctions of $12,000 but Cosgrove said this would soon be raised to $50,000.
A spokesman from the Department of Building and Housing said the higher penalties were necessary because it was 21 years since the tenancy law was passed.
Under the law, landlords seeking more than $12,000 from a tenant over unpaid rent, damage to property or other matters are forced to go through the courts to claim that money.
Cosgrove plans to introduce a draft amendment to the Residential Tenancies Act 1986 into the House later this year which will change that and he told the landlords that the new law would make it easier and faster to fix tenancy disputes.
But the new law will strengthen tenants' rights too, particularly over accidental property damage where a landlord will in future only get a month's rent.
Under the proposals, landlords suffering major property damage will be able to claim only four times the weekly rent if a tenant did not intentionally or recklessly wreck the property.
The bill has been forced to address what happens when a tenant damages a property, following the landmark Dunedin case where the court held tenants liable for fire damage to a property, Cosgrove said.
It was important to rectify the situation and prevent such an unfair event arising again, he said.
Feedback to the current act had found room for improvement in compliance, enforcement and dispute resolution, he said.
"There were concerns about the length of time taken to resolve disputes, together with cost, lack of appropriate sanctions and difficulties associated with enforcement processes and mechanisms," he told the landlords.
"The Government has proposed changes to the Residential Tenancies Act that will enable landlords to manage their properties more effectively while encouraging the development of a rental market that provides stable, quality housing to those who rent their homes."
Cosgrove said a draft Residential Tenancies Bill would enable the majority of tenancy disputes to be resolved quickly, fairly and cost effectively by lifting the Tenancy Tribunal's monetary jurisdiction to $50,000 from $12,000.
Landlords will also be able to claim against tenants for the cost of seeking money from them.
The act will allow them to recover "reasonable debt collection costs incurred in enforcing Tenancy Tribunal orders through a private debt collection agency," Cosgrove said.
It will also clarify who is responsible for outgoings like electricity, rates and water and introduce new rights of entry for appraisals by real estate agents and building inspectors.
Cosgrove said people were facing a lifetime of renting so landlords would become increasingly important.
New Broom
* Residential Tenancies Act about to be overhauled
* Government moots new rights for both sides
* Fast, fair and cheap dispute resolution is the aim