Derelict landlords face stiff penalties

The law governing landlords, tenants and rental property is about to change.

Amendments to the Residential Tenancies Act have been tabled in Parliament and will come into force on August 1.

The changes bring stiffer penalties for landlords, more rental properties under the act and alter the law about who pays the letting fee.

The Residential Tenancies Amendment Bill seeks mainly to bring boarding house tenancies under the auspices of the act and therefore under the jurisdiction of the Tenancy Tribunal, the state agency which deals with disputes that tenants and landlords cannot sort out between themselves.

But it has other amendments as well - including the introduction of exemplary damages - which will affect residential tenancies.

About 315,000 houses, flats, apartments and units are rented, 230,000 owned by the private sector, 70,000 by the state and 15,000 by local authorities.

ASB Bank estimates that private property owners have $42.5 billion invested in the sector, making it our second most popular form of investment after managed funds.

Muriel Newman, Act's housing spokesman, said last month that of the 42,000 applications last year to the Tenancy Tribunal, 92 per cent were filed by landlords against their tenants.

Changes to the act include:

* Boarding houses will fall under the act, which is expected to mainly benefit tenants.

* Landlords who fail to keep premises in a reasonable state of cleanliness or repair will face tougher penalties.

* Letting fees will be payable by the landlord, not the tenant.

* Landlords will pay wastewater charges in places where this is metered, making this of particular interest to Auckland landlords.

* The time landlords and tenants have to claim bond money at the end of a tenancy will be restricted.