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New Zealand's tenancy law landscape has undergone substantial changes in recent years, fundamentally altering the landlord-tenant relationship and creating new obligations, restrictions, and compliance requirements for property investors. From healthy homes standards to rental bidding restrictions, periodic tenancy changes to rental increase limitations, the regulatory framework governing rental properties has evolved dramatically.
At Luminate Financial Group, we help property investors navigate this evolving compliance landscape, ensuring they understand their obligations and maintain full compliance with current requirements. Many landlords struggle to keep pace with regulatory changes, creating risks of non-compliance penalties, tribunal claims, and reputational damage.
Understanding current tenancy law isn't optional for property investors – it's a legal requirement with significant consequences for non-compliance. Ignorance of the law provides no defense against penalties or claims. Staying informed about your obligations as a landlord protects your investment, prevents costly disputes, maintains good tenant relationships, and ensures you can legally rent your properties.
Let's explore the key tenancy law requirements and recent changes every New Zealand landlord must understand in 2025.
Important Disclaimer: Tenancy law is complex and changes regularly. This article provides general information current at the time of writing but may not reflect the latest changes. Always consult Tenancy Services, legal professionals, or property management experts for advice specific to your circumstances and current requirements.
Healthy Homes Standards: The Foundation Requirement
Healthy homes standards represent the most significant tenancy law change in recent years, establishing minimum standards for insulation, heating, ventilation, moisture and drainage, and draught stopping.
What the Standards Require
Insulation Standards: All rental properties must have ceiling and underfloor insulation meeting prescribed R-values that vary by location and climate zone. Insulation must be in good condition without gaps, damage, or deterioration.
Heating Standards: Properties must have fixed heating capable of heating the main living room to at least 18°C. Acceptable heating types include heat pumps, enclosed burners, or fixed electric heaters meeting specific capacity requirements. Portable heaters don't satisfy the standard.
Ventilation Standards: Properties must have opening windows in bedrooms, living rooms, dining rooms, and kitchens meeting specified sizes. Kitchens require extractor fans. Bathrooms require extractor fans or openable windows.
Moisture and Drainage: Properties must have efficient drainage, proper guttering and downpipes, and no obvious signs of serious dampness, mould, or water damage from the subfloor.
Draught Stopping: Properties must have unused open fireplaces blocked, ceiling and wall loft hatches sealed, and gaps around windows and doors minimized.
Compliance Deadlines and Requirements
All rental properties must comply with healthy homes standards. Private landlords had until 1 July 2024 to ensure compliance. Boarding houses face similar requirements with some variations.
Documentation and Record Keeping
Landlords must provide tenants with statements confirming healthy homes compliance within 28 days of tenancy commencement. Statements must specify how properties meet each standard including insulation details, heating information, and ventilation specifications.
Maintain records documenting compliance including insulation certificates, heating installation documentation, photographs showing compliance, and professional assessment reports if applicable.
Non-Compliance Consequences
Penalties: Landlords failing to comply face fines up to $7,200 for unlawful acts. Tenants can apply to Tenancy Tribunal for exemplary damages if properties don't meet standards.
Unable to Legally Rent: Non-compliant properties cannot be legally rented, creating vacancy and lost income until compliance is achieved.
Tribunal Orders: Tribunals can order landlords to undertake work to achieve compliance, pay compensation to tenants, or both.
How to Ensure Compliance
Conduct Compliance Assessments: Have properties professionally assessed against healthy homes standards to identify any gaps requiring remediation.
Undertake Required Work: Budget for and complete any necessary work including installing or upgrading insulation, installing compliant heating systems, adding or upgrading extractor fans, addressing moisture or drainage issues, and blocking fireplaces or sealing loft hatches.
Document Everything: Keep comprehensive records proving compliance with receipts for work completed, certificates from installers, photographs showing compliant features, and professional assessment reports.
Provide Statements to Tenants: Issue healthy homes compliance statements within 28 days of tenancies commencing. Tenancy Services provides template statements.
Regular Reviews: Periodically reassess properties to ensure ongoing compliance as standards or property conditions change.
Rental Bidding Ban
The rental bidding ban prohibits landlords and property managers from soliciting or accepting rental offers above advertised rent, preventing rental bidding wars that drove rents upward in tight markets.
What's Prohibited
Landlords and agents cannot encourage tenants to offer rent above advertised amounts, accept offers of rent higher than advertised rent, or conduct any process resembling auctions or competitive bidding for rental properties.
The ban applies to all private residential tenancies and boarding houses.
What's Allowed
Landlords can negotiate rent decreases from advertised amounts, advertise properties without specifying rent and negotiate with prospective tenants, or advertise rent as "negotiable" and engage in good faith negotiations.
Compliance Requirements
When advertising properties, state clear rent amounts or mark as "negotiable" if open to discussion. Never suggest tenants could secure properties by offering higher rent or create competitive situations where multiple applicants bid rent upward.
Property managers must understand and comply with bidding ban requirements. Ensure your property management agreements address this.
Non-Compliance Consequences
Violating rental bidding ban rules can result in Tenancy Tribunal claims, exemplary damages awards, reputational damage, and regulatory scrutiny from Tenancy Compliance and Investigations Team.
Periodic Tenancy Changes
Significant changes to how periodic tenancies work affect landlords' ability to end tenancies and increase rent.
Notice to End Periodic Tenancies
Landlords can only end periodic tenancies for specific reasons including selling property with unconditional sale agreement, landlord or family members requiring property for personal use, property being substantially redeveloped or demolished, or property ceasing to be used as rental.
The previous ability to end periodic tenancies without stated reasons no longer exists. Landlords must have legitimate grounds and provide proper notice periods (typically 90 days).
Fixed-Term Tenancy Transitions
Fixed-term tenancies automatically become periodic at the end of terms unless landlords properly exercise one of the limited grounds to end tenancies or tenants give notice to leave.
Landlords cannot refuse to renew fixed terms simply because they want different tenants or prefer fixed-term certainty. Fixed terms ending don't create opportunities to remove tenants without proper grounds.
Implications for Landlords
These changes significantly reduce landlords' ability to remove tenants, even when tenancies are periodic. Selecting quality tenants initially becomes even more critical since removing problematic tenants who aren't breaching tenancy agreements is now very difficult.
Compliance Requirements
Understand legitimate grounds for ending periodic tenancies and only issue termination notices when proper grounds exist. Provide required notice periods (typically 90 days). Follow proper notice procedures and documentation requirements. Be prepared to demonstrate legitimate grounds if challenged.
Rental Increase Restrictions
Rules governing rental increases limit how frequently rent can be increased and require proper notice procedures.
Frequency Limitations
Rent can only be increased once every 12 months. The 12-month period runs from the last rent increase (or tenancy commencement if rent hasn't previously increased).
Attempting to increase rent more frequently than annually constitutes unlawful behavior subject to tribunal claims and penalties.
Notice Requirements
Rent increases require 60 days' written notice using proper forms. Notices must specify exact new rent amounts and commencement dates.
Verbal notices don't satisfy legal requirements. Insufficient notice periods invalidate rent increases, meaning rent cannot lawfully increase until proper notice is provided.
Market Rent Principles
While no specific caps limit rent increase amounts, increases must result in rent at or below market rent. Tenants can challenge rent increases at Tenancy Tribunal if they believe new rent exceeds market rent.
Tribunals assess whether rent is at or below market rent, considering comparable properties, location, condition, and amenities. If tribunals find rent exceeds market rates, they can order reductions.
Compliance Requirements
Track rent increase timing carefully, ensuring 12 months elapse between increases. Use proper notice forms from Tenancy Services. Provide full 60 days' notice. Ensure increased rent reflects reasonable market rent, not excessive amounts. Document market rent research supporting increase amounts.
Bond and Rent Collection Requirements
Strict rules govern bond amounts and timing, plus rent payment requirements.
Bond Limits
Bonds cannot exceed four weeks' rent. If weekly rent is $500, maximum bond is $2,000. Requesting excessive bonds constitutes unlawful behavior.
Bond Lodgement Timing
Bonds must be lodged with Tenancy Services within 23 working days of receipt. Missing this deadline creates liability and complicates enforcement.
Ensure systems exist to lodge bonds promptly. Bonds not properly lodged become difficult to recover through Tenancy Services, potentially resulting in complete loss.
Rent Payment Methods
Landlords must offer tenants at least two payment method options including at least one free or low-cost option. Requiring payment via methods incurring significant fees may violate this requirement.
Rent Payment Frequency
Rent can be charged weekly, fortnightly, or monthly. Landlords cannot require more frequent payment than weekly.
Discrimination and Fair Housing
Anti-discrimination provisions prohibit discriminating against prospective tenants based on protected characteristics.
Protected Characteristics
Landlords cannot discriminate based on:
- Race, ethnicity, or national origin
- Gender, including gender identity
- Religious or ethical beliefs
- Family status (having children)
- Disability or impairment
- Sexual orientation
- Age
- Employment status
- Source of income (including government benefits)
Lawful Selection Criteria
Landlords can assess prospective tenants based on:
- Rental history and references
- Ability to pay rent (income verification)
- Number of occupants relative to property size
- Pet ownership (if reasonable grounds exist)
Compliance Requirements
Apply consistent, objective criteria to all applicants. Document tenant selection processes and rationale. Avoid questions or criteria that could constitute discrimination. Focus on legitimate rental history and financial capacity factors.
Methamphetamine Contamination Testing
Rules around methamphetamine testing and contamination have evolved, with clearer standards and requirements.
Testing Standards
Properties can only be deemed contaminated if testing shows contamination above Ministry of Health guideline levels (currently 1.5 micrograms per 100 square centimeters for extensive use).
Lower contamination levels don't justify terminating tenancies or requiring remediation.
Testing Procedures
If landlords suspect contamination, they can arrange testing following proper procedures. Tenants must be notified and testing must be conducted appropriately.
Landlords cannot evict tenants solely based on suspicions without proper testing confirming contamination above guideline levels.
Remediation Requirements
If contamination above guideline levels is confirmed, properties must be professionally remediated before re-tenanting. Simply cleaning without professional remediation and retesting doesn't satisfy requirements.
Maintenance and Repair Obligations
Landlords have clear obligations to maintain rental properties in reasonable condition.
General Maintenance Duties
Properties must be maintained in reasonable state of repair considering their age, character, and location. Landlords must respond to tenant maintenance requests within reasonable timeframes.
Urgent Repairs
Issues affecting health, safety, or security constitute urgent repairs requiring immediate attention including burst pipes or major leaks, electrical hazards, gas leaks, serious weather damage, or broken locks/windows creating security risks.
Failing to address urgent repairs promptly can result in tribunal claims, rent reductions, or exemplary damages.
Non-Urgent Repairs
Other maintenance should be addressed within reasonable timeframes, typically days to weeks depending on severity. Ignoring or excessively delaying maintenance creates liability.
Tenant Notification Rights
Tenants can issue notices requiring landlords to address maintenance within specified timeframes. If landlords don't comply, tenants can apply to Tenancy Tribunal for orders compelling repairs, reducing rent, or awarding damages.
Privacy and Property Access
Landlords must respect tenants' privacy rights and follow proper procedures for property access.
Entry Notice Requirements
Landlords entering properties require tenant permission or proper notice except in emergencies. Standard notice requirements are:
- Routine inspections: 48 hours' notice, maximum four inspections annually
- Repairs or maintenance: 24 hours' notice
- Property showings to prospective tenants: 48 hours' notice
Emergency Entry
Landlords can enter without notice in genuine emergencies threatening property or safety including fires, floods, gas leaks, or serious security breaches.
"Emergencies" don't include routine maintenance, inspections, or convenience. Emergency entry provisions shouldn't be abused.
Privacy During Viewings
When showing properties to prospective tenants, respect current tenants' privacy and possessions. Current tenants can be present during viewings. Schedule viewings at reasonable times with proper notice.
Record Keeping Requirements
Comprehensive record keeping protects landlords in disputes and demonstrates compliance.
Essential Records to Maintain
- Complete tenancy agreements
- All notices and correspondence
- Rent payment records
- Bond lodgement confirmations
- Inspection reports and photographs
- Maintenance request records and responses
- Healthy homes compliance statements
- Insurance policies
Maintain records for at least seven years after tenancies end.
The Luminate Financial Group Perspective
At Luminate Financial Group, we emphasize that tenancy law compliance is non-negotiable for property investors. The regulatory landscape has become substantially more complex, and penalties for non-compliance have increased significantly.
Many of our clients use professional property managers who understand tenancy law and maintain compliance systematically. For investors managing properties themselves, investing time in thoroughly understanding tenancy law requirements is essential.
Key recommendations include:
Stay Informed: Tenancy law changes regularly. Monitor Tenancy Services website, subscribe to updates, and maintain awareness of new requirements.
Use Professional Management: Property managers specializing in residential tenancies understand compliance requirements and maintain systematic processes ensuring adherence.
Document Everything: Maintain comprehensive records of all tenancy-related activities, communications, and compliance efforts.
Act Promptly: Address tenant concerns, maintenance requests, and compliance issues immediately rather than delaying.
Seek Advice When Uncertain: When facing complex situations or uncertainty about requirements, consult property lawyers or Tenancy Services rather than guessing.
Budget for Compliance: Factor compliance costs including healthy homes upgrades, proper documentation, and professional advice into investment calculations.
The regulatory environment for rental properties will likely continue evolving. Accept ongoing compliance as a permanent feature of property investment rather than viewing it as temporary burden.
Landlords who maintain excellent compliance, treat tenants fairly, and stay informed about regulatory requirements experience fewer disputes, better tenant relationships, and lower stress levels than those who resist or ignore regulatory changes.
Property investment in New Zealand requires accepting that you're operating within a regulated environment with substantial obligations toward tenants. Success requires embracing these obligations professionally and maintaining systematic compliance rather than viewing regulations as obstacles to overcome.
Ultimately, many regulatory changes aim to ensure rental properties provide safe, healthy, secure housing. While compliance creates costs and obligations, it also ensures your properties contribute positively to housing quality in New Zealand – something we should all support even as property investors.
