Payments for Residential Tenancies in New Zealand
New Zealand law specifies what payments a landlord or their agent can lawfully require from a tenant or prospective tenant. Certain charges, such as 'key money' and 'letting fees,' are prohibited under the Residential Tenancies Act 1986 (RTA).
What is 'Key Money'?
'Key money' refers to any payment demanded by a landlord or their agent from a prospective tenant, beyond the agreed rent and bond, as a condition for granting a tenancy. This practice is unlawful in New Zealand [Source: Residential Tenancies Act 1986, s 17(2A)]. The law aims to ensure that tenants are not burdened with additional, unapproved costs simply to secure a rental property.
What is a Letting Fee?
A 'letting fee' was a charge historically imposed by real estate agents or property managers on a tenant for services related to finding a rental property and arranging the tenancy. This included tasks such as advertising, showing properties, and processing applications. As of 12 December 2018, charging a letting fee to tenants became illegal in New Zealand [Source: Residential Tenancies Act 1986, s 17(2A)]. The prohibition means that landlords or their agents cannot require or receive this payment from a tenant or prospective tenant.
Permitted Payments by Landlords
The Residential Tenancies Act 1986 limits the types of payments a landlord or their agent can require from a tenant or prospective tenant. The only generally permitted payments are:
- Rent: The periodic payment for the use of the property [Source: Residential Tenancies Act 1986, s 17(1)].
- Bond: A security deposit, typically up to four weeks' rent, held by the Tenancy Services [Source: Residential Tenancies Act 1986, s 18(1), s 19(1)].
- Payment for specific goods or services: A payment for goods or services specifically requested by the tenant, provided the payment does not exceed the reasonable cost of providing those goods or services [Source: Residential Tenancies Act 1986, s 17(2B)]. This does not include services generally associated with securing a tenancy, such as property viewings or application processing, which are covered by the prohibition on letting fees.
Any other payment required by a landlord or their agent in consideration of the grant, renewal, continuance, or assignment of a tenancy is unlawful [Source: Residential Tenancies Act 1986, s 17(2A)].
Tenant's Rights Regarding Unlawful Payments
If a tenant believes they have been unlawfully charged 'key money' or a letting fee, they may apply to the Tenancy Tribunal, which is a judicial body that resolves disputes between landlords and tenants [Source: Residential Tenancies Act 1986, s 77]. The Tenancy Tribunal has the authority to order the repayment of any unlawful payment [Source: Residential Tenancies Act 1986, s 80(1)(g)]. Furthermore, landlords or agents who commit unlawful acts, such as demanding prohibited payments, may be liable to pay exemplary damages to the tenant [Source: Residential Tenancies Act 1986, s 109]. Exemplary damages are monetary awards intended to punish wrongdoing and deter similar conduct in the future.
When to Seek Independent Legal Advice
Individuals seeking to understand their specific rights and obligations regarding residential tenancy payments are encouraged to consult official government resources. For free and independent legal advice, individuals can contact Tenancy Services or their local Community Law Centre [https://communitylaw.org.nz/]. This information is not a substitute for tailored legal advice regarding specific circumstances.
Key Resources
- Tenancy Services: https://www.tenancy.govt.nz
- Legislation New Zealand: https://www.legislation.govt.nz/act/public/1986/0120/latest/whole.html
- Community Law Centres: https://communitylaw.org.nz/