Understanding Flatmates and Tenants under New Zealand Law
In New Zealand residential property, it is important to distinguish between a 'tenant' and a 'flatmate' when considering bond refunds. The Residential Tenancies Act 1986 (RTA) primarily governs relationships between a 'landlord' and a 'tenant'. A landlord is the owner of premises or the person entitled to possession of the premises who grants a tenancy of those premises [Source: Residential Tenancies Act 1986, s 2(1)]. A tenant is the person to whom a landlord grants a tenancy of any premises; it includes subtenants and assignees [Source: Residential Tenancies Act 1986, s 2(1)].
Generally, a flatmate is an individual who lives in a rental property with other people but does not have their name on the official tenancy agreement with the landlord. Instead, they might have a private agreement with one or more of the named tenants (often referred to as a 'head tenant'). This distinction is crucial for understanding bond rights and obligations.
The Residential Tenancies Act 1986 and Bond Protection
The RTA sets out specific rules for how rental bonds must be collected, held, and refunded. Under the RTA, a bond is a sum of money paid by the tenant to the landlord as security [Source: Residential Tenancies Act 1986, s 2(1)].
If a flatmate is named as a tenant on the official tenancy agreement with the landlord, then they are considered a tenant under the RTA. In this scenario, their bond contributions are protected by the RTA, and the bond must be handled in the following way:
- The landlord must pay all bond money received from a tenant to Tenancy Services (the Tenancy Services Administrator) within 23 working days of receiving it [Source: Residential Tenancies Act 1986, s 13A(1)].
- The landlord must provide the tenant with a written receipt for any bond money paid [Source: Residential Tenancies Act 1986, s 22A].
- The maximum amount a landlord can ask for as bond is the equivalent of four weeks' rent [Source: Residential Tenancies Act 1986, s 23(1)].
Bond Refunds for Named Tenants
When a named tenant leaves a property, or the tenancy ends, they have rights regarding the refund of their bond. The process for a bond refund under the RTA involves:
- The landlord and tenant(s) applying to Tenancy Services for the bond to be repaid [Source: Residential Tenancies Act 1986, s 25(1)].
- If all parties agree, Tenancy Services will refund the bond as directed by the application [Source: Residential Tenancies Act 1986, s 25(2)].
- If there is a dispute over the bond refund (e.g., due to alleged damage or unpaid rent), any party may apply to the Tenancy Tribunal for a decision on how the bond should be refunded [Source: Residential Tenancies Act 1986, s 26]. The Tenancy Tribunal has jurisdiction to determine such disputes [Source: Residential Tenancies Act 1986, s 85].
Bond Refunds for Flatmates with Private Agreements
If a flatmate is not named on the official tenancy agreement and instead pays their share of the bond directly to a head tenant, their bond payment is generally considered a private arrangement. This type of arrangement is not directly covered by the bond provisions of the Residential Tenancies Act 1986.
In such cases, the flatmate's agreement for bond refund would be with the head tenant. The head tenant has an obligation to refund the flatmate's bond according to their private agreement, assuming no deductions are warranted for damage caused by the flatmate or unpaid rent shares owed by them. While the RTA does not apply directly to this private agreement, the head tenant, as a named tenant, is still responsible for the entire bond paid to Tenancy Services for the property.
Dispute Resolution for Flatmate Bond Issues in Private Agreements
If a flatmate who paid bond to a head tenant has a dispute over its refund, they cannot apply to Tenancy Services or the Tenancy Tribunal. Instead, such disputes are typically handled by the Disputes Tribunal. The Disputes Tribunal is a less formal court that hears and decides civil disputes up to a certain monetary value. This is because the issue is a private contractual matter between individuals, not a landlord-tenant dispute under the RTA.
Documenting Private Bond Agreements
For flatmates entering into private arrangements, it is advisable to have a written agreement with the head tenant detailing:
- The amount of bond paid.
- The conditions under which the bond will be refunded.
- Any agreed deductions for damage or unpaid rent.
This written record can be valuable evidence if a dispute arises and needs to be taken to the Disputes Tribunal.
When to Seek Independent Legal Advice
Individuals seeking to understand their specific rights and obligations regarding residential tenancies or flatmate agreements are encouraged to seek independent legal advice. Information on legal services, including free advice, can be obtained from Community Law Centres or through the Ministry of Justice website.