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tenancy

Unlawful acts under the RTA and their penalties

Key Takeaway

Unlawful acts under New Zealand's Residential Tenancies Act 1986 are specific breaches by landlords or tenants that can result in financial penalties imposed by the Tenancy Tribunal. These acts include landlords unlawfully entering premises or failing to meet Healthy Homes Standards, and tenants intentionally damaging property or illegally subletting. Penalties are designed to deter non-compliance.

Unlawful Acts Under the Residential Tenancies Act 1986 and Their Penalties

In New Zealand, the Residential Tenancies Act 1986 (RTA) governs the rights and obligations of landlords and tenants in residential tenancies. The RTA identifies specific actions or omissions, known as "unlawful acts," for which the Tenancy Tribunal may impose financial penalties on the offending party [Source: Residential Tenancies Act 1986, s 109(1)]. A "pecuniary penalty" is a financial sanction ordered by the Tenancy Tribunal, distinct from compensation for actual loss or damages [Source: Residential Tenancies Act 1986, s 109A(1)].

The Role of the Tenancy Tribunal

The Tenancy Tribunal is a judicial body established to resolve disputes between landlords and tenants. It has the authority to make various orders, including ordering parties to comply with their obligations, paying compensation for losses, and imposing pecuniary penalties for unlawful acts [Source: Residential Tenancies Act 1986, s 77]. An application must be made to the Tribunal for it to consider an alleged unlawful act [Source: Residential Tenancies Act 1986, s 86].

Unlawful Acts by Landlords

Landlords have specific obligations, and failing to meet certain ones can constitute an unlawful act:

  • Demanding Prohibited Payments

    • Key Money: A landlord must not demand or receive any payment from a tenant or prospective tenant to secure a tenancy, other than rent or bond [Source: Residential Tenancies Act 1986, s 17B(1)]. The maximum pecuniary penalty for demanding key money is $1,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 1].
    • Excessive Rent: A landlord must not demand or receive rent that is more than the maximum permitted rent [Source: Residential Tenancies Act 1986, s 24(1)]. The maximum pecuniary penalty for this is $1,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 2].
    • Excessive Bond: The bond demanded or received by a landlord must not exceed the equivalent of four weeks' rent [Source: Residential Tenancies Act 1986, s 18(1)]. The maximum pecuniary penalty for demanding an excessive bond is $1,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 3].

  • Bond Not Lodged: A landlord who receives a bond must pay it to the Chief Executive of the Ministry of Business, Innovation and Employment (who operates Tenancy Services, the bond regulator) within 23 working days [Source: Residential Tenancies Act 1986, s 19(1)]. The maximum pecuniary penalty for failing to do so is $1,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 4].

  • Failure to Provide Written Tenancy Agreement: A landlord must provide a written tenancy agreement and provide it to the tenant [Source: Residential Tenancies Act 1986, s 13A(1)]. The maximum pecuniary penalty for this failure is $1,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 5].

  • Interference with Quiet Enjoyment and Privacy: A landlord must not interfere with the tenant's reasonable peace, comfort, or privacy in their use of the premises [Source: Residential Tenancies Act 1986, s 45(1)(d)]. The maximum pecuniary penalty for this is $3,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 6].

  • Unlawful Entry: A landlord's right to enter the premises is restricted and requires specific notice or the tenant's consent, except in emergencies [Source: Residential Tenancies Act 1986, s 48]. Entering the premises unlawfully is an unlawful act, with a maximum pecuniary penalty of $3,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 7].

  • Unlawful Termination or Eviction: Landlords must follow strict legal procedures to terminate a tenancy [Source: Residential Tenancies Act 1986, Part 4]. Unlawfully requiring a tenant to leave the premises is an unlawful act, with a maximum pecuniary penalty of $6,500 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 8].

  • Discrimination: A landlord must not unlawfully discriminate against a prospective or current tenant on prohibited grounds under the Human Rights Act 1993 [Source: Residential Tenancies Act 1986, s 45(2A); Human Rights Act 1993, s 21]. The maximum pecuniary penalty for unlawful discrimination is $6,500 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 8B].

  • Failure to Comply with Healthy Homes Standards: Landlords must ensure their rental properties comply with specific Healthy Homes Standards regarding heating, insulation, ventilation, moisture ingress and drainage, and draught stopping [Source: Residential Tenancies Act 1986, s 45(1)(ca); Residential Tenancies (Healthy Homes Standards) Regulations 2019]. The maximum pecuniary penalty for failing to comply with Healthy Homes Standards can be up to $7,200 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 8A].

  • Not Complying with Family Violence or Physical Assault Requests: Specific provisions allow tenants experiencing family violence or physical assault to end a tenancy early under certain conditions [Source: Residential Tenancies Act 1986, ss 56B, 56BA]. A landlord who fails to comply with a tenant's request relating to family violence or physical assault is committing an unlawful act, with a maximum pecuniary penalty of $3,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 8C, 8D].

  • Not Complying with Tribunal Orders: Failure by a landlord to comply with an order made by the Tenancy Tribunal is an unlawful act, with a maximum pecuniary penalty of $1,500 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 9].

Unlawful Acts by Tenants

Tenants also have obligations under the RTA, and breaches of certain obligations can be unlawful acts:

  • Unlawful Assignment or Subletting: A tenant must not assign (transfer their tenancy to another person) or sublet (rent out part or all of the property to another person) the premises without the prior written consent of the landlord [Source: Residential Tenancies Act 1986, s 34(1)]. Doing so unlawfully is an unlawful act, with a maximum pecuniary penalty of $1,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 11].

  • Causing Intentional Damage: A tenant must not intentionally or carelessly damage the premises [Source: Residential Tenancies Act 1986, s 46(1)(c)]. Causing intentional damage to the premises, or allowing intentional damage to be caused, is an unlawful act, with a maximum pecuniary penalty of $3,000 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 11A].

  • Not Complying with Tribunal Orders: Failure by a tenant to comply with an order made by the Tenancy Tribunal is an unlawful act, with a maximum pecuniary penalty of $1,500 [Source: Residential Tenancies Act 1986, Schedule 1A, cl 12].

Pecuniary Penalties and Their Determination

Pecuniary penalties are intended to deter non-compliance with the RTA. When determining the amount of a pecuniary penalty, the Tenancy Tribunal considers various factors, including:

  • The nature and extent of the unlawful act.
  • Any loss or damage suffered by any person as a result of the act.
  • The intent of the party who committed the act.
  • Whether the party has previously committed unlawful acts.
  • The amount of any benefit obtained by the party as a result of the act [Source: Residential Tenancies Act 1986, s 109A(2)].

Pecuniary penalties ordered by the Tribunal are paid to the Crown [Source: Residential Tenancies Act 1986, s 109A(5)].

Making a Claim

If a party believes an unlawful act has occurred, an application can be made to the Tenancy Tribunal. The Tribunal will hear the case, assess the evidence, and determine if an unlawful act has been committed and whether a pecuniary penalty should be imposed [Source: Residential Tenancies Act 1986, s 86].

When to Seek Independent Legal Advice

For specific information relating to a particular tenancy situation, or assistance with making an application to the Tenancy Tribunal, it is advisable to seek independent legal advice. Information and assistance may be available from Community Law Centres or other legal professionals. Guidance can also be obtained from Tenancy Services, a government service providing information on residential tenancy matters.

Key Resources