Property Law
Rent and advertising

Are you looking to rent out a residential property? Here’s what you need to know about advertising your property and charging rent in light of the recent changes to the Residential Tenancies Act.

Advertising

If you list your property for rent, you must list the rental price.

A prospective tenant may voluntarily offer to pay more than the listed price, and you may accept the offer, but you cannot invite or encourage prospective tenants to bid on the rental in order to charge more than the listed price.

Charging rent

The rent you charge on a property must be in line with the market rent. The Tenancy Services website provides a guide for determining the market rent based on the type, size and location of your property. If you charge substantially more than the market rent, your tenant may apply to the Tenancy Tribunal to reduce the rent.

A landlord can ask for a maximum of 1 week’s rent (if paid weekly) or 2 week’s rent (if paid fortnightly) in advance.

Increasing the rent

Rent increases are limited to once every 12 months. You can increase the rent under a periodic tenancy if more than 12 months have passed since the start of the tenancy or since the last rent increase took effect.

Rental increases are not permitted under fixed term tenancies unless the tenancy agreement allows for such rent increases.

Landlords must provide their tenant written notice of any proposed increase. The written notice must include the amount of the increased rent and the date it will take effect. The date the increase will take effect must be at least 60 days after the date on which the notice is given to the tenant.

What to do if your tenant is behind on rent

Let your tenant know they are behind on rent and provide an opportunity for your tenant to bring their rent up to date. If you offer a payment plan, record your agreement in writing.

If the rent is at least 5 working days in arrears, you can also send a formal written notice to remedy to your tenant. The notice should set out the amount of rent overdue, details of missed or short payments and provide your tenant with 14 days to make payment of the overdue rent. The notice should also advise the tenant of their right to make an application to the Tenancy Tribunal challenging the notice if they dispute the rental arrears.

If there is more than one occasion where the tenant is at least 5 working days behind on rent, send a notice to remedy each time and refer to any pervious notices given within the last 90 days.

If you have provided 3 separate notices to remedy non-payment of rent in the last 90 days, you can apply to the Tenancy Tribunal for an order terminating the tenancy. The application must be made within 28 days of your third notice to remedy. You don’t need to advise your tenant that you intend to do this.

You can also apply to the Tenancy Tribunal for termination of the tenancy if the tenant owes at least 21 days of rent.

Rebecca is a solicitor in Simon Collett’s commercial/property team.