1. Tenancy agreement
A residential tenancy agreement is a legally binding contract between a landlord and a tenant. It's a written document that should be created, reviewed, signed and exchanged before the tenancy starts. Writing an agreement is all about defining expectations for both parties and laying out the process for what happens in any scenario.
The minimum standard terms are set by the Residential Tenancies Act and cannot be removed, altered or overwritten by either tenant or landlord. Tenancy Services provides a standard template you start with, but you can customise and add to it.
- Periodic or Fixed Term?
Your first decision is to select if you'd like to initiate a periodic or fixed-term tenancy. One is an open-ended contract with no specific end date and the other is a tenancy that lasts for a specific period that then needs to be renewed, reviewed, ended or becomes periodic upon expiry. Both scenarios have advantages and disadvantages. It's up to you to decide what would work best for you and your tenants.
- Who should be on the agreement?
When renting a property, it's very common to have multiple occupants but not all occupants necessarily should be included as named tenants on the agreement. As a general rule, we recommend everyone over 18 years old permanently occupying your property be included as tenants.
Learn more: Signing tenancy agreement with multiple tenants: What Landlords Should Know
- Required additional paperwork
Landlords are also required to meet Healthy Homes Standards within the property and disclose whether the property is insured. Healthy Homes Standards compliance statement and insurance statement should be created as part of the tenancy agreement (both statements can be created via myRent)
If you are renting out a unit title property, like an apartment or townhouse, the tenancy agreement must also include any body corporate rules that affect the tenant.
- Adding special clauses
As a landlord, you can add additional terms to the agreement as long as they're not inconsistent with the terms outlined by the Act. In general, a landlord can add clauses that relate to things that can damage the property or cause extra wear and tear and not conflict with the tenancy or any other laws or contradict other terms in the agreement.
Learn more about adding additional terms to a tenancy agreement
Open, fill, sign, and send. To create a compliant tenancy agreement online, you can use myRent. You can customise your agreement and add special clauses while knowing that all the legal nuances are followed and all the documents are included. Your tenants will appreciate the convenience of signing documents online without the need to meet in person.
2. Bond
Bond is money collected and paid by the tenant at the landlord's request as security against damage to the property or non-payment of rent.
- How much to charge?
The maximum bond a landlord is allowed to charge is 4 weeks' rent. It can be less, but it can't be more. It's up to you to decide how much to charge. If in doubt, select 4 weeks' rent equivalent.
- Bond lodgement paperwork
You need to complete a bond lodgement form and have it signed by both you and your tenant. The form is usually prepared at the same time as a tenancy agreement. That way, the tenant can review and sign all the documents at once.
- When to collect bond payments?
Bond payments should be collected before a tenancy start date and before tenants move in. Tenants usually are required to make a payment after the lease is signed.
- How to lodge the bond?
Once the bond lodgement form is signed and bond funds collected, the form needs to be lodged with Tenancy Services online or by mail.
The bond must be registered within 23 working days of payment received.
Failure to lodge a bond is not a joke. You can face a fine of up to $1,000 (payable to the tenants) for not lodging a bond.
Some tenants may ask to transfer a bond from their current tenancy to the new one. To do that, tenants must complete a bond transfer form. It's important to understand that this process can be initiated only after the tenant's current tenancy ends and the old landlord is happy to release the bond in part or in full. So this may take a while. You don't have to accept a bond transfer.
Need a simple solution? We've created a quick, convenient way to lodge a bond. myRent can help create bond lodgement forms, handle tenant payments, and lodge your bond directly with Tenancy Services. Learn more
3. Advance rent payment
An advance rent payment is your tenants' first rent payment they make to secure their tenancy. It should be allocated to the first rent cycle.
- How much to charge?
If you're planning to receive rent weekly, you would typically ask for 1 week's rent in advance. If your tenants need to pay rent fortnightly, you would ask for 2 weeks in advance. In any situation, asking the tenant to pay more than 2 weeks' rent in advance is illegal.
- When to expect the advance rent payment?
You can specify on the tenancy agreement when the advance rent payment should be paid by. Make sure advance rent is collected before the move-in date.
myRent can help you spend less time worrying about rent. We offer 3 options for collecting rent to suit any landlord - from hands-free rent collection to automated rent tracking via bank feeds. Learn more
4. Initial property inspection
A property inspection report is used to record the condition of the property at the start of the tenancy to determine if any damage beyond fair wear and tear has occurred during the tenancy. As a landlord, you should always prepare a condition report because it is the easiest and most reliable way to claim damages from the tenant's bond. It also protects tenants against landlords claiming damage that was present before moving in.
Need assistance with Property Inspections? myRent is here to help! Book a one-off professional inspection service (no strings attached!) or outsource all your property inspections.
- When is best to do the initial property inspection?
Your tenant will need to inspect your property and sign an initial inspection report before moving in. It's best to get it done on the actual day they move in.
- Does your tenant need to be present during the inspection?
It is, of course, ideal if both parties can be present for the inspection, so it can be used as an opportunity to have a regular conversation. However, if an agreement cannot be made on a suitable time for both, then the landlord can organise a time for the inspection that suits them.
A landlord can choose to inspect the property ahead of time, before (but close to) the tenant's move-in day. A tenant can review the initial property inspection report prepared by the landlord when they moved in and add any comments and/or photos before signing and returning it.
- How best to keep records
Make sure you complete a thoroughly documented initial inspection report with lots of photos and videos of every room (although photos are often more detailed and handier for Tribunal hearings).
Paperless inspection reports. myRent offers a paperless process of conducting inspections using the myInspections app. Our custom software helps to record the condition of the property as a whole and of each room in detail. Any issues are well-documented, and inspection reports are thoroughly completed and e-signed. Best of all, it's free to use!
5. Landlord Insurance
This is very, very important. Like house insurance, you need landlord insurance to cover any damage to your property or lost income. Your house insurance will not cover this.
Landlord insurance covers things like accidental and deliberate damage caused by tenants, loss of rent following damage or resulting from eviction on abandonment, landlord liability, landlord contents damage or theft and meth contamination.
Tenants should seek their own insurance to protect their contents from theft or damage. Tenants will sometimes believe they are covered by your landlord's insurance, but that is not true since they need their own insurance.
6. Where to seek help?
Finding and understanding rules around property rental and NZ legislation is very important. Luckily with the help of the internet, staying informed and finding the right information is easier than you think.
- Tenancy Services
An excellent resource contains essential information about landlord and tenant rights and obligations. The information is presented in uncomplicated language and simply laid out. You can contact their customer service team if you ever need personalised advice. Their number is 0800 836 262; they're very responsive and helpful.
- NZPIF
NZPIF is the umbrella body for 20 local Property Investors' Associations throughout New Zealand. Belonging to one of the associations (in our humble opinion) is essential if you're serious about property investing. It's also a great way to mix with like-minded people, network and learn a lot by attending their talks and meet-ups.
myRent.co.nz
Doing it yourself doesn't mean doing it alone. myRent not only offers a convenient way to manage your property but a customer-focused team here to help. We provide a collection of resources on all things involved with being a landlord. If you're ever unsure what to do, contact us to get your questions answered. We will seek advice from industry experts and guide you on what to do next.
NZ Property Chat Facebook group
There are lots of great independent groups out there. NZ Property Chat is the biggest Facebook community where members can seek advice about property investment.
Congratulations! You're officially a landlord! All the best on your rental journey. Give us a shout if you need a hand with anything.
Read more: How to create a tenancy agreement on myRent
The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.
