Landlords can live and die by the tenancy agreement they negotiate with tenants. To minimise risks of future expenses and unnecessary conflicts down the road, take your time and consider the following things before signing a new residential tenancy agreement.
1. Fixed or Periodic - What’s right for you?
It is important to understand the difference between the fixed term tenancy and the periodic tenancy.
A periodic tenancy has no set end date and continues until either the landlord or tenant gives written notice to end the tenancy.
A fixed term tenancy is the one where the landlord and tenant agree that the tenancy will only last for a particular length of time (most commonly one year).
The decision to go with periodic agreement over fixed-term or vice versa will effect:
- whether you can increase your rent mid-tenancy if your situation calls for it
- If you can terminate the tenancy early
- If your tenant can terminate the tenancy early
- If you decide to sell your property, if you can choose to sell it empty
- What notice periods you and your tenants need to give each other to terminate the agreement
2. How much bond to charge?
The maximum bond a residential landlord is allowed to charge is an equivalent to 4 weeks rent.
In future when increasing the rent, you can ask the tenant to pay extra bond equalling the weekly rent amount.
The bond (and any extra bond collected as a result of future rent increases) must be lodged with Tenancy Services within 23 working days of receiving it.
3. Is subletting a good idea?
Subletting coves situations where the tenants move out of the property they’re renting and on-rent the house to someone else (for either residential or a short-term holiday purposes). It also covers situations where the tenants rent part of the property exclusively to someone else for any period of time.
Having flatmates living at the property is not seen as subletting. This is because the flatmate shares the property with the tenant and not using it exclusively.
You can include a clause in the tenancy agreement forbidding tenants from subletting the house if you’re not comfortable with it.
You can also specify the exact number of occupants (not to be confused with tenants, people on the tenancy agreement), who can occupy the property. Occupants can be tenant’s dependants like children, elderly relatives, or anyone else who is authorised to reside in the premises.
4. Did you include thorough pet clauses?
If you’ve made a decision to allow a pet on your property, make sure you write it in the tenancy agreement.
You can choose to only allow pets outside or inside. You can choose how many pets and of what type can live in your rental at any given time.
Not allowing pets on your property is completely up to you. Make sure you add a clause to your agreement restricting tenants to have one.
Remember that charging extra bond for pets is illegal in New Zealand.
5. Fixed tenancy? Think ahead of rent reviews
It is very important to remember that, in general, rent may not be increased during a fixed-term tenancy. Landlords can only increase rent by giving correct notice and if the tenancy agreement allows for this. So, make sure you include a clause allowing rent increases in the tenancy agreement.
As soon as the terms of the lease have been agreed upon, they must be recorded in writing, in full. The document then needs to be signed by both parties and kept securely by both tenants and landlords in case anyone needs to ever refer to it.
With so many important points to consider landlords can greatly benefit from using myRent management platform to manage their tenancies.
myRent.co.nz helps you prepare customised tenancy agreements, insulation statements, bond lodgement forms online by allowing both you and tenants to sign electronically on any device.
With so much to remember we help you store all of the documents and tenant communication in one centralised place, remind you of all key events and dates and even look after rent payments.
If you’d like to learn more about myRent management features, visit our page, view our example tenancy, or contact us today - hello@myrent.co.nz
