New residential tenancies legislation

The Residential Tenancies and Rooming Accommodation Act 2008 comes into effect on 1 July 2009.

One of the major changes to the current law with respect to permanent tenants (which is the Residential Tenancies Act 1994 (‘the RTA’)) is that while tenants retain a right to give a landlord or their agent 14 days notice to leave before expiry of a fixed term tenancy, the same rights are not afforded to landlords.

On and from 1 July 2009, any notice to leave given to a tenant by a landlord with respect to a fixed term tenancy must allow that tenant two months notice to leave. This is a significant departure from the 14 day period provided by the RTA.

There is no need to immediately panic about giving tenants two months notice to leave for fixed term tenancies. In line with usual legislation principles, the commencement of these new rules is not retrospective. The transitional provisions of the new Act provide that a step taken under the RTA remains valid, and governed by the rules of the RTA.

This means that if you have a tenant with a fixed term tenancy expiring on or after 1 July 2009, and you give them a notice to leave on or before 30 June 2009, then that notice to leave is governed by the RTA, which requires only a minimum 14 day notice period. That same notice given on 1 July 2009 would require a two month notice period.

You will need to carefully assess your tenancies that are expiring in July and thereafter and decide whether you wish to give a notice to leave before or after 1 July 2009. Going forward, you are going to have to have a good bring up system to remind you to make decisions with respect to tenants at least two months out from the expiration of their fixed term tenancy.

Some commentators suggest that along with giving a tenant the usual tenancy documents at the commencement of their tenancy, it is also worth giving a tenant a notice to leave at the same time. This means that the tenant has well and truly two months notice to leave. While this may be acceptable in law for the time being, it is not necessarily the best way to start a relationship with your tenant!

There are a few other changes to current practice for tenancies. These will be expanded on in later email newsletters, but just remember, they are only law come 1 July 2009. There is plenty of time to prepare for the practical changes between now and then.

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