Terms to include in your tenancy agreement Rental News | rentalnews.co.nz

Terms to include in your tenancy agreement

When beginning a new tenancy, you need to provide your tenants with a tenancy agreement for both of you to sign.

Tenancy Services provides a basic agreement which landlords can use as a starting point for forming their agreements. 
The basic agreement outlines contact details and other information required of your tenant. However, it does not give all the clauses that you might want your tenant to comply with. Instead, it gives you a blank space for adding your own terms and conditions for your property.

These T&Cs must comply with the law, so you can’t just go adding anything you want. Make sure you are checking their legality first. 
Setting out terms and conditions in your agreements will help by ensuring you avoid misunderstandings with tenants, and avoiding liability surprises on both sides.

Some specific terms and conditions you should be considering for a tenancy agreement

Who will be responsible for outdoor maintenance?

Deciding from the outset on who is responsible for cleaning and maintaining any outdoor areas of the property is a must. This could include mowing the lawns, trimming the trees, maintaining the garden, and other outdoor chores. Outdoor maintenance can include tenants needing to:

  • mowing the lawns every fortnight
  • ensuring there is no rubbish in the outside areas, and
  • being responsible for removing any garden waste.

Being clear about who is responsible for outdoor maintenance will ensure that the outside of your property is well-maintained throughout the tenancy. It can be useful to have tenants responsible for outdoor maintenance if you are managing more than one property. But, remember that it could be in your best interest to be doing it yourself. Why? Well, many tenants might not own lawn mowers or other gardening equipment. Furthermore, if the outdoor areas are not being maintained, you might be left working on a much bigger clean up job at the end of the lease.

Permission for additional tenants/pets

Making sure that you’re in control of who is inhabiting your property, both humans and animals, is really important. In your agreement you should be outlining whether tenants are allowed to have pets or not. For more information on including pets in tenancy agreements, see:

Is it really necessary to include a clause on flammable substances in a tenancy agreement?

It may seem like common sense, but not mentioning your terms about the storage and use of flammable substances can have an impact on insuring your property. Some things that you may want to mention in your agreement are the use of:

  • unflued gas heaters
  • burning candles, and
  • any other flammable substances.

Unflued gas heaters do not have a chimney or any other feature that carries away the gases produced when they are used. Additionally, if these heaters are not being used in property ventilated areas, they can pose a serious threat to the health of your tenants. Candles also pose a threat to fires and can be dangerous when left near curtains or any other materials which the flame could catch.

If you have any issues with the use or storage of flammable substances on your property, it is worth mentioning this in the tenancy agreement. Conversely, if you have no issue with this, then it could be safe to confirm that your insurance is the same.

Smoke detectors

As of 2016, every rental property is legally required to have working smoke alarms. Any smoke alarms installed must be long life photoelectric alarms, meeting the required international standards.

You need to be aware that it is you, the landlord’s responsibility to install smoke alarms. You may have difficulty tracking the battery life of smoke alarms when you are not living in a property. Because of this, it is wise – and safe – to outline this as a tenant’s responsibility in the agreement. Let the tenant know that they are responsible for:

  • Replacing smoke alarm batteries
  • Advising you (the landlord) if the smoke alarms stop working
  • Ensuring smoke alarms and other fire-safety equipment or exits are not tampered with or removed by tenants or guests of the property.

Smoking

Not only is smoking bad for your health, but it can also affect the smell of your property if tenants are smoking inside. It is important to have a clause that addresses smoking and:

  • Where it can be done – if you have an outside area that you allow tenants to use for smoking.
  • If it can be done at all

What happens if smoking is not addressed, or a designated smoking spot is not mentioned in the agreement? Tenants are able to legally smoke wherever they please – inside, or outside.

The use of the property

With Airbnb and other services seeing opportunities for tenants to sublet and rent out rooms, outlining the terms of use of your property in your agreement is important. Some things you could mention to in the agreement to avoid your home being turned into a business or grounds for illegal activity are:

  • Using the property for residential purposes only
  • That the property is not to be used for unlawful purposes.
  • Tenants’ will not possess or use illegal substances on the property.
  • That tenants’ will not allow guests to possess or use illegal substances on the property.

By outlining the terms of use in the agreement, you will be ensuring that your property will be used as you expect it to be used.

Does your tenancy agreement cover rent and rent increases?

Make sure to include a note about increasing rent, and that it will only occur in accordance with the Residential Tenancies Act. From 12 August 2020, rent increases are limited to once every 12 months. This is a change from once every 180 days (six months).

Remember that the rent you charge must be close to market rent rate, or your tenant can take you to the tenancy tribunal to have rent reduced.

Unpaid rent and/or damages

What can happen if tenants do not pay rent and/or they make damages to your property that exceed the value of the bond? If it is not in your tenancy agreement, you might find yourself paying for it. Unfortunately, by not including a clause in their agreement that covers this, you can be liable. Avoid this by writing a specific clause in your tenancy agreement that they;

  • Pay the costs of any damage they make to your property that is not accidental.
  • The tenant must pay the costs of any unpaid rent.
  • Any costs of recovery which will be owed to a debt collection agency must be paid by the tenant

Other costs the tenant might be liable for include legal fees, commissions, and disbursements.

Methamphetamine

It is really important that you have the tenant acknowledge and agree to:

  • The fact that your property was tested for methamphetamine before they moved in.
  • Testing for methamphetamine can be carried out during inspections.
  • The property will be tested for methamphetamine after they leave.
  • In the event that the tenant uses meth in the property, they are liable for the costs of damages caused to the property as a result.

If you do not address your terms with the use of illegal substances like meth, this can affect your rights. Especially when it comes to testing for the substance. Above all, it can also affect your ability to act on its use and the damages this may have led to. For more information on meth contamination, see:

General Clauses

Other general points to include in a tenancy agreement concern:

  • Light bulbs – and who is responsible for replacing these.
  • Drains and wastes – and who is responsible for keeping these clear.
  • Excessive noise – and what is expected of the tenants in regard to this.
  • The maximum number of tenants allowed to be living in the property.

Covering all of these clauses in your agreement isn’t mandatory, but it’s worth considering a few. Have your tenant agree to these points in writing before the tenancy begins. As a result, it avoids experiencing issues during the lease. It also gives you a good case in the event that they do become an issue, and the Tenancy Tribunal is involved.

Making sure that you have a complete and thorough tenancy agreement can save you from a lot of headaches in the future.

Featured photo by Alejandro Escamilla on Unsplash

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