This question has come up quite a bit lately with a number of investors considering selling up. But you have to think about the implications if you want to sell your rental property
Since the new tenancy laws came into effect in February 2021 tenants can only be given notice for a very narrow number of reasons, one being that the property is going to be renovated extensively and it wouldn’t be practicable for the tenant to remain in the property while the renovation is being completed.
Another is that the property is going to be put on the market for sale.
So what’s an extensive alteration?
When it comes to renovating, painting the property and putting in new carpet isn’t classed as an extensive renovation so isn’t enough of a reason to give your tenant 90 days notice.
Putting a new bathroom in would be (and this would only be if there was only one bathroom in the property). Putting in a new kitchen would also come in this category.
Putting the property on the market for sale
In days gone by it has been known that landlords gave their tenants notice because they said the property was going to be sold.
There was no accountability for ensuring that it was actually put on the market and they used this as an excuse to move the tenants on.
Since February 2021 landlords can now be held to account if they give a tenant 90 days notice to vacate because they are intending to sell the property but don’t actually do it.
The property has to be put on the market within 90 days of the tenants leaving and if challenged the landlord would have to show that they had put the property on the market (agency agreement, ads, photos etc), and that open homes had taken place.
What if it doesn’t sell?
If after a period of time the property doesn’t sell, as long as you can produce evidence that it was genuinely on the market and also show that you considered all reasonable offers then you could comfortably put your rental property back into the rental market with peace of mind.
N.B. The information contained in this article 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. Renthub Ltd does not accept any liability that may arise from the use of this information.
