Going flatting for the first time is an exciting step for your adult children. They get to live with people their own age and you have your freedom. How can they make the most of this new-found independence with the least risk to them?
Residential tenancy agreements
Flat leases are really ‘residential tenancy agreements’. Agreements should be in writing, however, an unwritten agreement can sometimes be enforced. A written agreement makes the obligations clear for both a tenant and their landlord. Your child and their flatmates should talk with their landlord about what the agreement contains. You should remind them to read the agreement through before it’s signed – no one wants nasty surprises.
Residential tenancies can be for a fixed term or ‘periodic’. Fixed term means that the tenant rents the property for a fixed time such as 12 months. This means rent must be paid for the full term, even if the flatties go home for the university holidays.
A periodic agreement runs until either the landlord or tenant decides to end it. The tenancy ends when the landlord or tenant gives notice in writing to the other. A tenant must give three weeks’ notice in writing and a landlord must give 90 days. The landlord’s notice period can be reduced to six weeks if they sell the house and their purchaser wants the tenants out, or if they need the house for their own family.
Joint and several liability
A group of people renting together are all tenants. Tenants are usually ‘jointly and severally liable’. ‘Several’ means that each tenant is responsible for all of the obligations under the lease. ‘Joint’ means the group as a whole is also responsible. So if one flatmate (or their visitor) damages the property, all the flatties may be asked to pay for the damage.
It’s a similar scenario for rent. It can be a surprise to tenants that they may have to chip in to pay each other’s rent if one flatmate doesn’t pay. It pays to be careful choosing flatmates as they all need to care for the property and pay their rent on time.
Sometimes parents are asked to guarantee their child’s lease. Watch for this – you may be guaranteeing all the tenants and any damage to the property.
Getting started with flatting
The first step for flatties is choose a flat and talk to the landlord. You must all agree who the tenants are, how long you will stay, the rent, the bond, and whether smoking or pets are allowed, and if any furniture is included. Before moving in, the agreement must be signed.
Do carry out an inspection of the property before you move in. Do this with the landlord, and record (video on your mobile works well) the state of the property. This is how the house should look when you leave.
Bond
The landlord must pay the bond to Tenancy Services. Tenancy Services will return the bond to the tenants once they and the landlord both notify Tenancy Services that the lease has ended and there is no damage to the property or unpaid rent. A bond is usually two to four weeks’ rent.
Insurance
Only the landlord can insure the house. Each flatmate should have contents insurance, even if they don’t own much. Do consider personal liability insurance. This can give protection for accidental damage to the house and the landlord has to make a claim on their insurance. Flatmates are responsible for their visitors’ behaviour; if they damage anything you might have to pay!
What if something is broken?
Accidents happen; flatties should not try to cover it up. The landlord must be told straight away. Their insurer is more likely to help them if a problem is reported quickly. If any flattie notices things such as a leak, let the landlord know – small leaks can cause big damage to a property. Helping the landlord look after the house may help keep your rent down next year.
Leaving the flat
When the tenancy ends all flatties will want their bond repaid. Everyone must move out with all their belongings, rubbish removed, and the property left clean and tidy. Check the video made at the start; that is how the property should look as everyone leaves. It’s a good step to ask the landlord over to check the property together.
There’s more information on renting at Tenancy Services, or we’re always happy to help.
DISCLAIMER: All the information published in Property Speaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Property Speaking may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2018. Editor: Adrienne Olsen. E-mail: adrienne@adroite.co.nz. Ph: 029 286 3650 or 04 496 5513.
