So you’re a farmer. Are you also a landlord?

September 16 2016

If you provide accommodation for staff on your farm, you’re subject to the Residential Tenancies Act 1986. It’s not uncommon for our rural lawyers to see a look of surprise when we tell our clients they have to comply to the same rules as any other landlord providing a residential tenancy, or risk finding themselves in a Tenancy Tribunal hearing for failing to comply.

What are your obligations?

As an employer or farm owner, you must comply with the same standards as any other landlord. If you provide accommodation for staff, it will be classed as ‘service tenancies’. They are largely subject to the same rules with a few minor exceptions such as rent in advance and termination notices.

In many cases, the tenancy agreement will be part of the employment agreement, so you need to ensure you’re not using an outdated agreement that doesn’t comply with the requirements of the Residential Tenancies Act 1986. Better still, the Tenancy Tribunal prefers the tenancy agreement as a separate document, not as part of an employment or any other agreement.

Make sure you have a written tenancy agreement and include the compulsory clauses. Contact our rural lawyers to review your draft agreement before you present it to your staff.

Are your rentals up to standard?

From July this year, stricter standards have been imposed on landlords to ensure their rental properties are safer and warmer. You must install and maintain sufficient smoke alarms in the property. You must ensure the property is maintained to a safe and reasonable standard: electrical outlets need to be working, broken windows must be repaired, and plumbing systems must be in working order.

You also need to be aware there are new insulation requirements taking effect from 1 July 2019. These requirements are designed to help combat health issues associated with the cold, damp and mould commonly found in tenanted accommodation. The requirements differ throughout New Zealand.

Does the property have P-contamination?

If you haven’t read our article on P-contamination, you can read it here.

P-contamination is a significant area of concern for farmer landlords. As a landlord you’re responsible to your tenant for any effect of methamphetamine (P) contamination in your property. You should actively monitor your property and test for P if required.

Ignorance is not an excuse with the Tenancy Tribunal and can be a costly mistake. A recent decision[1] noted that simply not knowing whether or not a property was contaminated doesn’t absolve you of liability to any future tenants. This decision places an onus on landlords to test between tenants and advise new tenants of the results.

Our rural lawyers advise you to get your property tested between tenants. You should also update the provisions in the tenancy agreement to enable you to recoup costs if you can show that through regular testing on the balance of probabilities, the contamination was caused by a particular tenant. Contact us if you need help making these updates.

Have you checked your insurance?

The days of a farm assistant being placed into substandard accommodation are now over. The Tenancy Tribunal doesn’t look favourably on farmers who plead ignorance to the requirements. More than ever before, you should consider the value of your rental properties as assets. This also means you should also review your insurance.

Talk to your insurer to establish what steps are required for your landlord’s insurance to be effective. Some insurers will have requirements regarding the frequency and form of property inspections before they will honour your policy. You’ll need to make sure you’re meeting those requirements if you ever need to make a claim.

Remember, if you’re unsure about your obligations and responsibilities to your farm staff, or need guidance on tenancy agreements, contact our rural lawyers.

[1]    Visagie v Harper Property Management 15/06955/MK
16 March 2016

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