As the tenancy regulator, the Ministry of Business, Innovation and Employment (MBIE) will be able to use four new enforcement measures:

• Enforceable undertakings
• Improvement notices
• Infringement notices
• Pecuniary penalties

New unlawful acts have also been introduced, and penalties have increased for existing unlawful acts.

The team that monitors compliance at MBIE is the Tenancy Services Compliance and Investigations team.

They cannot intervene in every issue that is brought to their attention but do proactively visit landlords and property management companies.

Where tenants have breached their obligations to landlords, landlords should take their own action at the Tenancy Tribunal.

Enforceable undertakings

What is an enforceable undertaking?

An enforceable undertaking (EU) is an agreement between the Chief Executive of MBIE and the landlord/tenant who has committed a breach of the Residential Tenancies Act (the Act), regulations, or their tenancy agreement.

An EU is a binding agreement that may include how the landlord/tenant will rectify the breach, pay money owed, remedy any harm caused, or take action to prevent the breach from reoccurring.

Conditions of an enforceable undertaking

Once the EU has been put in place, it is important to note that:

• no proceedings can be brought in relation to the EU against the party who offered it (provided it is complied with), and
• failure to comply with an EU is an unlawful act and may result in a penalty.

The EU may be withdrawn or changed at any time with the written agreement of the Chief Executive of MBIE.

An EU is generally used as an alternative to legal action. It should not, however, be viewed as an easy option. The agreement details actions the party will take to respond to the breach. These actions can be wide ranging and will generally require the party to take steps over and above their minimum legal obligations.

Improvement notices

What is an improvement notice?

An improvement notice is a notice issued to a landlord/tenant by the Chief Executive of MBIE for a breach or likely breach of the Act, regulations, or the tenancy agreement.

What must an improvement notice include?

An improvement notice must include the following information:

• a statement from the Chief Executive of MBIE that the person is in breach, or is likely to breach, a provision of the RTA, regulations or the tenancy agreement,
• which provision is, or is likely to be, breached,
• how the provision is, or is likely to be, breached,
• a reasonable time period for the person to remedy the breach (this may be extended).

The notice can be served in various ways – see our 'Serving notices' webpage.

Compliance with an improvement notice does not prevent legal action being taken.

Conditions of an improvement notice

The following conditions apply to improvement notices:

• Failure to comply with an improvement notice is an unlawful act and may result in a penalty
• An improvement notice may include recommendations, however failing to comply with those is not an unlawful act
• The Chief Executive of MBIE may withdraw an improvement notice – this does not prevent another one being served in relation to the same breach
• A person who has been issued with an improvement notice may file an objection with the Tenancy Tribunal within 28 days.

See the Objection to an improvement notice form [PDF, 266 KB]

Infringement notices

What is an infringement notice?

An infringement notice is a notice issued to a landlord by the Chief Executive of MBIE for an offence.

The full list of infringement offences and corresponding fines/fees is in new schedule 1B of the Residential Tenancies Act 1986(external link).

The difference between fines and fees is also explained in the Act.

What must an infringement notice include?

An infringement notice must include the following information:

• details of the alleged infringement offence (including time, place and nature)
• the amount of the infringement fee and how and when this must be paid
• a summary of the provisions of section 21(1) of the Summary Proceedings Act 1957
• a statement that the recipient of the notice has the right to request a hearing
• a statement saying what will happen if the recipient of the notice doesn’t pay and doesn’t request a hearing.

The notice can be served in various ways – see our 'Serving notices' webpage.

Conditions of an infringement notice

The following conditions apply to infringement notices:

• The Chief Executive of MBIE may withdraw an infringement notice before the fee is paid, or before a fine is ordered by a court.
• Only one of the following types of penalty can be used in relation to the same conduct:
  • an infringement fine, fee, or a term of imprisonment
  • an order to pay a penalty under the Act, or
  • an order to pay exemplary damages under the Act.
• A landlord who receives one of the above penalties can still be liable for damages or compensation in relation to the same conduct.

New unlawful acts and increased penalties

From 11 February 2021, new unlawful acts for tenants and landlords will take effect.

Existing unlawful acts will have increased penalties.

The full list of unlawful acts and corresponding exemplary damages is in schedule 1B of the Residential Tenancies Act 1986(external link).

Pecuniary penalties

Where a landlord of six or more tenancies or a boarding house has intentionally failed to meet their obligations in relation to key provisions of the Residential Tenancies Act 1986, MBIE can seek pecuniary penalties of up $50,000. These key provisions include:

• cleanliness
• maintenance
• the provision of smoke alarms
• ensuring the premises meet the healthy home standards or other building, health, and safety regulations
• terminating a tenancy without grounds, or
• issuing a retaliatory notice.