A service tenancy is where an employer provides an employee with a property to live in during their period of employment.
Service tenancies are like other tenancies in most ways
Service tenancies are covered by the Residential Tenancies Act. All the standard rules for landlords and tenants apply, except for a couple of differences. One difference is to do with rent in advance (if the landlord is deducting the rent from the tenant’s pay). The other is to do with the amount of notice needed to end the tenancy when the tenant’s employment ends.
Tenancy agreements are required
The landlord (employer) must provide the tenant (employee) with a written tenancy agreement. This records all the terms and conditions of the tenancy, such as how much the rent is. Even if the tenant isn’t paying any rent to live in the property, it’s still considered a service tenancy and all the rules for landlords and tenants apply.
Sometimes the tenancy agreement might be part of the employment contract, rather than a separate document. It is recommended that the agreements are separate.
Rent can be paid directly from the tenant’s wages
Sometimes the landlord can automatically deduct the rent from the tenant’s pay each week or fortnight. The landlord can only do this if:
- the tenant agrees
- it is written in the employment contract; or
- it is in accordance with employment law.
If the landlord pays the tenant for a longer period than usual because of an upcoming holiday, they can also take rent from the tenant’s pay for that same longer period.
Ending a service tenancy
A service tenancy usually lasts for as long as the tenant’s employment. The notice period is usually different to other tenancies.
Giving notice to end a tenancy details how much notice has to be given to end a service tenancy.
Minimum rights of employees apply
Employment law sets out the minimum rights and obligations that apply to employers and employees.
Minimum rights of employees(external link) are on MBIE's Employment New Zealand website.
Other Legal Obligations
There are other legal obligations that an employer/landlord must comply with.
WorkSafe New Zealand(external link) has information on safe working environments (including accommodation).
Standard of housing/accommodation provided by an employer(external link) is on the WorkSafe website.