Pet-Friendly Rentals Set To Be The Norm

Pet Friendly Rentals Set To Be The Norm

New pet rules for tenants expected to come into effect in the next few months following tenancy laws passed in late 2024. The new rules will make it easier for tenants to have pets while also ensuring they’re liable for pet-related damage. With the rental sector growing and the proportion of owner-occupiers shrinking, we see it as a necessary shift that will set the rental market up for more stability.

What’s Changing Exactly?

Under the new rules, if a tenant asks to have a pet, a landlord can only decline ‘on reasonable grounds’. Previously landlords, have had broad discretion, most opting for a blanket ‘no pets’ approach. The process of obtaining permission for pets is also becoming more transparent and tenancy agreements will have clear pet-related clauses including around damage. They will also be able to ask for a ‘pet bond’ of up to two weeks’ rent.

When Will The New Rules Come Into Effect?

Late 2025, but the exact date has not been set. The changes will only apply to tenancies starting on or after the rules begin, meaning existing tenancy agreements will remain unaffected.

Why The Changes?

63% of New Zealand households currently own a pet – they are clearly important to a lot of us. However, pets have only occasionally been permitted in rental properties and it’s one of many reasons why renting long-term isn’t an appealing proposition. Evidence from overseas suggests pet-inclusive tenancy laws go a long way to elevating the status of renting, enabling tenants to make a house feel like a home, resulting in longer-term tenancies, better upkeep and generally stronger relationships between landlord and tenant. This creates more stability in the market and has some significant flow-on effects for our communities, with long-term tenants becoming more invested and involved in their neighbourhoods. It’s important to note that Australia, the UK and many parts of the US and Europe are all heading in this direction too and that the renting population of New Zealand is increasing year-on-year, as home ownership becomes financially out of reach.

What Does It Mean For Rentals On Cross-Lease Titles?

If a rental property is on a cross-lease, it will likely have pet prohibitions embedded in the title, and the new laws will not override this. While it is possible to amend the title and lift the prohibition, it’s not a straightforward process. For added context, we estimate there are between 3000-5000 cross-lease properties in Hamilton and suspect over half are tenanted opposed to owner-occupied.

How Will Landlords Be Protected?

The new framework includes a raft of protections for those who own rental properties, which include:

• Pet bonds or higher damage thresholds: landlords will likely be able to request some form of extra cover to account for potential wear and tear.
• Defined expectations for tenants: tenants remain responsible for their pets, and they must ensure the property is kept in good condition.
• Clarity in agreements: tenancy agreements will include pet-related clauses, outlining what is and isn’t acceptable.

When Can A Landlord Decline A Request?

Landlords will no longer be able to refuse a request to keep a pet based on personal preference. They must reply in writing to requests from tenants, considering a defined set of criteria and can only decline on ‘reasonable grounds’. A tenant can also elect to challenge the decision via the Tenancy Tribunal. Examples of ‘reasonable grounds’ for pet refusal, include:

• Property unsuitability: the premises are not appropriate for the pet due to issues like insufficient fencing or lack of outdoor space.
• Local body rules or relevant bylaws prohibit keeping pets on the property. For example, apartments with strict body corporate rules against animals.
• Animal specific concerns e.g., menacing dogs or those a history of attacking people, livestock, or other pets, or propensity to cause disruption or damage.
• Previous non-compliance: The tenant has previously failed to comply with reasonable conditions regarding keeping a pet in the tenancy.

Looking Ahead

We understand many investors and landlords are nervous about the changes ahead – it’ is a significant step in the evolution of our housing market. At Lodge City Rentals, we’re committed to supporting them through the transition. We believe that allowing pets doesn’t have to mean compromising on property standards. When managed well, it can mean happier tenants, more secure tenancies, and thriving investments.