The new Act introduces some helpful protections to both tenants and landlords. If you are involved in the residential tenancy sector, make sure that you use the new standard form lease and conditions report. These can be downloaded from the Department of Fair Trading website (see link above).
From a conveyancing/property law perspective, one of the most significant changes is in Section 8, which lists the agreements to which the Act does not apply. In particular, the following in relation to contracts for sale:
"(f) an agreement for the sale of land that confers a right to occupy residential premises on a party to the
agreement,"
Compare the above with the relevant part in the old act:
"(a) if the tenant is a party to an agreement made in good faith for the sale or purchase of the residential
premises,"
There appears to be a noticeable difference in coverage between the two sections. The old provision covered any tenancy arrangements where the tenant is either a vendor or purchaser in a transaction. The new provision only applies to rights to occupy that are specifically part of the agreement for sale.
If there is a possibility of the purchaser or the vendor becoming a tenant in the property, then you will need to consider whether a right to occupy should be inserted into the contract to avoid coming under the Act.
Jonathan Marquet
Emil Ford & Co.
