Major Change in RTA 2020 | Assignments of Tenancy

Under the RTA Amendment Act 2020 there has been a major change in Section 43.

Previously in Tenancy Agreements, the legislations distinguished between Tenancy Agreements that prohibited Assignments and those that allowed them with the owners' permission.

Now, the Act requires that all Assignments at lease be considered by the owners who may not withhold consent unreasonably. We can now not ubiquitously disallow Assignments of Tenancy, nor can we contract against them in the Tenancy Agreement. Owners must be seen to be reasonable, considering any and all assignments.

43C Effect of Assignment by a Tenant

(1) A tenant who assigns a tenancy with the consent of the landlord and in accordance with any attachment to any of the conditions, ceases, on the date of which the assignment takes effect, to be responsible to the landlord for the obligations imposed on the tenant by the agreement and this Act.

(2) Subsection (1) does not affect any liability already incurred by the tenant to the landlord for anything done before the date on which the assignment takes effect

Section 43C inserted, on 11th February 2021 by section 24 of the Residential Tenancy Amendments Act 2020 (2020 number 59)

One of the big questions is...

Can an assignment involve one tenant leaving a group of tenants and another new tenant joining that group of tenants? And how does this affect the joint and several liabilities of the tenant, who is the assigner?

The reality is we are safest to draw up and new Tenancy as a new group and ‘end ‘ the current group tenancy. More paperwork. Same result as before.

As always, if you need help managing your properties, choose A Grade Property Management. We do Property Properly.

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