Residential Tenancies Act 1986

Tenancy agreements - Key money, bonds, and rents

17: Requiring key money prohibited

You could also call this:

“You can't be asked to pay extra money to get or keep renting a place, unless the Tenancy Tribunal says it's okay.”

You can’t be asked to pay key money for a tenancy agreement without permission from the Tenancy Tribunal. Key money is not allowed when you start, continue, extend, change, or renew a tenancy. It’s also not allowed if you want to transfer your tenancy to someone else or sublet part of the property.

This rule doesn’t affect section 44A, which lets a landlord recover reasonable costs when they agree to you assigning, subletting, or ending your tenancy early.

If someone asks you for key money when they shouldn’t, it’s against the law. Landlords who break this rule can be fined or given an infringement fee as listed in Schedule 1B.

There are a few exceptions to this rule. You might have to pay a sum for an option to enter a tenancy, but it can’t be more than one week’s rent and must be refunded or used as rent if you take the tenancy. Landlords can also ask for payments that are allowed by other parts of this Act or that fall into a special class defined by the law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM95040.

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Part 2 Tenancy agreements
Key money, bonds, and rents

17Requiring key money prohibited

  1. Subject to subsection (4), no person shall, without the prior consent of the Tribunal, require the payment of key money in respect of—

  2. the grant, continuance, extension, variation, or renewal of any tenancy agreement; or
    1. the assignment of a tenant's interest under any tenancy agreement; or
      1. the subletting of the whole or any part of the premises by a tenant.
        1. Nothing in subsection (1) limits or affects section 44A (which entitles a landlord to recover reasonable expenses on consenting to the tenant’s assigning, subletting, or parting with possession of the premises, or to termination of the tenancy by agreement).

        2. The requiring of key money in contravention of subsection (1) is hereby declared to be an unlawful act.

        3. A landlord who contravenes subsection (1) commits an infringement offence and is liable to a fine or an infringement fee specified in Schedule 1B.

        4. Subsection (1) shall not apply to any of the following:

        5. any sum required or received for an option to enter into a tenancy agreement if the sum does not exceed 1 week's rent payable under the agreement, and, upon the option being exercised, the sum is refunded or is applied toward the rent:
          1. any sum that the landlord is authorised by any other provision of this Act to require or receive:
              1. any payment of a prescribed class.
                Compare
                • 1973 No 26 s 22
                • Residential Tenancies Act 1978–1981 s 30 (SA)
                Notes
                • Section 17(2): replaced, on , by section 12(1) of the Residential Tenancies Amendment Act 2020 (2020 No 59).
                • Section 17(3A): inserted, on , by section 12(2) of the Residential Tenancies Amendment Act 2020 (2020 No 59).
                • Section 17(4)(c): repealed, on , by section 6 of the Residential Tenancies (Prohibiting Letting Fees) Amendment Act 2018 (2018 No 44).