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June 2001

A Warning To Landlords On Waste Water Charges

Residential Tenancies Act: Waste Water Charges

Section 39 of the Residential Tenancies Act defines which outgoings on the property are payable by the landlord and which are payable by the tenant. Included in the tenant’s obligations under section 39(2) is the obligation for the tenant to pay water charges.

However, if the tenanted property happens to be in an area where the water is supplied and billed by a private company (such as United Water in Papakura district) landlords may find themselves liable to pay the waste water and sewage levies included in those water accounts, notwithstanding that the Residential Tenancy Agreement states that the tenant pay for the water charges.

Private water companies, as a rule, charge a levy for waste water/sewage at a flat percentage of the total cost of the water used (usually 80 percent). Because section 39 does not contemplate sewage and waste water charges as a separate outgoing, the Residential Tenancies Tribunal has ruled that in the absence of specific agreement in the Tenancy Agreement, then those charges will be payable by the landlord.

These costs can mount up if your tenants do not exercise water conservation.

If you are entering into a Residential Tenancy Agreement in an area where the water is supplied by a private water company and waste water and sewage are billed as part of the water rates, we would recommend that you include as a specific term of the Tenancy Agreement that the waste water and sewage charges are payable by the tenant.