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COMMENT: The truth about tenancy terminations

The Government wants to get rid of “no-cause” tenancy terminations. Auckland Property Investors Association vice president Peter Lewis explains why that is a bad idea.

Tuesday, November 5th 2019, 10:27AM 6 Comments

Sandra has a problem. She and her husband, Terry, live in a small house down a private right-of-way. They have been there for a few years, and like the location. It is handy to Terry’s work and Sandra can easily catch the bus to her part-time job as a teacher’s aide.

The neighbouring house on the road frontage is a rental and some months ago new tenants moved in. Although the previous occupants were pleasant and quiet, the new tenants are not. After they had lived there for just two nights Sandra heard them screaming at each other, obviously holding a noisy and heated domestic argument.

This has now become a regular occurrence. They also take drugs, get drunk regularly, fight, have large and intimidating gang members visiting, play deafening music until the early hours, and regularly have the police calling on them.

“So what can we do about it?”, Sandra asked. “Find out who is the landlord”, she was told. “And ask them to take action”.

The landlords, she discovered, are Housing New Zealand. So Sandra spoke to the property manager there and voiced her concerns.

“We can discuss the problem with those tenants” she was told. “And help them to behave better. We have an overall aim of maintaining sustainable tenancies and to help people remain in, or get back to, a state of well-being and assist them to lead happy, balanced, fulfilling lives.”

“But what about us?” asked Sandra. “If these people continue carry on like this, will you get rid of them? They are causing havoc in the neighbourhood!”

“Like all landlords, we work under the Residential Tenancies Act” said the manager. “There are provisions under that Act to terminate the tenancies of people who exhibit anti-social behaviour. However, we have been instructed by the Government that we are not to use this provision, and instead we must work with our clients to help them live better lives”.

“While we suffer!” said Sandra.

Not content with leaving the neighbours of HNZ houses vulnerable to feral tenants like these, the Government is now considering removing the ability for all landlords to terminate a tenancy with what they call a 90 day “no reason” notice. This change would apply to both Housing New Zealand and all private landlords.

Sandra is not a tenant. She and Terry own their own home, but they now have to put up with neighbours from hell.  They could sell, but why should they be forced out? And who would buy? So this move affects everyone – owner-occupiers, the good tenants next to the problem tenants, and landlords.

The publicity around this proposal seems to be based on some fundamental misconceptions around the powers of landlords and their behaviour.

There is actually no such thing as a “no reason 90-day termination notice”. There is always a reason why a landlord would issue such a notice. To state the reason is to give grounds for an argument and for the subsequent making of false promises about improvements in behaviour and conduct - promises that are seldom kept.

Every sane landlord’s fundamental desire is to keep every rental property tenanted for every day of the year. That’s the way they maximise their cashflow and thus their income. No landlord terminates a tenancy just on a whim, because they feel like it.

A day’s vacancy is a day’s rent they can never recover, and most terminations result in a week or more between tenants moving out and the new tenants moving in. That is income permanently lost.

Contrary to widespread belief, a landlord cannot evict a tenant. “Eviction” sounds great in the shock-horror media stories, but no residential landlord actually has the power to evict. They can terminate a tenancy within the legal timeframes, but if the tenant then refuses to leave the property the landlord must then go to the Tenancy Tribunal and ask for a Possession Order.

If then, despite the Possession Order and the presence of a bailiff, the tenant still occupies the property the landlord must then go to the District Court with their Possession Order and request an Eviction Order. If the District Court issues that Order the landlord must then take that to the police for them to carry out the eviction. 

Thus an eviction is a matter for the District Court and the Police, never the landlord. The popular image of jackbooted landlords evicting tenants right, left and centre is pure fabrication.

If the proposal to remove 90-day notice termination proceeds any disruptive and socially undesirable tenants could only be removed by a Tribunal  ruling. This would need proof from their neighbours as witnesses to their misdeed.

Sandra, like most people, would be fearful of giving evidence in front of a Tenancy Adjudicator against their feral neighbours while their intimidating gang associates look on. This opens up the potential for verbal abuse and physical retaliation.

It is likely that this change will be accompanied by the removal of the fixed-term tenancy option so, in effect, all tenancies will be periodic, only terminating either when the tenant chooses to depart or can be proven to have breached either the Tenancy Act or the tenancy agreement. Even on a sale of the property the tenant would have the right to remain.

The property may well be trapped into the rental market and, if sold, that would have to be to another landlord, not a potential owner-occupier.

Would people rent out their own home while they are away overseas for a year or two? Probably not, as under this proposal it would be impossible to regain occupation of the property when they return. Once a rental, always a rental. Thus we would see these houses sitting empty and dusty while the homeless huddle shivering in the streets.

So who would benefit if the Governments proposal to eliminate the 90-day notice option is adopted? Feral and life-incompetent tenants. Who would suffer? All other housing occupants, both owner-occupiers and good tenants.

Wherever you live, however you live, regardless of your home ownership status, your life could easily be made miserable, your sleep ruined, and your family threatened because no landlord, public or private, would be able to control the behaviour of those who would now have unfettered occupation of their property.

Read more:

Bad behaviour behind most 90-day notices 

Tags: compliance conduct disputes housing market housing shortage landlords property investment property management rental market tenancy reform Tenancy Services Tenancy Tribunal tenants

« COMMENT: Sign of changing timesCOMMENT: Removing 90-day notices - the impacts »

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Comments from our readers

On 5 November 2019 at 11:10 am markroaming said:
The deal breaker is "It is likely that this change will be accompanied by the removal of the fixed-term tenancy option".
This would cause enormous havoc in the rental market when it is already dire for tenants.
On 5 November 2019 at 12:44 pm Janice111 said:
As usual, great down to earth, common sense article written by Peter. This Labour Government is naive and gives all the power to those who haven't earnt it and so everyone suffers. It's PC gone mad alright. And they'll never wake up, they're too entrenched into that mentality. This government is encouraging bad behaviour and some must be laughing their heads off.
On 5 November 2019 at 1:56 pm Garrick said:
Why don't rental property owners write to the relevant MP and tell them whey won't vote for the present Government at the next election if they remove the 90 day termination provision.
On 5 November 2019 at 3:29 pm bArt said:
Was only a part time landlord a while ago actually but I take an interest. Yes I totally agree with the premise of this article which carefully outlines all of the conditions and rights under current law of tenants, neighbours, prospective buyers etc. This issue more broadly also has something to do with civilisation and how uncivil some people can be (yes, including some bad LL'ds.) but this move would create a greater perverse effect in order to elevate the status and rights of people who "don't know... don't care...".
On 6 November 2019 at 3:08 pm bbourke said:
I think a solution to this proposal (and the right to have pets etc) is to offer 90 day fixed term tenancies - or maybe even 90 day rolling tenancies (yes- I realise that they want to stop fixed term tenancies as well but that would cause bigger problems than banning 'No Cause'). The tenancy can be terminated by either party at any time during the tenancy.
There will be ways around such stupid ideas - eg: to bring in parents of young tenants as guarantors. Or fit noise sensors into the power supply so that if noise goes above 120 dB the power cuts off (yes its an available relay) and it can be located inside a wall for example.
There will be a smart legal mind working on the challenge - if not theyve already come up with a solution.
On 17 November 2019 at 10:04 am BruceH said:
"There are provisions under that Act to terminate the tenancies of people who exhibit anti-social behaviour. However, we have been instructed by the Government that we are not to use this provision, and instead we must work with our clients to help them live better lives"
HNZ have a moral & legal ibligation to ensure the the rights of the neighbours are protected. If the statement made is true the HNZ are blatentently & intentionally beaching their duty, which by inclusion in the RTA has intent to be acted on not disregarded. It's in the RTA to protect the rights of others.
If we consider the definition used by the Ministry of Social Development in The Social Development Approach (2001:1), social policy is defined to include “all policy that has an influence on desirable social outcomes” That therefore includes HNZ's policies.
By having a policy that contradicts the RTA & MSD policy is irresponsible & nothing but disgusting.

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