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COMMENT: Act against radical tenancy changes

New Zealand’s 290,000 rental property owners should resist radical changes to the Residential Tenancies Act both by submission and by their vote in this year’s election, argues Tenancies War spokesman Mike Butler.

Monday, March 2nd 2020, 5:05AM 1 Comment

The current Government has the despicable habit of treating some groups of New Zealanders as pariahs. And rental property owners have joined farmers as groups scapegoated for political gain.

With its Residential Tenancies Amendment Bill, the main changes that the Government wants are to:

• Remove a rental property owner’s contractual right to end a tenancy. Currently this may be done by issuing a 90-day notice that requires no reason to be stated. 

• Extend the current 21 days rent arrears as grounds to end a tenancy to at least 90 days.

• Allow two instances of anti-social behaviour every 90 days with the third such instance being grounds to apply to the Tenancy Tribunal to end the tenancy but only 28 days after the third notice has been given.

• Nullify any clause in a tenancy agreement prohibiting assignment of the tenancy by a tenant.

• Mandate that fixed-term tenancy agreements must become periodic tenancy agreements upon expiry unless both parties agree otherwise.

• Allow for identifying details to be blacked out in Tenancy Tribunal applications where a party has been successful.

• Ensure that tenants can add minor changes that can be removed at the end of the tenancy and the property restored to its original condition.

• Prohibit the solicitation of rental bids by landlords.

• Limit rent increases to once every 12 months.

• Require owners to permit and facilitate the installation of ultra-fast broadband.

The Government thinks it can allay concerns by allowing an owner to ask the Tribunal to end a tenancy if the tenant has been behind in rent or there were instances of anti-social behaviour on three occasions within 90 days.

It is unclear whether an owner must wait 90 days before approaching the Tribunal for help over three weeks of unpaid rent or for the resolution of anti-social behaviour that could have occurred in the first month of a tenancy.

But the fact that social housing providers, which includes the Government as the main provider, have exemptions shows that those who drafted this bill know that the changes are unworkable.

As part of the reforms, nearly all 75 clauses have been amended by adding a financial penalty and pointer to the table of penalties and fees. Only 14 of the 64 unlawful act penalties listed are for failures by tenants. None of the 23 infringements are actions by tenants.

This shows a heavy bias against property owners. For instance, there is no penalty for failure to pay rent which is the issue that takes up 72% of Tribunal time.

The biggest penalty is $7,200 for any owner failing to meet obligations in respect of cleanliness, maintenance, smoke alarms, the healthy homes standards, or buildings, health, and safety requirements. There is no obligation on tenants for cleanliness or safety.

While all rental property owners are targeted, the bill singles out those with six or more properties, regards properties owned related parties as the targeted owner’s properties, and doubles the penalties for any infringements by this group.

Will the changes encourage more to provide properties for rent? Probably not. Will some sell? Probably. Will there be fewer rental properties? Probably. Will rents continue to increase? Yes.

A raft of anti-landlord measures by the current Government has turned a housing shortage into a crisis and these proposed changes to law will embed the crisis for years.

It is possible to read the Bill here. Submissions on the Bill close at midnight on March 25 and submissions can be made here.

If the Bill passes into law, it is also possible to show your disgust by voting against those political parties that supported this heavily ideological and biased piece of legislation.

Mike Butler is a Hastings-based owner and manager of rental properties. He is also the founder of Stop the War on Tenancies.

 

Tags: healthy homes housing market housing shortage investment Kris Faafoi landlords property investment property management rental market rents supply tenancy reform Tenancy Services Tenancy Tribunal tenants

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Comments from our readers

On 3 March 2020 at 9:01 pm Denise D said:
Can someone please inform me as to where I look to find an easy to read/understand list of all the proposed changes. I have tried to read the bill but it doesn't answer my questions so feel that I am not informed enough and maybe even too confused to make a submission against the proposed changes. Some of the things that I have read through this website concern me enough to want to know more so that I CAN make a submission. I have been a private landlord of multiple properties for about 10yrs now and for the most part have had success with good long term tenants. Currently I do not allow assignments or subletting. We put in a lot of time and effort into finding the right tenant, one that will look after and respect your house and neighbourhood. With this process, we loose several weeks rent every time we need a new tenant, which we gave to accept, we just want the right person, to lessen the risk to our property. If tenants are allowed to assign the tenancy, who or what is now in control of our house. Certainly not the person we painstakingly selected and agreed to give the house to.
Another worry for me is 90 day notice. Can I give notice because we intend to sell the house? Can we give notice because I no longer think they are good tenants (eg continually getting 14 day notices for letting the gardens get full of weeds, or the house is always dirty and always needing a good clean). To me those tenants are no longer good tenants and no longer taking care of your property, as they promised they would. Then I dont want them to stay. Is this a just enough reason to end the tenancy in the eyes of the proposed changes. And if the tenant isn't happy with my reason for ending the tenancy, what are they going to do to the house in retaliation.
I'm all for long term rentals, we are long term landlords, but eventually we may need to sell a house or if we are not happy with the tenants I think we should be able take back our house.
I could go on and on but I need help clarifying the proposed changes, I could be barking up the wrong tree.

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