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[OPINION] No-cause terminations not the answer

Will reversing no-cause terminations be the solution to removing anti-social tenants?

Tuesday, May 23rd 2023, 12:54PM 2 Comments

By David Faulkner - General manager of Property Brokers

Many will be aware National has stated it will reverse the law change made under this Government allowing landlords to give tenants notice without a valid reason.

There will be many landlords who support this move. Landlords should have the ability to remove problematic tenants quickly and easily. The current law does not allow for this.

It can be challenging to obtain sufficient evidence to seek termination through the Tenancy Tribunal against a troublesome tenant who is antisocial and proving to be a problem within the neighbourhood. Even if you do, there is no guarantee the adjudicator will terminate the tenancy.

In 2020, we witnessed significant changes to the Residential Tenancies Act that strengthened tenants' rights.

One of the many changes was the removal of no-cause terminations. Landlords had to provide a valid reason for ending a tenancy. Many feel the pendulum swung too far in favour of tenants.

National argues that the law change has proven to hurt many tenants, who, for whatever reason, typically struggle to find a property to rent.

Some tenants may have a poor credit history, or their personal circumstances may pose too high a risk. In the past, some landlords would give these marginalised tenants a trial period, and if things didn't work out, they could remove them easily.

As a property manager many years ago, I would convince some landlords to give tenants who fell into this criterion a tenancy by placing them on shorter fixed-term agreements. If things didn't work out, their tenancies would not be renewed, and they would leave. Everything worked well when I did this; the tenancy continued without major issues.

Tenancy law needs to protect both landlords and tenants. A landlord chooses to be a landlord; a tenant often has no choice, so the law needs to offer them greater protection.

However, more than 85% of rental accommodation is provided by the private sector - so, if we make being a landlord too hard, who will provide accommodation for approximately one-third of the population?

The state can only house some people. This Government may have started out with the best intentions, but it has largely failed to deliver on the bold targets it set for housing and to make life better for renters. A social housing waitlist and skyrocketing rents are evidence of this.

Despite the RTA needing fine-tuning, it largely has the balance right. The law should make it easier for landlords to remove antisocial tenants. Currently, it does not do this.

A landlord must serve the antisocial tenant three notices within 90 days. In the notice, the tenant must be informed of what the antisocial behaviour is, who is involved, what date, time, and location it took place, and how many notices have been served. It must also explain the tenant has the right to challenge the notice.

When applying to the tribunal, evidence such as witness statements, noise control reports, and more must be submitted.

Even then, there is no guarantee that the tenancy will be terminated as the adjudicator will look at the tenant's personal circumstances.

Also, one must consider the time it takes to get a date at the tribunal, and this process can only be done for periodic tenancies. None of this applies if you have a fixed-term tenancy.

Here lies the problem. It is simply too hard, with no guarantee of a positive outcome, to deal with and remove antisocial tenants.

It is a reform of the RTA and speeding up tribunal proceedings which is the answer to the challenge around antisocial behaviour.

Tenants need protection and should exercise their rights without fear of retribution from a landlord. Tenants will be less likely to do so if there is an underlying fear that a landlord can issue a 90-day notice without reason.

The best way National can support landlords is to remove the draconian interest deductibility rule that Labour introduced and fine-tune the RTA, making it easier for landlords to remove antisocial tenants.

Tags: property management

« [OPINION] Property always goes up or does it?[OPINION] Property investors just as guilty of short-termism as stock market investors »

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Comments from our readers

On 24 May 2023 at 6:17 am Glenn Morris said:
The RTA had a bit added to deal with the so called antisocial tenants. Those clauses are almost impossible to use.

I would guess those clauses were added because a submission was made about anti social actions.

But there were many other reasons to terminate periodic tenancies with 90 day notices such as having pets, piles of rubbish, domestic violence, drug use, and overloading.

None of these breaches are easy to deal with in the tribunal and none are anti social. The other compounding issue is fixed term tenancies can not be ended at the end of a fixed period.

So landlords are now stuck with the bad eggs.
On 25 May 2023 at 4:40 am Peter Lewis said:
There is no such thing as a 'no cause termination ' or a 'no reason termination '.

There is always a cause or a reason.

No sensible landlord gets rid of a tenant just because they can - after all, that costs the landord money in lost rent.

What it actually is, and should be called, is a 'no stated reason termination '.

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