Industry Backlash to Proposed Rental Rule Changes

Backlash to proposed changes to the Residential Tenancies Act is growing amongst rental sector organisations.

The Real Estate Institute of New Zealand (REINZ) and NZ Property Investors’ Federation (NZPIF) have both shown extreme concern around the suggested amendments around landlords’ eviction rights.

What are the proposed changes to the Residential Tenancies Act 1986?

The proposed Act changes announced in November 2019 are “designed to provide a balance between the rights and responsibilities of both tenants and landlords”, according to Associate Housing Minister, Kris Faafoi.

The proposed changes will seek to:

• Remove the ability for landlords to end a periodic tenancy agreement with no cause. The legislation will instead provide for a range of justified reasons to end a periodic tenancy, including new provisions to respond to antisocial behaviour.
• Prohibit the solicitation of rental bids by landlords and limit rent increases to once every twelve months.
• Require that fixed-term tenancy agreements must become periodic tenancy agreements upon expiry unless: both parties agree otherwise, the tenant is not meeting their obligations, or specified grounds for the tenancy to end apply.
• Increase financial penalties and give the regulator (through the Tenancy Compliance and Investigations team) new tools to take direct action against parties who are not meeting their obligations.
• Allow for identifying details to be anonymised in situations where a party has been wholly or substantially successful when taking a case to the Tenancy Tribunal.
• Ensure that tenants can add minor fittings such as brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells, and hang pictures.

Why are industry organisations challenging the changes?

Chief executive of REINZ, Bindi Norwell said if the proposed changes around the current 90-day eviction rule go ahead, it may be the final straw for landlords.

In February Norwell told Newshub that if the changes go through, “rental property owners will have limited abilities to remove tenants who are causing problems in their properties or causing trouble with neighbours.”

NZPIF also weighed in on the changes, Executive Officer Andrew King expressing concerns “that the proposed changes to the no-cause 90-day notice will mean owners effectively can’t control who lives in their property, and in some cases this could impact directly on neighbours.”

King shared Norwell’s finalstraw sentiment, saying “We believe this change will cause investors to leave the market, pushing up rental prices even further for tenants who are already struggling to pay the rent.”

Limits to rent rises

Both REINZ and NZPIF — who collectively represent 20,000 real estate professionals and landlords — said they would be happy to support the proposed rent rises change, limiting them to once every 12 months and preventing landlords from rental bidding.

What stage are the proposed RTA amendments up to?

These changes have been drafted in a Bill to amend the Residential Tenancies Act 1986, which had its first reading before Parliament in February.

Drop us a line to learn more about your rights as a tenant or landlord, and how McPherson Property Management can help you get the most out of your investment property.

Images:

Scales Of Justice by vaXzine via CC BY-NC-ND 2.0.