01 October 2018

Have your say on tenancy regulations

Time is running out for landlords to provide feedback to the Government on two key issues that will have significant effects on the residential property rental sector.

Submissions on proposed changes to the Residential Tenancies Act and the Healthy Homes Guarantee Act close on October 21 and 22 respectively.

The Government says its proposed reform of tenancy laws aims to "make life better for renters" by:

  1. Improving tenants’ security and stability while protecting landlords’ interests
  2. Ensuring the law appropriately balances the rights and responsibilities of tenants and landlords and helps renters feel at home
  3. Modernising the legislation so it can respond to the changing trends in the rental market
  4. Improving the quality of boarding houses and the accountability of boarding house landlords.

Contentious proposals on which the Government is seeking feedback include

  1. Ending no cause terminations while ensuring landlords are still able to end tenancies for justifiable reasons
  2. Increasing the amount of notice a landlord must generally give tenants to terminate a tenancy from 42 days to 90 days
  3. Whether changes to fixed-term agreements are justified to improve security of tenure
  4. Limiting rent increases to once a year
  5. Whether there should be limitations on the practice of ‘rent bidding’ 
  6. Whether further controls for boarding houses are needed to provide adequate protection for boarding house tenants
  7. Introducing new tools and processes into the compliance and enforcement system.

The discussion document and a link to an online submission survey are available at:  www.mbie.govt.nz/rta-reform .

Consultation closes at 5pm, on Sunday 21 October 2018.

NZ Property Investors Federation (NZPIF) executive officer Andrew King says some of the proposed tenancy law changes, including increasing the termination notice period to 90 days would make problem tenancies significantly harder to deal with.

The NZPIF has also called for stronger rules around rental payments to dissuade tenants from not paying.This could involve the ability to charge interest on outstanding rent, the ability to charge tenants’ credit cards or exemplary damages if they don't pay their rent, and faster access to the Tenancy Tribunal for rent arrears cases.

Tony Alexander, Chief Economist at the Bank of New Zealand, predicts the regulations will make property owners more selective about who they allow into their properties, and rent rises when tenants change will likely increase while demand for state housing also rises. He said some investors would sell, worsening the housing shortage.