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20-11-2019

All New Zealand will be affected by tenancy changes

Government has announced the changes they intend to make to the Residential Tenancy Act. We managed to get some wins, such as the rules around pets will not change and modifications that tenants can make to the property are minor and still need the landlord’s consent.

Rental prices can only be increased once a year, which I think will be good for landlords. Too many owner managers don’t increase rents with sitting tenants. Making increases annual will create an expectation that rental prices will increase each anniversary of the tenancy starting.

There were some disappointing aspects however. The main issue was removing the benefit of the 90-day notice by stipulating certain criteria for when a tenancy can end. Assuming that landlords would use fixed term tenancies to get around this, they will also prevent landlords from ending a tenancy when the fixed term comes to an end if the tenant decides they want to continue living there.

There are a number of reasons why we should be extremely concerned by this. While the reason for the change has been portrayed as stopping landlords kicking out good tenants for no reason, we all know that there is ALWAYS a good reason for ending a tenancy. Only 3% of tenants receive a 90-day notice each year and nearly half of them are for antisocial behaviour affecting neighbours.

Supporters of the Government’s changes have said why be concerned if you rarely use these notices? We are concerned because it means that it will be extremely hard to move on the roughly 7,000 antisocial tenants that we currently manage through a 90-day notice. If these changes become law, neighbours must complain about antisocial behaviour three times and landlords need to inform their tenant of each complaint. Even then we cannot end the tenancy, as we must go to the Tenancy Tribunal to first get permission. Only then can a 90-day notice be issued, with no protection for the neighbour during that time.

We know that neighbours of antisocial tenants are reluctant to get involved by providing evidence of the antisocial behaviour. If the affected neighbours are tenants themselves, they will likely move. It will be harder for owner occupiers who may just have to accept the risk of making a written complaint or put up with the antisocial behaviour.

This brings me to other reasons why these changes should concern us. Would you want to live next door to antisocial tenants knowing their landlord cannot help you? What if your rental property is next door to antisocial tenants and your tenants decide to move instead of risking making a complaint. Think of the increase in tenant turnover while antisocial tenants remain protected.

The New Zealand Property Investors’ Federation (NZPIF) is the only organisation that has researched the use of 90-day notices. In a survey of over 1,300 rental property providers, it was established that only 3% of tenants a year receive a 90-day notice. This shows that 90-day notices are not used frequently, but as a tool of last resort.

If antisocial tenants are not held to account, it is likely that the number of them will increase beyond the current 7,000. Good and respectful households, both owned and rented, may face a one in ten chance of having their lives disrupted by an antisocial tenant.

Our message to New Zealand is that if this proposal comes into law, landlords will no longer have the ability to help and protect you. This is not a tenancy matter between landlords and their tenants; this is a matter between antisocial tenants and the good people who have the misfortune to live next door to them. This is an issue for all communities.

Other aspects of the proposals are that the powers of the MBIE Compliance Team is to be increased. They will be able to apply instant fines to landlords rather than going through the Tenancy Tribunal and will have new Civil Penalties that will only apply to landlords with six or more tenancies.

These proposals will next be written into a Bill to go before Parliament, probably around February/March next year. It will then go through select committee hearings where we should get an opportunity to voice our concerns.

If you are concerned about these changes, then take action right now. Call talkback radio, write letter to the Editor and write to your local MP. There is further information on the NZPIF website. If you are not already a member, you can join or at least sign up for free information at www.nzpif.org/newsletter.

Tags: federation reports

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