Tenancy law changes: Landlords uneasy over reforms bringing more protection for renters

By Harry Lock for RNZ

Powerful new tenancy regulations, which advocates say will shift the balance of power between landlord and tenant, sweep into effect today.

Gone is the ability for landlords to encourage bidding wars or end tenancies with no reason. In come rules which make it easier for renters to decorate their homes.

“The changes coming through are enormous,” Sharon Cullwick from the Property Investors Federation said.

“They’re enormous for landlords, they’re enormous for tenants as well.”

The law was passed in August and is being implemented in three phases. The second – and by far the largest phase – begins today.

But ahead of that coming in, there have been reports of landlords getting rid of tenants while they still can; and landlords even selling up their properties because they can’t be bothered to deal with the new regulations.

What are the changes and what do they mean?

The associate minister Poto Williams said the changes mean rental laws are now fit for the times, for the first time in a generation.

“This government believes the updated rental laws now provide adequate protections for both tenants and landlords,” she said.

“The reforms have come at a time when Kiwis are renting now more than ever, including whānau and older people.”

The changes which come into effect today are aimed at providing more security and power for tenants.

• Landlords will need a proper reason when they end someone’s periodic tenancy. Currently, they do not.

• All fixed-term tenancy agreements will automatically move onto a periodic tenancy, unless otherwise agreed.

• Tenants can make minor changes (painting the walls, hanging up pictures etc) and landlords can’t refuse.

• Rental property adverts must show a price, to avoid bid-offs between renters which drives prices up.

• Tenants can request fibre broadband, and if it’s of no added cost to landlords, they can’t refuse.

• Successful applicants at the Tenancy Tribunal can now apply to have name suppression so they won’t be blacklisted.

• Landlords must consider all tenancy assignment requests, and not decline them unreasonably.

• Landlords must provide a tenancy agreement in writing.

• The regulator (the Ministry of Business, Innovation and Employment) will be granted new powers to take action against parties not meeting their obligation.

• The Tenancy Tribunal can now impose fines of up to $100,000 where previously the maximum fine was $50,000.

“The Government has been mindful of the need to modernise the law in a way which is proportionate,” Williams said.

“These changes get the balance right, ensuring landlords continue to have the tools they need to manage their business. Both landlords and tenants can benefit from increased security and certainty.”

The change which excited Nelson-based renter Brenda Mary the most is the right for tenants to make their house a home.

“When you hear a lot of the tenancy issues being discussed, owning a rental property is sort of seen as a business; living in a rental property is a home.

“I think people are going to take more care of a building that’s their home, and they’ve actually got an emotional investment in.”

Meanwhile, the end of 90-day no cause terminations is a win for tenants, which Brenda Mary directly experienced three years ago.

“I hope it means that tenants live somewhere that’s a home. That you’re not moving every two years, particularly for children.

“That’s, I think, the biggest thing. And it’s a narrative I’m hearing over and over again. There’s just not that continuity for families.”

Some reservations

Sharon Cullwick from the Property Investors Federation said the ending of 90-day no cause terminations is worrying owners.

“It is the landlord’s property, after all. So that’s a big change, because it’s going to be very hard to remove a tenant, unless it’s antisocial behaviour, or certain things they’ve stipulated.

“So that’s going to be a really big change.”

She said it will have a knock-on effect for what she calls “marginal tenants”, who landlords won’t want to take on if they can’t remove them easily.

Overall, she agreed the reforms are a move in the right direction – but she doesn’t want any more.

“I don’t think they should bring any more changes. They need to let the dust settle.

“There’s a lot of changes that have come through in the last few years.”

Changes don't solve deep-rooted issue – tenant

But with the average rental price up 4 percent on last year, one renter – who wished to remain anonymous – said today’s changes won’t fix affordability.

“It’s just a little tiny Band-aid on a giant big gaping wound, that’s not going to really solve the deep-rooted issue, that greed in this country over housing has just taken off basically. It’s just out of control.

She is on the cusp of going to the Tenancy Tribunal over her current housing situation – but is scared to risk publicising her name and ending up on a landlord’s blacklist.

She said the Residential Tenancies Act is failing renters.

“The RTA needs a massive overhaul, because it still doesn’t account for the fact that free market forces are in play.

“We talk about things like market rent. What does that even mean? Who determines that?”

She said she wants the government to set up a working group to look into the law, and how it can be more fundamentally changed.

The final phase of the reforms will come in on August 11.

Source: Read Full Article