Proposed Changes to Tenancy Law

Mike ReedUncategorized

December 2019

The key changes include:

  • Limit rent increases to once every 12 months and banning the solicitation of rental bids by landlords.
  • Improve a tenants security  by removing a landlord’s right to use no cause terminations to end a periodic tenancy agreement.
  • Making rental properties safer and more live able by letting tenants add minor fittings such as brackets to secure furniture against earthquake risk, to baby proof the property, install visual fire alarms and doorbells, and hang pictures.
  • Improve compliance with the law by increasing financial penalties and introducing new tools to take direct action against parties who are not meeting their obligations.

This is my opinion of these changes with 20 years of experience being a property investor and owning a Management company. We treat all of our tenants with respect, courtesy and allow them to make our house their home

Limit rent increases to once every 12 months

I totally agree and have never increased rent more than once a year or taken rental bids. I had a tenant offer $30 more than the asking price last week, I said I try and pick the best tenant not take the highest rent offered.

Improve tenant’s security by removing a landlord’s right to use no cause terminations to end a periodic tenancy agreement.

This is the dumbest suggestion to help tenants I have ever seen. They are proposing Periodic tenancies can only be ended by a landlord for specific reasons, giving 90-days notice. The reasons are:

1. To sell the property (Vacant position notice is also increased to 90 days.)

2. To use the premises for business purposes. (Could be to rent on Air BNB)

 3. To carry out extensive alterations where it would be impractical for the tenant to remain.

4. Demolishing the property

5. If the landlord is not the owner and is ending their association (i.e. HNZ ending their lease)

6. If 3 notices for separate antisocial acts within a 90-day period are given to the tenant. (The landlord must still apply and provide proof to the Tenancy Tribunal to end the tenancy)

7. If the tenant has been at least 5 days late in paying the rent over a 90-day period.

I rented a house on Tuesday 2 days after this was announced. Two people who viewed stated they had a chequered credit history but they would be great tenants and please give them a chance. I asked them if the had heard about the Governments RTA changes and the increased risks to property owners if we now give them a chance. They had no idea this had happened but by the look on their faces, they realised life had become tougher for them to find a home for their families.

Ive given people chances in the past, especially to rent my own properties, around 2/3rds have been great tenants the rest have caused problems.

Would I be prepared to do this again if these changes become law next year ?

I like to offer fixed term tenancies for 1 year then offer another year if both parties are happy. The biggest decision we make is the choice of tenants for each property. I am discussing this with a owner at the moment, 3 single tenants coming to the end of their first year. They have caused some disturbance to the neighbours with parties and people using the shared driveway. The decision has become a lot harder to offer them another year.

If the only way to remove a tenant causing problems (Ive only issued a 90 day notice for anti- social behaviour once in 20 Years) is through the tenancy tribunal then the delays will only increase and poor neighbours could feel intimidated.

How are first time renters or people with bad credit history going to be able to get a home. This will add to our risk of choosing them.

Fixed term tenancies can only be extended if both the tenant and Landlord agree, we can’t end a tenancy if the tenant wants to stay. Basically it then becomes a periodic tenancy. How would  we now give someone a chance by telling them they can have a 1 year fixed tenancy and we will extend it if both parties are happy.

Making rental properties safer and more liveable by letting tenants add minor fittings such as brackets to secure furniture against earthquake risk, to baby proof the property, install visual fire alarms and doorbells, and hang pictures.

I agree this this fine as long as any damage especially to expensive kitchen cabinets is paid for and repaired by the tenants. I have many upmarket properties where the owners have gone overseas for 2-5 years, they don’t want kiddie locks left on their doors when they come home

Improve compliance with the law by increasing financial penalties and introducing new tools to take direct action against parties who are not meeting their obligations

Again targeting landlords when the biggest issue is rent owing by tenants with Tenancy Tribunal orders. We give these to debt collection agencies who then go through the District court to apply for an attachment order through WINZ or their employers. The problems are you have to know who their employer is or if you think they are on a benefit. If they come off a benefit or the payments stop, the debt collection agency has to apply for another attachment order at $80. Why cant this information by available to the courts when tenants situations change and they have civil court orders against them.