11 Aug 2020

How drastic are the new changes to tenancy law?

From The Detail, 5:00 am on 11 August 2020
14588891 - rental agreement form with signing hand and keys and pen

Photo: 123RF

Last week the government passed under urgency a series of big changes to New Zealand's tenancy laws.

The reforms of the 1986 Residential Tenancies Act have been in the works since before the 2017 election, but were pushed through the House with just hours of the parliamentary term left. 

Why has it taken so long for these changes to be implemented? When will they come in force? And how will they change things for tenants and landlords? 

On today's episode of The Detail, Emile Donovan speaks to Stuff's chief political reporter Henry Cooke, and landlord Mark Todd, about the reformed renting regulations and what they'll mean for your tenancy, or tenants. 

The reforms' glacial passage through the House of Representatives can be partially explained by musical chairs within cabinet. 

Phil Twyford was named housing minister when the coalition government came to power, but the portfolio was split between several ministers following a reshuffle in mid-2019.

The associate housing Minister Kris Faafoi was tasked with overseeing the reforms' passage through parliament. 

Henry Cooke says the changes have been broadly characterised as strengthening renters' rights in legislation which was first passed in the mid-1980s and hasn't been dramatically updated since. 

"It really did feel like the bill had been written in a time when rentals were a thing for students and young professionals. Not people with kids, not people staying for a long time.

"There are around 600,000 households renting now. Which is a lot of people."

Back in the early 1990s, more than 70 percent of households contained people who owned their own homes; now that number has dropped to just over 60 percent. 

The price of housing has increased considerably in the past 20 years, and the cost of renting has also risen. 

Under the new reforms, landlords will only be able to increase rents once every 12 months.

The Act also bans the practice of rental bidding, where landlords or property managers invite prospective tenants to pay more to secure a competitive spot. 

One of the most dramatic changes is abolishing the practice of no-cause terminations, where landlords can kick out tenants with 90 days' notice without having to provide justification.

Instead, they will have to show a pattern of anti-social behaviour over a three-month period, with evidence presented at the Tenancy Tribunal.

Proceedings at the Tenancy Tribunal will also be anonymised for tenants who have been wholly or partially successful with a historical claim at the Tribunal.

However landlords say the bill is short-sighted and will inadvertently drive up rents, as property managers may decide the risks outweigh the benefits and pull their properties off the rental market. 

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