Housing Minister Kris Faafoi talking about changes to tenancy laws. Video / Audrey Young
The coalition Government's moves to improve the lives of 1.5 million residential tenants living in about 600,000 properties is progressing, with a report out this week on the planned law change.
On Tuesday, the social services and community select committee issued its final report.
Landlords lobbied hard against it.
Today,NZ Property Investors Federation executive officer Sharon Cullwick said the bill was in much the same form as originally proposed last year and it could be law before September's election. Bindi Norwell, Real Estate Institute chief executive, also expressed disappointment.
The change will swing the law firmly into the tenants' camp.
Kris Faafoi, Associate Minister Housing for Public Housing, has announced one of the biggest changes to the Residential Tenancies Act since it was passed in 1986.
The bill was introduced in February when it had its first reading.
The Herald reported last year the current situation under the law as it stands now and what could change.
The Government says it will increase security of tenure, promote good-faith relationships, modernise and clarify the act to reflect today's rental market, give more powers to the state chief in charge and support tenants' ability to assert their legal rights.
But the federation is worried about the end of no cause terminations. Landlords will no longer be able to ask people to leave in the ways they have been and must have better reasons than before.
Cullwick said today: "We're quite disappointed such significant changes are still planned to the sector, even thought there were strong submissions against it."
A new report is out on the Government's rental law changes. Photo / File
The report out on Tuesday said the bill would:
• Increase the security of tenure for tenants who are meeting their obligations by removing a landlord's right to use no cause terminations to end a periodic tenancy agreement.
• Require that fixed-term tenancy agreements must become periodic tenancy agreements upon expiry unless both parties agree otherwise, or certain conditions apply.
• Clarify the rules about minor changes tenants can make to premises.
• Prohibit landlords soliciting or asking for rental bids.
• Suppress people's names where they win a Tenancy Tribunal case.
• Clarify the tribunal's power to suppress identities if that is in the interests of the parties and the public interest.
• Require landlords to permit and facilitate installing ultra-fast broadband, subject to specific triggers and exemptions.
• Increase financial penalties against landlords.
• Give the regulator new tools to take direct action against parties who are not meeting their obligations.
Norwell of REINZ said today: "In the last eight months, we have made clear our concerns around the fact that should the proposals go ahead. Rental property owners will have limited abilities to remove tenants who are causing problems in their rental properties or causing trouble with neighbours.
"There are already provisions in place to protect tenants who believe a no cause termination is retaliatory. Landlords who misuse this provision can currently be ordered to pay damages of up to $4000. So, we don't believe the current situation needs to change," Norwell said.
"Our preferred approach was for higher exemplary damages for landlords who abuse no-cause terminations. This would be much more affordable for the Government to implement, would require less education of landlords and property managers and wouldn't add to the already significant backlog of tribunal cases," she said.
National opposes the changes, saying it would alter the balance of rights between landlords and tenants and reduce the rights of landlords in ways that would also be of ultimate detriment to their tenants, the report noted.
National said the bill would not improve relations between landlords and tenants nor assist the increasing need for rental options, National said.
"While the bill seeks to make a large number of changes, the most problematic is not allowing a landlord to end a tenancy with 90 days' notice, except for a very limited number of reasons. This ability of a landlord to end a tenancy would now be severely limited and consequently would not reflect private property rights," the report said of National's position.
The law change means the tenant - or person on the premises with their permission - must have exhibited antisocial behaviour three separate times before the landlord can demand they go.
The landlord must have given written notice each time but the federation says that will mean neighbours could be driven out and landlords will be frustrated with what they say is the slow Tenancy Tribunal process.
Landlords will therefore sell their rental properties, the landlords say.
Faafoi said the act was passed more than 30 years ago when renting places was often a temporary measure but King predicts up to 50,000 landlords will sell if the changes come in. That is based on a survey conducted last month by the federation, he said.
"That could mean up to 100,000 rentals will be sold," the federation has said.
Faafoi said about 25 per cent of New Zealanders rented in 1986 but that was now about 33 per cent. People were also renting later in life and more children were living in rental properties: in 1986, children in rentals were 26 per cent, but in 2013, it was 43 per cent.
