Rental law aims for closer bond

The lives of more than half a million people who rent are about to be changed by a long-awaited and much-debated overhaul of rental housing law.

Department of Building and Housing officials are working on draft amendments to the Residential Tenancies Act 1986 which covers 480,000 rented properties and affects an estimated 600,000 tenants.

Plummeting rates of home ownership and a surge in the number of people renting, locked out by ever-escalating house prices, has prompted the Government to move on changes to the 20-year-old act.

Building Issues Minister Clayton Cosgrove said he wanted to strengthen the hand of tenants and landlords in a rapidly growing sector. He refused to specify what changes he had planned.

Suzanne Townsend, Department of Building and Housing policy adviser, said a report was being drafted on the changes after submissions were received last year. Proposals would go to Mr Cosgrove, then to the Cabinet before May, she said. They fell into three broad areas: stability of tenure, enforcing Tenancy Tribunal orders, and establishing housing quality obligations.

Proposals to set minimum housing standards were unlikely to be in the amendments, she said.

But Scotney Williams, a lawyer specialising in tenancy law, fears the changes could drive landlords out of the sector because proposals discussed in the act's review included banning landlords from selling their houses.

Lengthening the amount of notice landlords must give tenants from the mandatory 90 days to six months to a year were other proposals being discussed, he said.

Under the act now, landlords must give 90 days' notice to terminate a tenancy but tenants only give 21 days.

Landlords must give 42 days' notice if they are selling or need the place for family or employees. But discussions about reform have focused on extending tenants' rights further and encouraging more to enter long-term fixed tenancies.

The Government wants to encourage a sector where people have the option of renting the same house all their life.

New Zealand landlords own 1.2 properties on average and and are criticised for running the business as a hobby, evicting tenants without good reason, behaving unprofessionally and creating an unstable supply of rental accommodation. These points were made in DTZ NZ's Housing tenure aspirations and attainment report last year to the Government's Centre for Housing Research.

Mr Williams said he feared the Government would swing the balance more in tenants' favour and landlords would find it even harder to evict bad tenants.

Suzanne Townsend confirmed that stability of tenure was a key concern but said the thrust of the review would shy away from compulsion towards flexibility. Amendments would encourage landlords and tenants to establish long-term relationships and would not deny landlords the right to sell houses or flats, she said.

Mr Williams questioned how the Government could address this issue when the biggest problem dogging the rental housing sector was that about 32,000 of the 40,000 cases before the Tenancy Tribunal were from landlords demanding rent arrears.

If the Government was serious about security of tenure, it would pay state accommodation supplements directly into landlords' bank accounts, bypassing beneficiaries, he said. 


Key law changes

* Residential Tenancies Act amendments will target three areas of concern:
* Stability of tenure: encouraging long-term rental relationships like in Europe.
* Enforcement of Tenancy Tribunal orders: make it easier for landlords and tenants to settle disputes.
* Clarifying housing quality obligations: "reasonable state of repair" will be defined but proposals to set minimum housing standards are rejected.