Proposed changes to tenancy laws aim at long-term security

Housing Minister Phil Twyford says that the Government wants to “strike a balance between providing tenants with security of tenure and allowing them to make their house a home, while protecting the rights and interests of landlords”, but headlines his announcement as “Government to make life better for renters”:

The public is being asked for feedback on new Government proposals aimed at making life better for renters, Housing and Urban Development Minister Phil Twyford has announced.

“Our tenancy laws are antiquated and don’t reflect the fact that renting is now a long-term reality for many of our families. A third of all New Zealanders now rent,” Phil Twyford said.

I think that renting has been a long-term reality for a lot of families for a long time, but many people only rent for relatively short terms – see (2015) The average length of stay in a rental property is two years says Barfoot & Thompson

“Insecure tenure can forcer families to continually move house. This is particularly tough on children whose education suffers when they have to keep changing schools.”

Phil Twyford urges landlords, tenants and other interested people to have their say on the proposals covered in a discussion document on reforming the Residential Tenancies Act released today.

“We want to strike a balance between providing tenants with security of tenure and allowing them to make their house a home, while protecting the rights and interests of landlords.”

That could be a challenge. It will be difficult to legally require landlords to provide secure long-term tenancies, as that would bind them to long-term ownership of rental properties.

The discussion document covers proposals on:

  • ending no cause tenancy terminations while ensuring landlords can still get rid of rogue tenants
  • increasing the amount of notice a landlord must generally give tenants to terminate a tenancy from 42 days to 90 days
  • whether changes to fixed-term agreements are justified to improve security of tenure
  • limiting rent increases to once a year
  • whether there should be limitations on the practice of ‘rent bidding’
  • whether the general obligations that tenants and landlords have remain fit for purpose
  • better equipping tenants and landlords to reach agreement about pets and minor alternations to the home
  • whether further controls for boarding houses are needed to provide adequate protection for boarding house tenants
  • introducing new tools and processes into the compliance and enforcement system.

“As people rent for longer, they want to be secure in their homes and put down roots in their community. That’s why making life better for renters is an important aspect of the Government’s housing plan,” Phil Twyford said.

Should people who rent expect to be able to securely “put down roots in their community” long-term?

The discussion document and a link to an online submission survey are available at: www.mbie.govt.nz/rta-reform.

42 Comments

  1. Deterring too many landlords from getting into or staying in the business is a risk that needs careful consideration.

    • Blazer

       /  August 27, 2018

      only if they burn down the houses.

      • artcroft

         /  August 27, 2018

        Its not that simple. You release one house to the housing market but another rental isn’t built to replace it cos its seen as too stressful. So with a rising population there is less housing to go around.

          • artcroft

             /  August 27, 2018

            Sure as long as you can afford to buy those appartments in viaduct. Got your 20% deposit on the 800k ready?

            • Blazer

               /  August 27, 2018

              you say that landlords leaving the market means there will be a shortage ,because there will not be a new dwelling built when they sell.

              Complete nonsense.

            • Alan Wilkinson

               /  August 27, 2018

              B has no clue. Here’s one for him. Landlords pull out of housing and invest elsewhere => fewer houses get built.

            • Blazer

               /  August 27, 2018

              you still don’t get it Al…landlords do not build…houses..they buy existing stock..when they sell the house is still there.

              Developers build to sell.

            • Alan Wilkinson

               /  August 27, 2018

              You still don’t get it, B. When landlords sell the buyer doesn’t have to build a new house so one less house.

    • Kitty Catkin

       /  August 27, 2018

      A man I know says never again; he and his husband had a tenant who refused to pay her rent, accused him of sexual harassment (some hope in his case), told him that it was HER house and that he couldn’t make her leave….and so on. Once they got her out, they sold the house and chalked it up to experience. I forget how much it cost them, but it was a lot, as she left the place dirty and needing professional cleaning and owed them $? in rent.

      I can’t see why the bond can’t be kept to offset unpaid rent.

    • Corky

       /  August 27, 2018

      Judith Collins
      @JudithCollinsMP

      Hey @jacktame on @Breakfaston1 how about property rights?

      Judy..stop being facetious.. and hypocritical. What did National do to protect property rights?

    • Gezza

       /  August 27, 2018

      The importance of punctuation, Shane.

      “My hardworking carpenter has one rental hes selling his tenants will have to find another place.”

      Is that: My hardworking carpenter has one rental. He’s selling his tenants. Will have to find another place.

      or: My hardworking carpenter has one rental. He’s selling. His tenants will have to find another place?

  2. https://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

    This might be of interest. A good friend of mine married a German many years ago. Both were in extremely well-paid jobs, but rented their house for many years, which it seems is very much the norm in Germany. It was only on the insistence of my traditional English friend that they eventually bought a place after the children left home. Apparently renters there have considerable latitude to make their rentals their home, effectively virtually renting only the bricks and mortar.

    • Pink David

       /  August 27, 2018

      True, but no one seems to look at the downsides.

      The German system works based on one simple factor, the population has been static for decades, and is in slow decline in many areas. Rents are very expensive in the main, popular cities and it’s very hard to actually get a tenancy.

      The other fun thing is that unfurnished in Germany means really unfurnished. Bring your own kitchen, oven, light fittings, door knobs, and the tenant is responsible for a lot more maintenance than they would be in NZ. It’s a lot more like a commercial lease in that regard.

      I also seriously question NZ’ers acceptance of things like this;

      “On this point, meet Moritz, a guy I and two others flat-shared with on the condition that we didn’t put our name on the letterbox. Why? Because the tenant of this early 1900s high-ceilinged apartment was officially his mother. She’d moved out, however, leaving him in there with the old rent agreement and a monthly payment that was actually below what we paid for utilities. “We’ve been here for so long that, even if the landlord did work out that I’m subletting, at court we’d be given eight years’ grace before we could be evicted,” he assured me on the first night.”

      Can you imagine anyone letting a house when the tenant can sub-let it and it take 8 years for an eviction?

      The other driver to Germans to prefer renting is houses their are getting cheaper, there is no capital gain to be made at all. No population growth changes a lot.

      • Blazer

         /  August 27, 2018

        ‘ the population has been static for decades, and is in slow decline in many areas. ‘…absorbed 80 million east germans and coped o.k.

        • Pink David

           /  August 27, 2018

          Population of Germany 1913: 68 million
          Population of Germany 2013: 80 million

          Average increase in population 120,000 per year (perhaps not a straight line due to one or two interludes of course…)
          New houses built per year: 270,000

          Amazing that house prices don’t rise there. Almost like a magical formula they have that no one else has access too.

  3. Blazer

     /  August 27, 2018

    rapacious landlords here greatly benefit from interest offsets and OPM in the form of billions in accomodation supplements.

    A contrived ‘market’.

    • Pink David

       /  August 27, 2018

      “A contrived ‘market’.”

      Yes it is. So lets get rid of accommodation supplements and interest offsets and everyone will be much better off. Are you with me on this one?

      • Blazer

         /  August 27, 2018

        absolutely…

        • Pink David

           /  August 27, 2018

          OK, so rents rise and people who used to get the supplement are forced into even poorer quality accommodation, or out of accommodation at all.

          Was that the outcome you wanted?

  4. David

     /  August 27, 2018

    There is nothing that bad in the proposals by Twyford, I would love my tenants to sign longer leases but few of them want to as they want the flexibility even though they stay for years and years.
    I dont mind them doing small alterations within reason and dont mind having small jobs done for them that arnt strictly necessary.
    The key as a landlord is getting a very good property manager, they keep you focused as a landlord and they are pretty good at finding tenants and keeping them on track.
    I have a property where the neighbour was dealing meth and it took 45 days to get a tenancy tribunal hearing and they hadnt paid the rent in 4 months. I had a tenant recently went bankrupt and owed me $5500 so the changes need to work both ways, tougher times for shit landlords and for shit tenants.

    • Blazer

       /  August 27, 2018

      you’re right there are shit tenants as well as shit landlords.

      The market is not a true one of supply and demand though.

      • David

         /  August 27, 2018

        Outside of Auckland and recently in Wellington (that was becoming obvious 2 years ago) the market is pretty well balanced.
        Auckland council just need to pull finger and support new building and i hope Twyford loses patience with them and steps over the top and forces it, Key and English should have like they did in Christchurch.

  5. Chuck Bird

     /  August 27, 2018

    “better equipping tenants and landlords to reach agreement about pets and minor alternations to the home”

    What is this meant to mean? Landlords now can agree to tenants

    • Corky

       /  August 27, 2018

      What it means is Labour doesn’t understand the concept of property rights. Being collectivist,
      means Labour is on par with tribal communites living in the jungle regarding land and property rights.

      It also shows Phil Twyford has no concept of business, or the consequences of these proposed legislative changes.

      Please 2020, roll on. Save us from these heathens.

      • Pink David

         /  August 27, 2018

        “It also shows Phil Twyford has no concept of business”

        He does understand politics. 35% of the population rent, that is enough for him to get votes to secure power.

        “or the consequences of these proposed legislative changes.”

        Which has stopped which politician ever?

        • Corky

           /  August 27, 2018

          ”35% of the population rent, that is enough for him to get votes to secure power.”

          Well, 35 % of the population can only rent if they have something to rent. My bet is landlords will get out of the business. Maybe house-bank their properties. Change to other forms of business ( backpackers and BB).

          Should that happen, more people will be homeless, and Phil will have a whole lot more state homes to build.

          These changes are morally wrong. And democratically corrupt in my opinion.

          • Corky

             /  August 27, 2018

            Or maybe renting could become part of the black economy? That would take some doing, but may be possible.

          • Pink David

             /  August 27, 2018

            “Well, 35 % of the population can only rent if they have something to rent. My bet is landlords will get out of the business. Maybe house-bank their properties. Change to other forms of business ( backpackers and BB).”

            Your missing the chance to double down and blame all the landlords for withholding property from those same renters.

            • Corky

               /  August 27, 2018

              A democratic right. Although not according to you or Labour.

  6. David

     /  August 27, 2018

    Before Blazer has a crack NONE of my tenants get the accommodation supplement.

    Its hard work at times being a landlord but buy a quality property and present it well you are most of the way there, also helps to like people and want to provide them with a nice home. And if you want to make money you need to hold for a long time so the 5 years bright line test may be the best thing you can do to attract good people to the business.

    • Blazer

       /  August 27, 2018

      You seem to be a reasonable person David…a little misguided politically but reasonable..all the same.

    • Pink David

       /  August 27, 2018

      “Before Blazer has a crack NONE of my tenants get the accommodation supplement.”

      Isn’t the point of the accommodation supplement to get people into suitable quality homes? You discriminating against them seems rough.

      • Trevors_elbow

         /  August 27, 2018

        Discriminating? Oh save us all….. what exactly is discriminating in the statement..of none of my tenants have the accommodation supplement?

        Assuming a lot aren’t you? Or just playing those lovely subtle abuse games that lefties love so much…..

        • Blazer

           /  August 27, 2018

          calling David a leftie…priceless!

        • Pink David

           /  August 27, 2018

          It was not subtle abuse. It was a subtle joke, clearly went over some people’s heads.

          The accommodation supplement exists to help people. I don’t see it as a point of any pride having no tenants are in receipt of it.

        • Pink David

           /  August 27, 2018

          “what exactly is discriminating in the statement..of none of my tenants have the accommodation supplement?”

          Just to add, here is the discriminating statement;

          “buy a quality property and present it well”

          David’s strategy is based on discriminating in favour of quality properties.
          I would infer the reasons for this is to get higher rents to some degree, and also attract tenants who earn higher than average incomes and have a lower management overhead. That would of course mean that it is unlikely they would be in receipt of the accommodation supplement.

          The use of capitals to state ‘NONE’ also indicates a misplaced righteousness in this, which I think is very misplaced.

          For full disclosure, one of my tenants gets the accommodation supplement. Generally I follow the same strategy as David, but one of my properties suits someone at that price range.

      • David

         /  August 27, 2018

        Its not a choice my pink friend or discrimination I dont pick the tenants, they all earn too much to get the supplement.

        • Pink David

           /  August 27, 2018

          You clearly discriminate by having properties that rent for prices out of reach of those getting the supplement.

          I’ve never seen a clearer case of discrimination.

  7. Pink David

     /  August 27, 2018

    “whether there should be limitations on the practice of ‘rent bidding’”

    This is an interesting one. I’ve just ‘rent bidded’ on a property. I’ve offered the landlord less than he wanted. Will this be illegal?

    • Gezza

       /  August 27, 2018

      * introducing new tools and processes into the compliance and enforcement system.

      has piqued my interest.

      • Pink David

         /  August 27, 2018

        All I see in that is that compliance costs will go up. No value to either the tenants or landlords will result.

        It will be similar to the insulation thing. Just spent $1500 to get a house to ‘comply’, added nothing to the actual insulation or improved the living quality of the property, just a cost to add a small amount of known value insulation to a tiny part of the ceiling on top of the existing insulation.