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:

A third of homes have mould problems

The ODT reports that More than a third of region’s homes have mould issues.

In the consumer advocacy organisation’s national rental survey, the results of which were released earlier this month, 37% of respondents in Otago said their rental properties suffered from mould that was difficult to remove or had reappeared.

Consumer NZ head of research Jessica Wilson said the bulk of those surveyed in Otago lived in Dunedin, and the proportion of renters reporting mouldy homes was significantly above the national average of 26%.

Cosy Homes Trust project manager Jordana Whyte said she was not surprised Otago rentals were more likely to be mouldy than those in other regions.

I’m not surprised, Dunedin can be a damp cold place at times, and there are many old houses in the city.

Thirty-eight percent said they were unsure what to do, compared with a national average of 23%.

Renters should approach Tenancy Services if they struck problems with their landlord, Ms Wilson said.

“In cases where required repairs haven’t been done, you can issue the landlord with a 14-day notice to fix.

Dampness and mould is not only a landlord problem, it makes a difference how you live, how you heat and ventilate your home, and how you cook and how you dry clothes and air your bathroom.

And this won’t be confined to rental properties. I have an old home and continually have to deal with mould in the bathroom and living area. And we have a ventilation system, an outside vented clothes dryer, a kitchen extractor and two dehumidifiers to keep things under control.

And there a re a lot of young people flatting in Dunedin. I remember my son drying clothes on a rack in his bedroom, and he had a dampness problem.

Ms Whyte said the best way to remove mould was to create a mixture of 70% white vinegar and 30% water in an old spray bottle, spray it on the affected area, wait for two minutes and then gently scrub to remove the mould.

“The water’s important. It tricks the mould into thinking it’s getting a drink.”

The vinegar killed the mould, unlike bleach which turned the mould white but often left it alive, she said.

Rather than just implying landlords are the problem it would be better to educate people how to manage moisture in their flats or homes. Given the number of students in Dunedin perhaps they could have compulsory couyrses on sensible living at the University and Polytechnic.

Turei Members’ Bill for renters

In yesterday’s Members’ Bill ballot a bill submitted by Green co-leader Metiria Turei was drawn, aimed at giving much stronger rights to house renters.

As usual Greens were quick off the mark with a press release promoting the bill and renters rights.

Green Party Bill puts renters’ rights on the agenda

A Green Party Member’s Bill pulled from the ballot today will put renters’ rights firmly on the political agenda, where it belongs.

Metiria Turei’s Residential Tenancies (Safe and Secure Rentals) Amendment Bill strengthens tenants’ rights, and will lead to stable, long-term tenancies that are good for both renters and landlords. The 2013 Census records 453,135 households as renters, an increase from 388,275 in the 2006 Census.

“My Bill will help people who rent get the stability they need to put down roots in their community,” Mrs Turei said.

“The home ownership rate is reducing and more families are renting – those families’ rights need be protected so they too can have a stable and secure home life.

“Families who rent often find themselves pushed around from house to house, and their kids moved from school to school, unable to settle down.

“The rental market is the other side of the housing crisis that affects hundreds of thousands of New Zealanders.

“In many other countries, particularly in Europe, long-term tenancies in quality, warm homes are the norm.

“Landlords benefit too when tenancies are stable and long term, because the property gets looked after and there are no time gaps when tenants aren’t paying rent.

“Home ownership is at the lowest level since 1951 and everyone deserves a home to call their own – whether they rent or buy,” said Mrs Turei.

The Bill makes six changes to the Residential Tenancies Act:

  • Allowing tenants a right of first refusal when their lease expires.
  • Requiring landlords to be transparent about how they calculate rent rises.
  • Removing obligations on tenants to pay leasing fees.
  • Creating a default lease term of three years, with the ability to choose a shorter term.
  • Preventing rent increases more often than once every 12 months for periodic and fixed-term tenancies.
  • Restoring the 90-day notice period when landlords wish to sell the property.

There’s comments on this plus rental property Warrants of Fintess – “Landlords can pay” – at  The Standard in Green Party Bill to improve the rights of renters

Why would landlords do this?

Landlords have been targeted in Labour’s housing policy.

NZH in Labour builds three-pronged plan

The policy also proposes three new measures to crack down on speculators driving up land prices:

Capital gains would be taxed on homes sold within five years, up from National’s current two-year “brightline test”, except for owner-occupied and inherited properties;

Speculators are already taxed on capital gains, and the IRD has been working harder to pick up any property speculation.

Landlords would not be able to avoid tax by charging less in rent than they pay on mortgages and using the resulting loss to offset their income from other sources;

Why would landlords deliberately earn less income to avoid paying less tax – wouldn’t the taxed ‘saved’ be less than the income? Or am I missing something?