Property Management

Removal of no-cause notice opposed by 45% of tenants

It’s not just landlords who are opposed to the removal of the no-cause 90-day notice: a new REINZ survey reveals that close to half of tenants are too.

Monday, March 02nd 2020

More than 80% of New Zealanders disagree with ending the no-cause 90-day notice as outlined in the proposed changes to the Residential Tenancies Amendment Bill, according to the REINZ survey.

The survey, which involved 2,800 landlords, property managers and tenants around the country – got respondents’ views on the various tenancy law reform proposals.

It found that 82.1% of respondents disagreed or strongly disagreed with ending the 90-day notice.

Even tenants disagreed with ending the 90-day notice with 45.4% against a change as compared to 40.9% supporting the proposed change. A further 13.7% either didn’t know or neither agreed/disagreed.

REINZ chief executive Bindi Norwell says that this shows that, overwhelmingly, New Zealanders don’t agree with the proposed change to the no-cause 90-day notice.

“We weren’t surprised by the fact that landlords/investors and property managers were opposed to the change as we knew this was the case from wider discussions we’ve been having with the industry.”

However, what did surprise them was that many tenants don’t want the law changed either with most respondents disagreeing with the proposed change, she says.

“Verbatim comments from survey respondents suggest that tenants are concerned around issues caused by problem neighbours and are also worried that the changes could result in their rent rising.”

The survey also sought people’s views around fixed term tenancies automatically converting to periodic tenancies and, again, a big majority of respondents (63.1%) disagreed with the proposal.

Breaking the results down, nearly three quarters (71.4%) of landlords/investors don’t agree with the proposed changes, 21.2% agreed and 7.4% were unsure.

From a tenant perspective, more than half (61.5%) agreed with the proposal, yet more than a quarter (27.2%) disagreed with the change; the remaining 11.4% were undecided.

Norwell says they weren’t surprised with this result either.

“Landlords want the freedom to choose who lives in their rental property and tenants are after greater security of tenure. But there must be a better way to find the right balance than the current proposals.”

See the survey results here: https://www.landlords.co.nz/files/RTA%20Survey%20Results.jpg

In the survey, investors and landlords were also asked whether they would consider selling their rental property if the end to the 90-day notice went ahead.

Nearly half (46.3%) of investors/landlords said it is likely or highly likely they would sell their rental property if the proposals go ahead, 32.6% were unsure and the remaining 21.0% said it was not likely or that they definitely would not sell their rental property.

A NZ Property Investors' Federation survey of its members returned a similar result. Based on their results, they estimated 50,000 landlords would leave the industry if the reforms become law.

Norwell says that not being able to exit tenants in a timely manner or who are acting in a seriously anti-social manner towards neighbours is a big concern for landlords.

“The majority of investors only own one or two rental properties and for many it’s part of their retirement savings plan. To not be able to control who lives there is a huge concern to them which is why so many have said they would consider selling if the legislation goes ahead.”

REINZ is concerned that if investors find the proposals too cumbersome, they will sell up, reducing the pool of rental properties and raising rental prices even more, she adds.

“Even the Ministry of Housing and Urban Development’s (HUD) own regulatory impact statement has said that the proposed changes ‘may increase landlords’ business risks and impact on their profit margins.”

In fact, stakeholder submitter data in the HUD regulatory impact statement also backs up the REINZ survey’s result on tenant opposition to ending the no-cause 90-day notice.

In the statement, it says that [of the stakeholders who submitted during their consultation on the proposed reforms] 68% of tenants and 71% of landlords identified the potential for the removal of no cause terminations to have negative impacts.

Read more:

RTA reforms pile pressure on landlords 

Tenancy reform submissions due March 25 

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