Select Committee green lights tenancy law reforms

Friday 10 July 2020

Extreme disappointment is the response of property professionals to the Select Committee report on the Government’s proposed tenancy law reforms which was released this week.

By Miriam Bell

That’s because the Social Services and Community Select Committee has elected to progress the proposal to remove a landlord’s right to use “no cause” 90-day terminations to end a periodic tenancy agreement.

It has also given the green light to the proposal which requires that fixed-term tenancy agreements become periodic tenancy agreements upon expiry unless both parties agree otherwise.

These particular reforms have been fiercely opposed by property professionals across the board since the Government announced the reforms contained in its Residential Tenancies Amendment Bill.

Property professionals say the reforms skew the balance between investment property owners and tenants’ rights in favour of tenants and erode the rights of the property owner.

They say they mean property owners effectively can’t control who lives in their property and that will cause investors to leave the market, pushing up rental prices further.

For that reason, the NZ Property Investors’ Federation, REINZ, and a majority of others working in the industry have been campaigning to raise awareness of the likely negative impact of the changes.

But, by and large, the Select Committee has not taken their concerns on board – although the report does include a minority view from the National MPs on the committee who oppose the reforms.

REINZ chief executive Bindi Norwell says they are disappointed that the Select Committee has disregarded feedback from a range of organisations and industry professionals on the proposed reforms.

“Over 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.”

Concerns around removing the 90-day notice were not just limited to property professionals, with a recent REINZ survey showing that 45.4% of tenants disagreed with its removal, she says.

“There are already provisions in place to protect tenants who believe a ‘no-cause’ termination is retaliatory. So, we don’t believe the current situation needs to change: 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 Tenancy Tribunal cases.”

Norwell also says that if fixed term tenancies automatically convert to periodic tenancies, it will significantly affect areas with strong student populations.

“There are significant concerns that students could let their tenancy rollover to a periodic contract throughout the Christmas period, then in the New Year after university is back, the tenant could give notice to leave and the landlord will have missed the student market for a whole year.

“A tenant’s desire for security of tenure needs to be carefully balanced against a landlord’s need to manage business assets.”

For NZPIF president Andrew King, the Select Committee’s report is hugely disappointing. He says removing the 90-day notice is a big mistake which won’t achieve what it is intended to.

“It will cause major issues for landlords who have problem tenants – especially as the Select Committee has now recommended that it should be up to the landlord to prove that anti-social behaviour occurred if a tenant challenges a notice at the Tribunal.”

But it is not only landlords who will be affected, it is anybody who lives next door to an anti-social tenant as neighbours will no longer have any protection from such tenants, he says.

The Select Committee reported back earlier than expected: it was scheduled to be next Monday July 13. That means there is no longer any chance the controversial proposals will be dropped from the Bill.

However, the Bill has yet to go through its second reading in Parliament so worried landlords and property professionals can still contact MPs to express their concerns before that stage of the process.

For those wanting to do so, King suggests they write to their local MP, Housing Minister Megan Woods, Associate Housing Minister Kris Faafoi, and any, or all, of NZ First’s MPs who are thought to be less committed to the reforms than their Coalition partners.

No date for the Bill’s second reading has been announced yet, King adds. “But it will probably happen pretty soon because the Government want to get these reforms done and dusted before the election.”

Read the Social Services and Community Select Committee's report on the Residential Tenancies Amendment Bill here.

Read more:

REINZ & NZPIF join up to battle RTA changes 

RTA reforms pile pressure on landlords 

Comment: A call to arms 

Comments from our readers

On 10 July 2020 at 9:43 pm BruceH said:
From personal experience unless the quality of Tenancy Tribunal adjudicators improves considerably and closes the current gaps that exist: - a lack of applying the evidence as determined by the law - Many disputed orders due to an imbalance of justice in the rulings to the point of clear bias. - A clear lack of expertise in legal interpretation & savvy - I'll even go to the point of lacking clear logoc & common sense. The hearing eventually was in Jan 19. 90-day notice ruled invalid - retaliatory Yet no claim of such for 124 days. Only accepted due to other 2 parts below - The landlord didn't sign - yet tenants application refers to me as Landlord. He'd dealt directly with me a number of times. I'm the Trustee. - no evidence 90 days period met - yet tenant never claimed that. The adjudicator raised that one. Shocking ah! He never even asked the tenant when he got it. Just started tryng to work it out from courier pick up date. Used incorrect std post delivery period (I work at NZP) & it was courier post not std. My neighbour tenant actually handed it to him. Yet even tho Adjudicators workings were actually 90 days, his decision was due to no evidence of when courier picked it up (albeit 2 other items of evidence ignored) he ruled no proof it was delivered within 90 days so ruled that requirement wasn't met. Oh come on. Do you believe that? The application of appeal raised Jan/Feb 19 The appeallents yet to be heard. Even so judge has ordered Appeal De Novo. Heard afresh. I don't want the claims Ive written off the be reheard. The tenant withdraw many claims after his laywer saw my evidence. But he's on his 4th lawyer now paid by your tax. Oh BTW. It'll cost me $900 for De Novo. The reason my claims are writen off is they're useless to persue. He can't pay. So just add another $900 debt on the innocent party. Great. So unless that kind of [insert explitive here!] gets sorted out, then I strongly believe many innocent landlords will become a vitim of the crown like has happened to me. 15 Breaches and he still lives there 2 years later. - Removed my woodburner & installed a 2nd hand one. No consent grom me or council. - Chopped an beautiful established tree down and uaed the wood for fuel in the apparent faulty woodburner. - talked disgustingly to my Property Manager to the point she's scared of him & impeded her doing her job. Oh yeah. The courts have left her at risk. That last one I did not want to disclose because it put her at risk even more. So this law change WILL put other property managers at risk ike this too. I disclosed valid reasons, lost thousands in damanges, got ordered to pay for fake claims when I submitted ecidence disproving them, court associated costs. 7 days annual leave, travel, accommodation etc. A devalued house. And my time. Oh my God. So many hours to deal with it. I had to sell a house but this one is a sub-divided section so wpild have to sell both really. That tenancy long term good tenant. The courts have screwed me over for telling the truth in disclosing my reasons for the 90 day notice. Good luck to landlords in this one.

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