Tauranga Property Investors' Association

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Two critically important reviews on the rental industry are underway

Two critically important reviews on the rental industry are underway simultaneously at present. The RTA Review and the review of standards for the Healthy Homes Guarantee Bill.

The RTA Review covers many issues, however the main matters are:

  • security of tenure for tenants
  • removing 90 day no cause notice
  • how a landlord can sell their rental property
  • allowing tenants to modify their rental
  • potentially making it compulsory to allow pets

The first three matters are interrelated, all aimed at shifting control of the rental property away from the owner and towards the tenant. If done well it shouldn’t be a problem to improve security of tenure for those tenants that want it, as a greater number of landlords probably want long term tenancies more than tenants do.

The problem is that tenant groups want long term security as well as the flexibility to exit the property quickly if they want to. This isn’t balanced and one sided policies never work. Knowing this, one of the suggestions is to remove fixed term tenancies and convert periodic tenancies to open-ended tenancies.

An open-ended tenancy would mean the landlord can only end it if they require the property for another purpose or if the tenant isn’t meeting their obligations. Tenants could still give three weeks’ notice.

Combined with this are proposals to disallow a tenancy to end so the property can be put on the market and increasing the notice period once a property is sold from 42 days to three months. Many home buyers would not want to wait three months to move into their new home and would be put off buying a rental. Potentially this could mean that you can only sell a rental when a tenant decides to leave or to another investor. This would severely reduce the number of potential buyers, thereby reducing the property’s value.

The NZPIF believes that removing the 90 day notice with no reason is a poorly thought out policy. A membership survey two years ago showed that this tool was not used frequently. However when you need to end a tenancy but cannot get the documented evidence required for the Tenancy Tribunal, this is an essential tool.

Likewise there needs to be robust thought into allowing pets in rental properties. While the NZPIF encourages members to allow pets, allowing tenants to have them of right will make property management very difficult. Neighbours with tenants pets causing problems, with no way for a landlord to act, will not thank the Government if this aspect of the standard goes forward.

On top of this there are standards in the Healthy Homes Guarantee Bill that concern the NZPIF. While we are generally supportive of standards, they need to be done in a cost-effective manner as tenants ultimately pay the price.

The current Minimum Standards for insulation are a good practical mix of providing insulation benefits in a cost effective way.

We are also concerned that many rentals will be forced to install heat pumps when tenants do not want them. An NZPIF study shows that around 18% of rentals in Auckland already have heat pumps and 55% in Dunedin. This tends to show that landlords are willing to supply heat pumps when there is a need and tenant demand.

The NZPIF will be making a detailed submission on both these reviews and have been invited to attend MBIE workshops to discuss the proposals on behalf of all rental property owners.

Thank you to all members who support us to advocate on your behalf. To others, please consider joining your local Association or at least become an NZPIF Associate Member for just $25 a year. You can join at www.nzpif.org.nz.


Tags: federation reports

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