Many landlords in Tauranga are fretting over the changes in the new tenancy reform. Photo / George Novak
Many landlords in Tauranga are fretting over the changes in the new tenancy reform. Photo / George Novak
Far-reaching tenancy law reform comes into effect today but not everyone is happy about it.
The new law empowers renters, giving them more security and rights than what they previously had but some landlords are fretting over the changes.
The Residential Tenancies Amendment Act became law last August but themost drastic changes come into effect today.
One of the biggest changes is the end to no-cause terminations, meaning landlords can't axe tenancies without a lawful reason by giving 90 days' notice.
Landlords also can't unreasonably deny a tenant's request to make minor changes to the property unless it is going to leave permanent damage or cause structural harm.
Tauranga Rentals owner Dan Lusby says some landlords around the city have decided to sell up lately because the rules are too restrictive.
"We can't give notice to a tenant unless we have a very good reason. In the past we had a 90-day notice we could give with no reason, it wasn't used often but it was used," he said.
Some landlords in Tauranga have decided to sell off their rental properties, says Dan Lusby. Photo / George Novak
"Now it seems they'll have longer to stay in the place unless the owner sells it or decides to move in themselves."
Some property owners believe the changes give renters too much power, Lusby says.
But it's not all bad news, Tauranga Property Investors Association president Juli Tolley says newer and younger investors are appearing in the stead of older landlords selling up.
"I've seen a large influx of younger investors since 2019 coming to our monthly meetings wanting to learn more about property investment," she said.
"So, in general, it is a mixed bag from the frustration of older investors feeling beat up and targeted to new investors seeing opportunity."
Baywide Community Law solicitor and housing advocate Shard Loibl says the changes are positive for renters.
"I feel the changes are definitely a move forward and totally support the changes", he said.
"I feel landlords will make the application process a lot more strict because it will be harder to evict a tenant as the 90-day notice with no-reason ends."
However, he did have an issue with the change to make emergency and transitional housing exempt from the Act in August.
Tauranga Property Investors Association president Juli Tolley. Photo / File
McDowell Rotorua Property Management business development manager Rhiannon Greenwood says the end to no-cause terminations will make landlords "wary and cautious".
The changes mean renters will potentially be in a property for a lengthy amount of time and landlords will be on guard about who they decide to offer it to.
"This means all renters will find themselves among quite a lot of competition and having great references, renting history etc is so important," Greenwood said.
McDowell Rotorua Property Management business development manager Rhiannon Greenwood says landlords will be cautious of renters. Photo / Supplied
Asked whether the reform changes could increase rental prices, Tolley says anything that creates more cost for a business would likely increase prices.
"The Government is pushing landlords to act according to a set of laws and treat property investment more professionally, and that does come at a cost, like everything else where compliance has been implemented," she said.
The biggest factor behind rent prices, however, was the supply of properties in the area.
Supply levels in Tauranga have decreased recently as more people migrate from other cities, with these reform changes and the impact of Covid-19 also exacerbating the situation, Tolley said.
The median weekly rent in Tauranga increased by 11 per cent to $550 in the year to August.
Meanwhile, for the Bay of Plenty region, median weekly rent over the same period increased 9.5 per cent to $525 - a new record.
Loibl said hopeful renters should check the property's insulation report, the insurance policy with the excess, and make sure the house is up to date with the healthy homes standards.
And Tolley had a simple message for hopeful renters trying to secure a home, which she told her adult children: "Provide complete information. Show up to viewings, on time. Present themselves tidy and organised. Be nice."
New rules for renters and landlords:
No cause terminations
Gone are the days when landlords could end a periodic tenancy without cause by giving tenants 90 days' notice. Tenants can still be evicted on a periodic tenancy if the owner or a family member requires the property. If the property is to be sold, renovated, or demolished, landlords must provide 90 days' notice.
Landlords need to issue a tenant three written notices for separate antisocial acts within 90 days then apply to the Tenancy Tribunal to terminate tenancies. Notices can be given for other reasons such as demolishing or changing the premises' use.
Property alterations
Landlords must allow tenants to make changes to the property - such as hanging up shelves or painting a wall - so long as it's not going to leave permanent damage. Tenants will be responsible for any costs associated with installation and reversal of any damage.
Rental bidding
Rent auctions between hopeful tenants and landlords are banned. Rental properties cannot be advertised without a rental price either, however, it is still legal for potential tenants to offer more than the listed price which can be accepted.
Broadband installations
Landlords can't stop tenants from having fibre broadband installed, provided it will be at no cost to them.
Changes to fixed-term tenancies
All fixed-term tenancy agreements will automatically convert to periodic tenancies at the end of the term unless the parties agree otherwise, the tenant gives 28 days notice, or the landlord gives notice in accordance with periodic tenancy termination grounds.
Tenancy Tribunal changes
Names and identifying details of parties in Tenancy Tribunal decisions can now be suppressed. Any party who wishes for suppression must apply to the Tribunal, with the decision relying on them.
Elsewhere, the amount the Tribunal can make awards against a bad landlord or bad tenant has also risen from $50,000 to $100,000.
