Tenancy law reforms slated by landlords and industry groups

Tauranga Rentals owner Dan Lusby says the latest reforms are bad for landlords and the wider housing market. Photo / File

The Government's latest proposed changes to rental laws have landlords and industry groups worried their interests come second to renters particularly bad tenants.

Sandra Conchie has talked to rental property managers and owners, and advocacy groups on both sides of the debate about the likely impacts of these reforms.

A raft of proposed changes to rental laws aimed at giving greater protection and security for tenants is likely to drive more property owners out of the rental market.

That's the reaction from Tauranga Rentals owner Dan Lusby and other industry groups to proposed new tenancy reforms aimed at making things fairer and more secure for renters.

This includes limiting rent increases to once a year and banning landlords from soliciting rental bidding among potential tenants.

Under the proposed changes landlords would also have to prove to the Tenancy Tribunal the reasons for evicting a tenant by giving three examples to justify their actions.

Landlords are currently entitled to evict tenants provided they give 90 days' notice without giving a reason.

Other changes to the Residential Tenancies Act include tenants being able to add minor fittings and improvements to the tenancy such as baby proofing or hanging pictures.

Associate Housing Minister Kris Faafoi said the proposed new reforms would benefit both renters and landlords, including banning letting fees and the Healthy Homes Guarantee.

Faafoi said he was confident these changes delivered the right balance in making it fairer and more secure for renters while also protecting landlords' interests.

"We understand that landlords require clear guidelines, which help protect their investment and assist them in their dealings with difficult tenants, the law ensure this.

"If a tenant acts irresponsibly there can be repercussions," he said.

Lusby said these sweeping changes on top of the insulation rules was likely to drive more property owners away from the rental market.

"Landlords are regularly telling me that more and more red tape and added compliance rules are making it too difficult for them," he said.

Lusby said there was only a small percentage of bad tenants and bad landlords in the community and these reforms were like "cracking a nut with a sledgehammer".

"Most landlords don't increase rents willy-nilly and we do market research before doing so. We would much rather increase rents by $20 at six-month intervals than $50 a year."

A search of the Trade Me properties showed advertised rentals in Tauranga were down to 180 from 250 last month, and the shortage would worsen under these changes, he said.

"The average rental property in the country is valued at about $700,000 and landlords should be entitled to protect their investments."

Tauranga landlord Tony Cranston says new rental law rules will benefit bad tenants and disadvantage landlords. Photo / Sandra Conchie

Tony Cranston, who owns at least a dozen rental properties in Tauranga, believes the proposed changes on top of others changes are another disincentive for landlords.

Cranston said he had been involved in the rental property market for about 40 years.

"In 40-odd years, I have never evicted a tenant giving them 90 days' notice because it costs over $2000 in lost rent, bringing the place back to a rental standard, and paying another letting fee... sometimes it can take a few weeks to find the right next tenant."

Cranston said these changes were likely to benefit bad tenants and the good ones would be disadvantaged if the rental property market shrank even further.

"It will also disadvantage neighbourhoods if there is a delay in evicting bad tenants."

Cranston said he knew of landlords seriously considering exiting the rental market.

Andrew King from the NZ Property Investors' Federation said these changes would not only punish landlords but anyone living next to a tenant with anti-social behaviours.

A bill setting out the proposed changes to the Residential Tenancies Act is expected to be introduced to Parliament in the first half of next year.

Tenants Protection Association manager Penny Arthur said she hoped the bill would highlight the obligations and responsibilities for both sides.

Arthur said good landlords had nothing to worry about from these changes which were about greater protections for tenants from often "hidden" problems with bad landlords.