Government's latest rental law reforms slated by Rotorua industry players

Professionals McDowell Real Estate principal Steve Lovegrove says proposed new tenancy laws are likely to lead to more landlords leaving the rental 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 impacts of these reforms.

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

That's the reaction from Rotorua industry representatives to proposed new rules which include limiting rent increases to once a year and banning 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 for no reason, provided they give 90-days' notice.

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 tenancy law changes delivered the right balance in making fairer and more secure for renters while protecting landlords' interests too.

"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.

Rotorua Rentals director Pauline Evans said some of these changes not only penalised good landlords but it only going to make it worse for tenants struggling to find rentals.

"I cannot understand why the Government is so fixated on changing the 90-day notice rule when it has only been used occasionally by landlords as a last resort tool but it has not been an abused one," Evans said.

"I can see more property owners being unwilling to have long term tenants and they will advertise them as B & Bs because it's short-term and there are not the same hassles.

"There is a small margin of people who make it bad for others and I think it's ludicrous to penalise the majority of genuine, fair landlords," she said.

Professionals McDowell Real Estate principal Steve Lovegrove said there was no evidence these law changes would be beneficial to both landlords and tenants.

"In fact, what they would do is take away the benefits from landlords and give it to bad tenants who will know they have increased protection from being evicted.

"It's completely deceptive for the Government to suggest they are looking after the rights of both parties," he said.

Lovegrove said the Government had already "spooked landlords" over the capital gains tax and if these changes became law it was going to do the same.

"If it alienates property owners it's likely more rental properties will be taken out of the market, and that would disadvantage those in the lower end of the property ladder."

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 fear about from these changes which were about greater protection for tenants from often "hidden" problems with bad landlords.