New tenancy law reforms positive for renters, landlords fretting over changes

A Rotorua property manager says landlords will be wary of new renters after the changes. Photo / Ben Fraser

Landlords in Rotorua have reportedly been urgently booting out tenants not up to "gold standard" before revolutionary tenancy law reforms come into effect today.

The new law empowers renters, giving them more security and rights than they previously had but some landlords are fretting over the changes.

The Residential Tenancies Amendment Act became law last August but the most drastic changes are brought into effect today.

One of the biggest changes is the end of no-cause terminations, meaning landlords can't axe tenancies without a lawful reason and can't just give 90 days' notice.

Rotorua Rentals director Pauline Evans said some landlords had been concerned about keeping unreliable tenants in their properties.

"I am aware of owners issuing 90-day notices to tenants in the last few weeks simply because the tenant hasn't been 100 per cent perfect," she said.

"Getting them out after [today] has become impossibly complicated and unfair for good landlords, and most of them are."

Rotorua Rentals director Pauline Evans. Photo / Andrew Warner

Another change in the reform means landlords can't unreasonably deny a tenant's request to make minor changes to the property unless it will leave permanent damage or cause structural harm.

This is also a cause for concern for a number of landlords and property managers who are eager to see how many tenants approach them for consent first, Evans says.

Baywide Community Law solicitor and housing advocate Shard Loibl said the reform changes were great 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.

It comes after the median weekly rent in Rotorua increased 5 per cent, from $430 per week in August 2019 to $450 a week in August 2020.

In October, expat Kiwis returning home were thought to be a driving factor in the shortage of available rentals as they moved into homes previously rented out while overseas.

Existing tenants at the time were being forced to move out amid an increasingly hot rental market which has seen the region's median weekly rents reach record levels.

McDowell Rotorua Property Management business development manager Rhiannon Greenwood said landlords would be on their toes more than ever when seeking new tenants.

"Renters really need to put their best foot forward now when applying for a property as it is such a serious matter to the landlord that this person will potentially be in their property for a lengthy amount of time and they will obviously be very wary and cautious of who is being placed," she said.

"This means all renters will find themselves among quite a lot of competition and having great references, renting history etc is so important."

McDowell Rotorua Property Management business development manager Rhiannon Greenwood says it's vital for renters to put their best foot forward. Photo / Supplied

Evans said many property owners she had spoken to were disillusioned by the reform changes and the general feeling was there was too much balance towards tenants. And despite the changes, there are no strengthened regulations for tenants to keep houses cleaned and ventilated.

"Insulation by itself will not heat a house, and shiny new heat pumps don't work unless they are turned on, something many tenants have said they won't do as they cost too much to run," she said.

"Many of my owners offered rental houses that were already dry and cleaned, only to be let down by tenants being too lazy to 'keep house'."

Tauranga Property Investors Association president Juli Tolley said hopeful tenants needed to provide complete information, show up to viewings on time, present themselves tidy and organised, and to be nice.

Meanwhile, Loibl said renters also should check the property's insulation report, the insurance policy with the excess, and make sure the house was up to date with the healthy homes standards.

New rules for renters and landlords:

No cause terminations

Gone are the days when landlords could end a periodic tenancy without cause by providing tenants with 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 will 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 shelves or painting a wall - as 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 now 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 it.

Elsewhere, the amount the Tribunal can make awards against a bad landlord or bad tenant has also risen from $50,000 to $100,000.