Residential Tenancies Amendment Bill

01 March 2020

On 17 February 2020, The Residential Tenancies Amendment Bill was introduced to Parliament. The suggested reforms to this Bill aim to make renting in New Zealand fairer and more secure for both landlords and tenants. These changes come after Associate Minister of Housing (Public Housing), Kris Faafoi’s announcement on 17 November 2019, addressing the fact that one-third of all New Zealanders now rent. Kris Faafoi said, “With more and more people renting, the law should provide enough security to responsible renters to put down roots in their community.”

 

The set of amendments aims to:

  • Improve tenant’s security of tenure
  • Flatten the inflated demand
  • Improve compliance with the law
  • Remove a disincentive for parties to use the Tenancy Tribunal
  • Make rental properties safer and more liveable
  • Prohibit the solicitation of rental bids

What does this mean for property owners?

Although the Bill intends to make renting fairer for all parties, the suggested reforms are largely directed at landlords rather than at tenants. Some of the changes include limiting rent increases to once every 12 months, increasing financial penalties for those who are not meeting their obligations and requiring fixed-term tenancy agreements to become periodic tenancy agreements upon expiry (unless both parties agree otherwise, or certain conditions apply). The Amendment Bill will also require a justified reason to end a periodic tenancy and landlords to permit and facilitate the installation of Ultra-Fast Broadband. 

 

These changes mean that now it’s even more important to take your time finding and choosing the right tenants for your property. The additional security that the Bill aims to provide is a great opportunity to create strong, lasting relationships with reliable tenants and sets the precedent for your tenants to think of your property as their home, and treat it as such. Now is also the perfect time to ensure that your property meets Healthy Home requirements and check in on any maintenance requests, particularly as the Bill increases fines for non compliance with Health Homes regulations by $3,200. More information on fines is contained here.

 

What happens next? The Bill will have its first reading in Parliament. Following this, the Bill will be referred to Select Committee. The draft bill is available to read online and can be viewed on the New Zealand Legislation website

If you have any questions or concerns about the Residential Tenancies Amendment Bill, get in touch with your local Quinovic team today.

 

Industry reacts to the Bill

The proposed changes highlighted in the Residential Tenancies Amendment Bill have proven to be highly controversial, causing concern amongst investors. As a result, the NZ Property Investors Federation (NZPIF) has announced plans to work together with the industry to challenge certain aspects of the Bill. Specifically, the suggested end to the no-cause 90-day notice and the proposal for fixed term tenancies to automatically convert to periodic tenancies. NZPIF spoke of feedback they received from property investors and rising concerns over owners losing control of who lives in their properties. Landlords.co.nz also reported that ‘both organisations are happy to support the proposals to limit rental increases to once a year, to ban rental bidding and the proposals around making rental properties safer and more liveable.’

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