Rental mar­ket re­form pose chal­lenges for ten­ants

Matamata Chronicle - - Property - SU­SAN ED­MUNDS

Ten­ants could suf­fer un­der Labour’s pro­pos­als to re­form the rental mar­ket, rental prop­erty own­ers and man­agers say.

Labour is promis­ing that if it were to form the next gov­ern­ment, it would strengthen the rights of renters by lim­it­ing rent rises to once a year and in­creas­ing land­lords’ no­tice pe­ri­ods to 90 days.

It is also plan­ning to abol­ish ‘‘no-cause’’ ten­ancy ter­mi­na­tions and re­quire a for­mula for in­creases to be set in ten­ancy agree­ments so that ten­ants know what to ex­pect. Let­ting fees would be banned. Labour leader Jacinda Ardern - who an­nounced the plan at a pri­vate home in Hen­der­son, Auck­land, said the moves would make rent­ing a more sta­ble and healthy ex­pe­ri­ence for fam­i­lies.

But An­drew King, ex­ec­u­tive of­fi­cer of the New Zealand Prop­erty In­vestors’ Fed­er­a­tion, said the plan could back­fire.

He said in a sit­u­a­tion where ten­ants lived as neigh­bours, good ten­ants were of­ten loath to com­plain about poor be­hav­iour from their neigh­bours for fear of reper­cus­sions.

If land­lords were not able to give evic­tion no­tices with­out cause, and in­stead had to say it was be­cause the ten­ants were in­tim­i­dat­ing their neigh­bours or ex­hibit­ing other an­ti­so­cial be­hav­iour, it would put the good ten­ants in dan­ger, King said.

‘‘You can imag­ine the good ten­ants will say, ‘don’t give them no­tice, we’ll leave’, so you lose the good ten­ants, that puts them un­der pres­sure with all the ex­penses of mov­ing and you end up with the poorly per­form­ing ten­ants you can’t get rid of.’’

David Faulkner, di­rec­tor and con­sul­tant at prop­erty man­age­ment con­sul­tancy Real-iQ, said the re­moval of let­ting fees could also have un­in­tended con­se­quences.

Some big­ger prop­erty man­age- ment firms might be able to ab­sorb the cost, he said, but oth­ers would have to pass it on to land­lords if they wanted to stay in busi­ness, which could lead to rent rises.

‘‘It’s a well-mean­ing pol­icy but when an MP says [the let­ting fee] is be­ing charged ‘be­cause they can’, they’ve ei­ther not done their re­search or they are grand­stand­ing.

‘‘If they haven’t done their re­search, that’s con­cern­ing,’’ Faulkner said.

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