Weighing up tenants’ rights
A Nelson landlord says tightening rental laws will adversely affect both renters and landlords. But tenants disagree.
‘‘The pendulum has swung so much in favour of the landlord, and we need that to change.’’ Sophie*, Nelson tenant
Harry Pearson reckons he’s a decent landlord. He manages his six Nelson rental properties himself, and does most of the maintenance.
He’s slowly fitting out the homes with new carpets and heat pumps. He’s digging gardens and planting fruit trees.
It’s hard work, and certainly not the cash cow people think, he says. Each of his rentals nets him a loss of $10,000 a year in improvements, interest and maintenance.
The only reason he’s hanging on to his properties is for the taxfree capital gains that will see him through retirement.
‘‘I’m frustrated with people saying landlords are raking in so much money,’’ he says. ‘‘If it’s so easy, why doesn’t everyone do it?’’
The Government is asking for submissions on changes to the Residential Tenancies Act, a reform intended to improve conditions for renters. Changes include increasing the notice period a landlord is required to give, limiting rent increases to once a year, and improving mediation procedures.
However, Pearson believes the changes will adversely affect both landlords and tenants.
‘‘The more regulations you have, the less choice you are going to have on the low end of the market,’’ he says.
‘‘Costs [of improving properties] will be have to be recouped by increasing rents, or the property will be sold if it is no longer affordable to run it as a rental.’’
Pearson acknowledges that there are many rental homes that aren’t up to scratch. In that case, tenants should vote with their feet, he says.
‘‘If you walk into a house that’s mouldy and not maintained, then go somewhere else.’’
Previous stories in the media have highlighted a shortage of rental properties in Nelson. But in Pearson’s experience, tenants with a good credit rating and references will find homes. ‘‘I’d be very surprised if [these tenants] will struggle to find somewhere to rent.’’
The reform also seeks to end no-cause terminations. However, landlords don’t evict tenants lightly, Pearson says.
‘‘If a tenant is looking after the property and paying good money, it’s not logical to evict a good tenant and leave your house empty for weeks until you find someone else.’’
Sarah* says it’s not that simple. Her last two tenancies have ended for no reason at all.
‘‘Every time I have called and asked, ‘What could we do better?’, and they said they don’t have to give a reason.’’
The single mother of two daughters has moved every year for the last four years. Each move has been ‘‘incredibly stressful’’, with the rental market becoming more competitive – 20 or 30 people will turn up to a viewing, she says.
Forced to compromise, her family have lived in homes without working hot water or heating. However, each place was home, and to maintain stability for her children, she tried to stay put.
Moving from place to place has put pressure on the family. One of Sarah’s children has special needs, which made a five-week stint between rentals extra difficult.
‘‘I made it out like we were holidaying,’’ she recalls. But with a week in emergency housing, and the rest split between seven different houses, the illusion was hard to maintain.
The leverage a landlord or property manager has over a tenant’s living situation is tantamount to blackmail, Sarah says. ‘‘They don’t ever have to prove anything.’’
Tenants are often referred to the Tenancy Tribunal. ‘‘But when you apply for a new rental, you have to tick the box that says, ‘I have been to the Tenancy Tribunal’. So you won’t get that rental.’’
Home ownership rates in New Zealand have dropped over the last few years. Last year, Statistics New Zealand released figures showing 63 per cent of Kiwis live in their own home, the lowest rate since 1951.
Former Labour candidate for Nelson Rachel Boyack says that with people renting for longer nowadays, changes to the Residential Tenancies Act are long overdue.
‘‘I hear stories from renters who are forced to move every year. It impacts on their ability to go to work. They have to change schools, doctors, churches and sports groups. That makes it difficult for families to put down roots in the community.’’
Some landlords evict tenants rather than communicating any problems, she says. ‘‘The landlord might be concerned about an issue like noise or cleanliness, and rather than dealing with the tenants, they move them on.’’
Boyack acknowledges that the reforms need to get the balance right for landlords, too.
‘‘If a tenant is causing damage or not paying rent, [landlords] need to be able to ask a tenant to move on. However, the vast majority pay the rent on time, [and] treat it as if it’s their home.’’
Sophie* has rented for 40 years. In the last three or four years, increased competition for rentals has meant conditions have worsened, she says.
‘‘Being a tenant is really scary. You’re at the whims of landlords and property managers who decide the length of your tenancy.’’
Last year, she and her partner were given notice. ‘‘We’d maintained the property, and had never missed a payment. We asked why, and [the landlord] said she didn’t have to give a reason.’’
Later, they were upset to see their former home readvertised at a higher rent.
‘‘Why couldn’t they have negotiated with us?’’ Sophie asks. ‘‘I’d made friends with the neighbours, had Christmases and birthdays and dinners with the neighbours. It wasn’t a rental property, it was my home.’’
Now she’s settled in a new home. But at the back of her mind is the fear that her new tenancy could also end at any time.
‘‘We’re always nervous. There are things – like repairs – we don’t ask for because we are so nervous.
‘‘I know there are tenants out there that destroy property, but the majority don’t. The pendulum has swung so much in favour of the landlord, and we need that to change.’’
* Names have been changed