Investors fear openended tenancies
A PROPERTY investors’ representative fears the Government could introduce a radical new tenantsforlife regime.
Andrew King, executive officer of the NZ Property Investors’ Federation, said yesterday proposals being floated by the Ministry of Housing and Urban Development alluded to openended tenancies, which would restrict landlords’ rights.
The change would mean renters could not be removed when places were sold and they would have the right of renewal in their favour.
‘‘Tenants for life is a possibility,’’ Mr King said.
‘‘There are some tenant groups who believe a landlord should never be able to end a tenancy unless the tenant is not meeting their obligations such as paying the rent.’’
With 270,000 landlords owning 546,000 residential rental properties worth $171 billion and home to 1.5 million tenants, a lot is at stake.
A ministry discussion document on reforming the Residential Tenancies Act floats the idea of openended tenancies, saying there is a need to give renters greater choice and control over their situation.
The reform ‘‘proposes to remove the ability landlords have to end a tenancy at any time without having to give a reason. Landlords will instead only be able to end a tenancy for specific reasons and may be required to show evidence to support their decision to terminate,’’ the document says.
‘‘The discussion paper is careful not to say anything on tenants for life. Yet, it’s a possibility that some tenant groups are pushing — that tenants should have all the rights of a homeowner,’’ Mr King said.
The document says that only if a tenant was not complying with their responsibilities would a landlord be able to apply to evict them, citing those who are 21 days behind in their rent as an example.
If introduced, the model would not be unique to New Zealand. German tenants already enjoy indefinite agreements that allow for eviction only under certain conditions.
This increased security means leases in Germany are 11 years on average, compared with 2.5 years in England and about a year in New Zealand.
Robert Whitaker of grassroots tenants association Renters United said he was in favour of such an approach because of the security it offered the renter.
He queried why landlords should be able to evict tenants without giving good reason. — The New Zealand Herald