Shake-up for city rental scene

The tenants group says new rental laws could help empower renters in Wellington’s overheated market – the landlords group is worried it could hand power to the likes of the Mongrel Mob.

The Government will double the threshold for damages claims at the Tenancy Tribunal, let renters do more to change properties and introduce anonymised tribunal rulings as part of a longawaited overhaul of tenancy laws.

These measures will also include an end to no-cause evictions, a ban on rental bidding and limit rent rises to once-yearly, instead of every six months.

Wellington Property Investors’ Association president Richard

Bacon said too much regulation would discourage people from becoming landlords and that would further restrict the market.

He said he was aware of a recent case in which armed police had evicted problem tenants.

‘‘Without the 90-day no-cause [law] that property would continue to be tenanted by, in this case, Mongrel Mob, and continue to be used for illicit drug dealing.’’

Bacon said the once-yearly control on rent rises would not work as intended, either. ‘‘Then, once every 12 months you get a doublesized rent increase. It’s a business. We’re not a charity ... if the costs go up, the price goes up.’’

Instead of encouraging landlords to become more professional, the Government was beating them with ‘‘a big stick’’.

Robert Whitaker, of Renters United, said large numbers of New Zealanders were now renters, and very few of those were Mongrel Mob, or behaved anti-socially.

‘‘The vast majority of tenants are nice, law-abiding people who pay their rent on time and look after the house, and all they want is the ability to stay in the house . . . so they can live a settled life.’’

Whitaker said there should be legal controls on the level of rent increases – something not included

in the announcement. ‘‘At the moment, in Wellington, we have a massive shortage of rental housing so there are always people desperate to pay almost anything for a rental house.’’

There was no market pressure on landlords to manage rents. ‘‘They can put rents up really as much as they like, almost.’’

The most obvious way to control rental rates would be to peg them to inflation, Whitaker said.

Overall, the changes in the announcement would make a difference to renters, particularly in security of tenure for tenants, he said. That included the strengthening of rights for people on fixedterm rental contracts, a common feature in the Wellington scene.

The new laws – expected to be passed by Parliament in the new year – will automatically now assume that a ‘‘periodic tenancy’’ will begin at the end of a fixedterm lease.

So, if a lease ends after 12 months, it is assumed that the tenant will stay on a ‘‘periodic’’ (open-ended) tenancy from there on, without needing to sign another fixed-term agreement. Landlords can ask tenants to go onto a new fixed-term agreement, but the tenant has to agree.

Renters in dispute with landlords and successful in defending claims or having their rights upheld, can now have their identities removed from tenancy tribunal decisions before the determination is given.

‘‘Some landlords have used those documents to check on whether or not a tenant may be troublesome or not,’’ Associate Minister for Housing Kris Faafoi said yesterday.

There are more than 600,000 rental households nationally with about a million people living in them, up from 453,000 in 2013 and 388,000 in 2006.