Tenants eye better deal with new laws

The Government is proposing a suite of rental law changes, including a limit on rent increases, an end to no-cause terminations, and a ban on socalled ‘‘rent bidding’’.

Housing Minister Phil Twyford has launched a discussion paper for consultation, with a set of proposals aimed at increasing security for tenants.

The policies mostly mirror Labour’s election policies. The reforms are unlikely to become law before mid-2020.

They would limit rent increases to once per year, up from once every six months.

Landlords could also be required to include a formula for any rent increases in tenancy agreements, giving tenants transparency about how increases might be calculated.

An end to ‘no-cause’ evictions is also on the table.

Currently, landlords can kick tenants out with no reason with a 90-day notice, or with a set reason like late rent, or that they are selling the property with 42 days’ notice.

One of the proposals would end those no-cause terminations and raise the notice period of with-reason evictions to 90 days.

Twyford said landlords would still be able to evict ‘‘rogue tenants’’ damaging the property, not paying rent, or engaging in ‘‘anti-social behaviour’’.

The reforms would also make it much easier for tenants to own pets, with landlords possibly required to give a reason why a pet is not allowed.

This would still let landlords ban possibly disruptive or damaging pets, but would give tenants more even footing if they wanted to argue their case.

Two options are being considered to end so-called ‘‘rent bidding’’ – where prospective tenants offer to pay more rent in order to secure a property.

One would prohibit landlords from asking for rental bids, while the other would prohibit landlords from asking and even accepting unprompted bids from tenants.

Boarding houses would also see greater regulation, with a licensing scheme proposed.

Twyford said it was a ‘‘small minority’’ of landlords giving the whole sector a bad name, but rental law reform was still needed.

He said New Zealand rental laws, which date back to 1986, are some of the most archaic in the world.

Twyford said he didn’t expect rents to increase thanks to the reforms and had studied experiences in other countries to prove this.

Green Party co-leader Marama Davidson, who is a renter, said secure tenancies were good for both landlords and tenants.

‘‘The mean tenancy length is a year – a lot of renters are changing

homes every year. A lot of children are having to change schools,’’ Davidson said.

She said a school in her area of South Auckland had a roll that was up to 60 per cent transient.

These reforms come on top of a law currently in select committee that would ban letting fees.

National’s Judith Collins said the changes would just force rents up.

‘‘By limiting rent increases to once a year, landlords will be forced to raise rents higher and sooner, meaning tenants will actually be paying the same or more in the long run,’’ Collins said.

‘‘If a landlord now wants to sell their property, they will have to wait 90 days, meaning settlements of sales will be extended by double.

‘‘It is important to strike a good balance between landlords and tenants, but so far Mr Twyford’s decisions seem to result in both parties losing out.’’

Renters United organiser Robert Whitaker said the changes of greatest significance were those improving security of tenure.

‘‘Fixed-term contracts have become increasingly popular in Auckland, Wellington and Christchurch, which has caused a lot of stress and insecurity.

‘‘They should become rarer and become available only for legitimate reasons, like a fixedterm employment contract.’’

Property Investors Federation executive officer Andrew King said he disagreed with most of the reforms, but ‘‘could live’’ with things like setting rent increases at one per year.

He was worried about a possible end to no-cause terminations. ‘‘That would just make managing a property extraordinarily difficult.’’

Often anti-social behaviour couldn’t be proved, because neighbours were unwilling to put their concerns in writing, he said.