Market commentary Sweeping tenancy law changes to take effect soon

AUCKLAND: Major tenancy law reform, passed by the previous coalition government, comes into effect in four weeks, affecting about 600,000 properties which are home to about 1.5 million New Zealanders.

From February 11, the law swings further more firmly in favour of tenants to give more security and rights to them in what the politicians hope will be more of a Europeanstyle rental climate.

As house prices climb and tenancies rise, the law passed in 1986 was seen to be outdated and had never been significantly reformed.

The Residential Tenancies Amendment Act became law last August, but most of the toughest changes do not become effective until next month.

Although landlords must now give 90 days’ notice compared with tenants’ 21 days, tenants could get a far more benign environment shortly.

First, the stakes become much higher: the maximum value the Tenancy Tribunal is able to award against a bad landlord or bad tenant rises from $50,000 to $100,000.

One of the most controversial and biggest changes is an end to nocause terminations.

Landlords will not be able to axe tenancies without a lawful reason from next month, meaning they cannot just give the 90 days’ notice.

Landlords will be able to give other reasons, but they will need to be real, such as demolishing or changing the premises’ use.

Three notices for antisocial behaviour is one reason under the changed law.

Landlords will have to issue a tenant three written notices for separate antisocial acts within 90 days, then apply to the tribunal to terminate the tenancy.

Other reasons to seek eviction are. —

If the tenant has been at least five working days late with rent on three separate occasions within 90 days.

Where the landlord will suffer greater hardship than the tenant if the tenancy continues.

Where the landlord or a member of their family or their employee requires the premises as their principal place of residence.

From last August, it became illegal to raise rents every three or six months. Instead, it is now limited to annually.

From next month, landlords or managers will be banned from advertising places for rent without specifying the exact price.

That will effectively outlaw rent bargaining or rental auctions.

‘‘Rental properties cannot be advertised without a rental price listed, and landlords cannot invite or encourage tenants to bid on the rental pay more than the advertised rent amount,’’ according to Tenancy Services.

Nor will landlords be able to ban tenants from perhaps painting an interior wall.

‘‘Tenants can ask to make changes to the property and landlords must not decline if the change is minor. Landlords must respond to a tenant’s request to make a change within 21 days.’’

On fibre broadband, tenants can from next month request to install fibre and landlords must agree if that can be installed at no cost to them, unless specific exemptions apply.

On privacy and access to justice, suppression orders can remove names and identifying details from published Tenancy Tribunal decisions.

It could be harder for landlords or managers looking at old decisions to find a tenant’s name, even if there has been a ruling against them.

On landlord records, not providing a written tenancy agreement will be illegal and landlords will need to keep and provide new types of information from February 11.

The state’s arm is also strengthened to handle difficult cases.

The Ministry of Business, Innovation and Employment will have new measures to take action against parties who are not meeting their obligations.

If all that is not enough to digest, more changes occur on August 11 this year.

Tenants suffering from family violence will be able to end a tenancy without financial penalty.

Also by August, a landlord will be able to issue a 14day notice to evict if the tenant has assaulted the landlord, the owner, a member of their family, or the landlord’s agent and the police have laid a charge.

Landlords strongly fought against the changes, saying they would drive up rents because investors will decide the risks outweigh the benefits and pull their properties off the rental market. — The New Zealand Herald

WELLINGTON: Passive funds were again the dominant theme of the New Zealand sharemarket yesterday and Contact Energy was the main beneficiary, owing to its top 10 position in the S&P Global Clean Energy Index.

At one point Contact traded through $10, continuing its strong run along with Meridian Energy, another Clean Energy ETF constituent.

Contact ended the day at $9.90, up 22c, or 2.27%, while Meridian slipped back 6c to $8.53 following the previous day's 15% surge in the stock.

The two companies have been on the end of a buying spree from the Nasdaqlisted exchange traded passive fund since October.

‘‘The sort of money coming into these stocks has been extraordinary,’’ Blair Knight, cohead of sales trading at Craigs Investment Partners, said.

‘‘Locals have been selling into this strength . . . a lot of them were overweight but they have probably sold their bullets too early and don't want to sell anymore. Plus, you have a lot of people away on holiday so not all the sellers are around and all of sudden these shares get pushed higher.’’

Contact's gains were not enough though to pull the New Zealand sharemarket into positive territory.

The S&P/NZX50 index slipped 33.72 points to 13,333.93 on turnover of 73 million shares worth $200.5 million.

While Contact and Meridian remain in focus, Genesis Energy also had a good day. Its stock closed up 15c, or 4%, at $3.85 and Mercury NZ gained 25c, or 3.7% to $7.

Church technology service PushPay had 16 million shares traded but closed down 3c at $1.82.

Mr Knight said the volume was driven by offshore investors, following the recent selldown by cofounder Chris Heaslip.

The a2 Milk Company drifted lower, closing down 4.27% at $11.65, having rallied at the end of last year. The company last month said its sales would be affected by Covid19 disruption of the important daigou trading channel in Australia.

Among other notable decliners, Cavalier Corp fell 2.53% to 38c, PGG Wrightson was down 2.1% at $3.26 and retailer Briscoe Group fell 1.35% to $5.13.

On the upside, Summerset rose 1.6% to $12.70,

The New Zealand Refining Company gained 3c or 5.56% to 57c and Rakon was up 4.92% to 64c.

Outside the main index, Marlborough Wine Estates Group climbed 10.87% to 51c.

Kiwi cervical cancer screening company TruScreen climbed 12.6% to 10c on the NZX, after debuting on the ASX, having previously raised $2 million in a compliance IPO before its dual listing.

IkeGPS gained another 3c to $1.20 following Tuesday's announcement of a deal to buy certain assets of Visual Globe's AI platform.

Wall Street stock futures and several Asian equity indices fell as results flowed in from Georgia's runoff elections, which will determine control of the US Senate. —