Govt ditches regulation of property managers
The Government has announced that it is shelving the plans to regulate property managers introduced by the previous government.
There have been calls to regulate badly behaved property managers for years, and in 2022 the Labour government proposed a licensing scheme for property managers.
Later that year, it announced a new regulatory system for the industry, and the legislation has been making its way through Parliament.
The social services and community select committee was still hearing submissions on the Residential Property Managers Bill earlier this year.
But Housing Minister Chris Bishop announced on Tuesday that he had written to the chairperson of the select committee to inform him that the Government did not intend to support the bill through further parliamentary stages.
He had requested that the committee ends consideration of the bill, he said.
“New Zealand is in the middle of a housing crisis, and adding more regulation to the rental property market is not the way to open up more housing supply.”
The previous government’s analysis of the bill showed that the cost-benefit analysis was very marginal, he said.
“The analysis also noted that even those marginal benefits were highly uncertain, with the most certain aspect being the costs.”
Officials should instead be working on policies that would make a real difference to improving housing supply, such as the Government’s changes to tenancy law, he said.
The Residential Property Managers Bill would have established an occupational licensing regime for property managers, and set minimum entry and qualification requirements.
It would also have ensured that managers met professional standards through the creation of a disciplinary process to sanction them for bad behaviour, including the possibility of losing their licences.
Propertyscouts director Ryan Weir, who is deputy chairman of the Residential Property Managers Association, said the Government’s decision to ditch the proposed regulation was a slap in the face to tenants and responsible property managers alike.
It was a green light for the cowboys to continue running amok in the property management industry, he said.
“Chris Bishop’s rationale for the decision because of a tenuous cost-benefit analysis is short-sighted at best,” Weir said. “Instead of abandoning the bill altogether, it could have been refined and improved to better serve the interests of all stakeholders.”
Broadening the scope to include the registration of private landlords, who collectively own around 320,000 rental properties, a significant portion of the market, would have benefited the costbenefit ratio, Weir said.
“It’s basic economics. Since we’re already investing in a system to regulate property managers, extending it to include private landlords would have been a logical and cost-effective step forward.”
Ditching the proposed regulation was a missed opportunity to create a more comprehensive and equitable regulatory framework for the rental housing sector, he said.
Back in February, the select committee heard from property and community advocates on the proposed bill.
Rupert O’Brien, from Community Law Centres Aotearoa, told MPs that vulnerable tenants needed protecting from misbehaving professional property managers.
“Properly regulated, skilled and professional property managers can prevent Residential Tenancy Act breaches happening in the first place.”
Previous attempts at lawmaking to lift standards had failed to stamp out illegal behaviour, he said.
“Our clients often report unprofessional conduct, poor housing – 8% of renters reported living in damp and cold housing in 2022 despite the Healthy Homes legislation,” he said.
“Property managers can poison the relationship between the landlord and tenant by being obstructive and unresponsive, or unreliable.”
Former Renters United spokesperson Geordie Rogers told MPs in February there were landlords and property managers who repeatedly disregarded the law, and it was important that the bill got enforcement processes and penalties right.
The bill would have covered professional property managers only, but some people urged MPs to also regulate all landlords, including so-called Mum and Dad investors.