The Residential Tenancies Amendment Bill: What it changes, and who stands to benefit

A property commentator on Monday claimed this present Government is the most "anti-landlord" in New Zealand's history - which might be news to tenants struggling with rising rents and substandard housing.

Later this week the Government plans to push through its Residential Tenancies Amendment Bill under urgency, before Parliament rises for the election campaign.

It will change the law to make it "fit for modern renting situations", according to Associate Minister of Housing Kris Faafoi.

After its first reading in February the Bill went to select committee where a number of changes were suggested, mostly around when and how a landlord can evict a tenant.

Here's what the Bill will change, if it passes with all the changes suggested by the select committee.

Things landlords will probably like, but tenants won't 

Tenants will now have to give 28 days' notice to end a tenancy, up from 21.

If the rent is late at least five working days three times within 90 days, an application can be made to evict them. Currently they have to be at least 21 days behind - this will remain a justification under the new law.

Things tenants like, but landlords don't

Landlords will not be able to evict a tenant without a reason, instead requiring "specific grounds" specified in law. 

Landlords won't be allowed to list rental properties without a price attached, tell people they can secure a tenancy by paying more, or hold an auction. Tenants will still be allowed to make an offer above the listed price of their own volition.

Identifying details don't have to be made public after a win at the Tenancy Tribunal. While this applies to both parties, tenants in particular have requested this to avoid being blacklisted by landlords. 

The rent will only be allowed to go up once a year (currently every 180 days). 

Landlords will have to prove tenants have been anti-social at least three times in a 90-day period if they want to use that as a reason to evict them, issue written warnings each time, and would have to apply to the Tenancy Tribunal within 28 days of the third incident. The current law doesn't require more than a single incident of anti-social behaviour.

Landlords will have fewer reasons to stop tenants getting ultra-fast broadband installed.

Landlords will have to allow tenants transfer their "interests and responsibilities" to a new tenant, unless the landlord has a "reasonable" reason to decline it.

The amount of notice landlords have to give to evict tenants if they need it for themselves, an employee or family member will rise from 42 days to 63. The new tenant will also have to move in within 90 days to prove it was a "genuine" need, and not just an excuse to get rid of the tenant quickly. They will also have to live there for at least three months.

If a tenant is evicted so the landlord can undertake alterations or demolition, "material steps towards beginning" the changes would need to happen within 90 days, again to prove it was genuine.

The Government is changing the law to make it "fit for modern renting situations", according to Associate Minister of Housing Kris Faafoi. Photo credit: Getty

Landlords with six or more tenancies will be hit with higher infringement fees and penalties, even if some of the tenancies are technically under their partner's name or that of a company. Penalties overall will also go up, with the Government saying they haven't been reviewed since 2006 and are about 60 percent too low, considering the increase in rents since then. 

Landlords will need to keep more documents regarding alterations and maintenance work. 

Landlords won't be able to withhold consent to minor changes to the premises, such as repairs and work that doesn't require a consent, damage the property or have an "unreasonable negative effect on any person’s enjoyment or use of any property outside the premises". Examples given by Faafoi include "brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells and hang pictures".

Landlords will have to provide details of how the property meets the Government's healthy homes standards within 21 days, if a tenant requests it. 

Things both tenants and landlords are likely fine with 

Fixed-term tenancies automatically become periodic on expiry, unless both agree otherwise.

Either party whose fines total up to $100,000 can be dealt with by the Tenancy Tribunal, rather than having to go to the District Court when they surpassed $50,000.

Reactions to date

The Ministry of Housing and Urban Development said in February the changes would not hit landlords with "material direct costs", but they're "likely to face additional administrative costs in relation to new processes around minor fittings and assignment of fixed-term tenancies".

"Some landlords may generally consider that the package of tenancy initiatives will increase the risk to their business and this could affect landlord willingness to rent, and the amount of rent charged. However, noting that there are a wide number of factors that affect rent, it would be difficult to attribute any change in market rent to the reforms alone and any impacts on rents may be muted by other factors that reduce costs for landlords, such as lower interest rates."

Property investment and real estate groups have reacted furiously, with one group calling it "unworkable and vicious" and another said property owners were "about to be robbed". 

Kris Faafoi.
Kris Faafoi. Photo credit: Getty

The ACT Party, which prefers free-market solutions to problems where possible, said it would reduce the number of rentals available for those who can't afford to buy.

"New red tape will increase the cost and risk of being a landlord and those costs will be passed on to tenants in the form of higher rents."

The ministry said at the very least, any rent increases imposed would be at less frequent intervals under the new law. 

Statistics NZ data shows about 18 percent of tenancies end at the landlord's request. 

The average (mean) weekly rent in New Zealand has been on a constant upward trend over the last 10 years, rising about 5 percent a year under National. Since 2017, when the Labour-led Government took over, it's risen at about the same rate (from $426 a week in September 2017 to $485 in June 2020).