The latest release from REINZ 06/08/2020
REINZ warns unintended consequences are likely to arise now RTA Bill has passed
Following the passing of the Residential Tenancies Amendment (RTA) Bill 2020 in the House last night, the Real Estate Institute of New Zealand (REINZ) is warning that some of the changes are likely to have unintended consequences and actually cause more harm than good.
Bindi Norwell, Chief Executive at REINZ says: “Whilst the Act will achieve some positive things for tenants, the reality is that there are likely now to be a number of unintended consequences that arise as a result of the Bill passing.
“For example, in a recent survey around half of landlords and investors (46.3%) said it is likely or highly likely they will sell their rental property if removal of the right to issue a 90 day notice went ahead. Given we already have a shortage of quality rental stock across the country, this is problematic as it will further reduce the pool of rental properties available and likely push up rents even further.
“With median rents in Auckland having risen 9.8% in the last 3 years (from $510 to $550) and in Wellington by 20.2% (from $420 to $505), it will be interesting to see how much higher rents go as more landlords withdraw from the market,” continues Norwell.
“Additionally, tenants without an ‘excellent’ rental history may now find it even harder to successfully secure a rental property than they already do, given how hard it will now be to remove tenants who end up significantly in arrears,” she warns.
“This is especially true, considering landlords will need to apply to the Tribunal to terminate the tenancy therefore, extending the average timeframe to resolve claims and extending backlogs further.
“Both REINZ and the New Zealand Property Investors’ Federation who represent a significant portion of landlords across the country have warned this would be a likely outcome as landlords and property managers seek to take a more risk averse approach to selecting tenants,” points out Norwell.
However, REINZ has welcomed a number of positive provisions included in the Act.
“While there are a number of positive things in the new legislation, such as banning landlords from seeking rental bids, limiting rent increases to once a year and making rental properties safer and more liveable by enabling tenants to make minor changes to the property, such as installing child-proofing, hanging pictures, or earthquake-proofing,” says Norwell.
“We’re also broadly supportive of the changes introduced at the last minute including allowing victims of family violence to end a tenancy with two days’ notice, to allow landlords and property managers to terminate tenancies with 14 days’ notice if a tenant physically assaults them and the extension of the time the Tenancy Tribunal can hear cases via phone/video conference,” concludes Norwell.
The Government has said the bulk of the reforms will come into effect in six months, to give tenants and landlords time to prepare for the new rules. REINZ will take an active position in supporting its members across the country with implementing the changes in due course.
As always Dan is available for any queries or concerns you may have and is available on 07 571 11025 or dan@taurangarentals.co.nz