Submissions being sought on proposed changes to standards for rental properties and the Residential Tenancies Act

Property

12th Sep 18, 11:46am by Greg Ninness

The submission process on proposed changes to the Residential Tenancies Act and Healthy Homes Guarantee Act has opened and will run until late October.

The Government is considering making changes to the minimum standards for residential rental properties in such areas as heating, ventilation, insulation, draught stopping and moisture ingress and drainage, while proposed changes to the Residential Tenancies Act could affect a number of areas in the tenant/landlord relationship, including the circumstances in which a tenancy could be terminated, tenants' rights and obligations regarding pets and minor alterations to premises.

The Ministry of Business Innovation and Employment, which oversees and enforces tenancy laws, has set up an information portal via which people with an interest in these matters can obtain more information and make submissions on the proposed changes.

A discussion document seeks feedback on five standards contained in the Heathy Homes Guarantee Act:

The document seeks feedback on five healthy homes standards:

Heating - what minimum achievable indoor temperature should heating devices be sized for in rental homes, where should heating be located, should landlords only be required to provide heating devices where portable electric heaters are insufficient and should certain heating devices be not acceptable?
Insulation - what is an appropriate level of insulation for rental homes and how should the condition of insulation be assessed?
Ventilation - what is the appropriate level of ventilation to ensure rental homes have adequate airflow in areas of high moisture?
Moisture ingress and drainage - are existing laws for rental homes sufficient to protect against moisture and inadequate drainage or could regulations better protect against moisture entering the home?
Draught stopping - what appropriate measures should landlords take to stop draughts in a rental home?

The discussion document also seeks feedback on the timing and phasing for when landlords must comply with the standards.

The Government is also asking landlords, tenants and other interested people to have their say on proposed changes to the Residential Tenancies Act.

Feedback is being sought on:

ending no cause terminations while ensuring landlords can still end tenancies for justifiable reasons
increasing the amount of notice a landlord must generally give tenants to terminate a tenancy from 42 days to 90 days
whether changes to fixed-term agreements are justified to improve security of tenure
limiting rent increases to once a year
whether there should be limitations on the practice of ‘rental bidding’
whether the general obligations that tenants and landlords have remain fit for purpose
how we can better equip tenants and landlords to reach agreement about pets and minor alternations to the home
whether further controls for boarding houses are needed to provide adequate protection for boarding house tenants
introducing new tools and processes into the compliance and enforcement system.

The consultation period for submission on the changes to the Residential Tenancies Act closes at 6pm on Monday, 22 October 2018.

People or organisations can make submissions on the proposed changes by filling out an online survey or making their own submissions directly to MBIE.

Further information about the proposed changes and submission process for Healthy Homes standards is available here, while information on proposed changes and the submission process for the proposed changes to the Residential Tenancies Act is available here.

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34 Comments

by BuyLowSellHigh | 12th Sep 18, 3:48pm 1536724091

I filled in the survey last night and it took nearly an hour. If these changes go through, particularly no cause evictions, landlords are going to have to be very risk-averse/selective when choosing tenants. Many would-be tenants who would otherwise have been given the benefit of the doubt will be turned down. I'd rather the house sit empty for a while than risk it.

Edit: This only affects periodic tenancies, so I'll probably end up doing 1 year fixed terms only. I usually let the agreement default to periodic when the 1 year comes to an end. What I'll do instead is advise the tenant that I'm ending the agreement at the end of the 1 year term, and that we need to sign a new 1 year fixed term agreement. This seems like a good enough work-around to me. At least I won't risk being permanently stuck with bad tenants.

by Zack Brando | 12th Sep 18, 1:36pm 1536716204

You're talking a load of nonsense ..

I wouldn't consider any of the changes listed above to be real changes .. not even extending the notice period to 90 days, because it currently is 90 days already~!!! Banning rent bidding is a good idea, but personally I've never experienced such a practice - just anecdotes through the lame-stream-media.

Real change would be allowing tenants to end their fixed terms early; if their properties are faulty (cold, damp, rotting, taps/shower problems, etc) and requiring landlords to sign off on bond repatriation within 5 working days AND face HUGE fines if bond disputes turn out to be baseless.

Now those changes would be a gamer changer, not the piddly changes, which aren't even changes you're bemoaning.

by BuyLowSellHigh | 12th Sep 18, 3:46pm 1536723982

You don't think ending "no cause" terminations is a real change? Why?

You're also wrong about the notice period. The notice period if the house is to be sold, is needed for an employee/family member, or for the landlord to live in is 42 days, not 90 days. They want to change it to 90 days.

by Retired-Poppy | 12th Sep 18, 1:51pm 1536717109

BLSH, if you're a professional Landlord in it for for the long haul as opposed to an anxious daily spot price checker, the "no cause eviction" is of no consequence. Tenants deserve stability.

Day by day, the odds are being stacked against short term speculators and this is a good thing. Like your good self, many have been caught out by the winds of change in a weakening market.

by BuyLowSellHigh | 12th Sep 18, 1:51pm 1536717078

Yes, tenants deserve stability.

Will be of no consequence because I'll be picking only the safest tenants. I've never served a 'no cause' eviction, but I'll be very selective given that this option will no longer be available. I'm a first class landlord poppy - very attentive and I've never increased the rent on a tenant. And I'm not a short-term speculator - I've never even sold a house!

by Retired-Poppy | 12th Sep 18, 2:07pm 1536718037

ha-ha-ha-ha, you're such a dreamer :) Oh how the speculators have changed their story over the months..............yeah, uh-hmmm in it for the long term. Let's be honest here, on the aspirations (plus extensive leverage) on which you bought, hoping to safely ride it out is the only dignified option??

by Zack Brando | 12th Sep 18, 2:09pm 1536718186

@ BuyLowSellHigh

The Residential Tenancy Act already disallows "no cause" terminations. If you sign a tenant up to, for example; a 12 month tenancy - you cannot evict them during those 12 months. After the tenancy becomes periodic, you're already required to give them 90 days notice.

I do NOT believe after a tenancy is expired a landlord should have to keep providing accommodation, rather the current 90 day system should apply. Saying that, to be fair on tenants:

- Letting fees should be abolished as they act as an incentive for property managers to constantly replace tenants (moving is expensive).
- The bond system needs shaking up, it works at a glacial pace .. meaning tenants cannot transfer their current bond to their new/prospective property in time.

That would be reasonable IMO.

by BuyLowSellHigh | 12th Sep 18, 2:20pm 1536718828

The Residential Tenancy Act already disallows "no cause" terminations. If you sign a tenant up to, for example; a 12 month tenancy - you cannot evict them during those 12 months. After the tenancy becomes periodic, you're already required to give them 90 days notice.

You need to re-read the Act.

I promise you, the Act does currently allow "no cause" terminations for periodic tenancies, with 90 days notice required. Why would the Government be proposing to remove "no cause" terminations if the Act already disallows this? I also promise you that the notice period for the circumstances I mentioned in my previous comment (sale, family member moving in, employee moving in, or landlord moving in) is 42 days, not 90 days. Why would the government be proposing to change the notice period to 90 days if it is already 90 days?

I suspect that the source of your confusion is that the changes relate to periodic tenancies, not fixed term.

by Zack Brando | 12th Sep 18, 2:43pm 1536720180

You are right, the 42 days applies to a Periodic Tenancy if a family member or sum such is moving in - otherwise it's 90 days.

We could write a new law, extending the notice period a landlord is required to give, by say; 1 month for each additional year spent by a tenant on a Periodic Tenancy.

Would you like that BuyLowSellHigh ~!!! LMFAO

by BuyLowSellHigh | 12th Sep 18, 3:11pm 1536721891

Will you also acknowledge that the Act does currently allow "no cause" terminations?

I wouldn't mind your proposal. I just want to be able to ask them to move out (don't really care about the notice period) without having to present evidence of wrongdoing to the Tenancy Tribunal, as this can be very difficult to deliver.

For example, if a tenant calls me the c-word and threatens to burn the house down, I'd be powerless to evict them, even with 90 days notice, unless I happened to record the conversation.

by Chairman Moa | 12th Sep 18, 4:14pm 1536725683

You will have to let them know that you are GOING to record the conversation.. So your chance of evicting them is about 0.000000012%

by Retired-Poppy | 12th Sep 18, 6:46pm 1536734804

BLSH, visions of you wearing a GoPro made me think of the following TV series. All Landlords choose their tenants carefully don't they? https://www.youtube.com/watch?v=ztNV7VkKDQk

by BuyLowSellHigh | 12th Sep 18, 7:18pm 1536736694

Good idea regarding the GoPro.

My point is that landlords will need to be more selective in the future, because if they end up with bad tenants on a periodic tenancy agreement, they may be stuck with them for good.

by Craig C | 12th Sep 18, 11:52pm 1536753128

Yep, they already shoulder most of the risk for a very expensive purchase, that most have worked hard for. The ridiculous Osaki ruling being yet another nail in the coffin of common sense. I've been a landlord for 20 years, I don't charge letting fees and like to keep my tenants long term whenever possible, I've spent tens of thousands upgrading properties in the past couple of years but with the playing field seems to be getting more and more tilted and the proposed changes are likely to reduce the number of people willing to risk their investment which means even fewer places for those with bad credit ratings, tenancy tribunal orders against them etc- why would you risk it?

I would like to see longer term fixed term tenancy options to add stability for both tenant and landlord but the fact is many people can't plan more than year ahead and wouldn't want to be locked in to a 2,3,4 year tenancy so not likely to see that happen.

With a periodic tenancy a landlord currently has to give 90 days notice, yet a tenant only has to give 21 days. Fair? Reasonable? Especially given proposed changes making it harder to evict. Increasing the 42 day for family members/ sale of a property will also impact people buying a home for themselves and gridlock the buying process. Yes, you can buy the house but no you can't live in it for at least 3 months till the 90 day notice is up, and the no cause is sometimes necessary so needs to be retained.

Here is a proposed change though. Not paying your rent is actually considered a crime, it's treated as theft and not just a slap over the wrist with a wet bus ticket but an ineffective tenancy service where if you are lucky the tenant is ordered to pay $5 per week for the x number of months years and then don't. Try going to the supermarket taking a trolley of groceries, or spend a couple of nights in a hotel and walk out, or taking off from the service station after filling up your car without paying. Why is theft from a landlord treated differently?

by Nzdan | 13th Sep 18, 6:23am 1536776615

I assume by not paying your rent you mean people who disappear owing thousands. Then I agree. Criminal charges, wage/benefit attachment orders as a percentage of income rather than some arbitrary pocket money rate. Seemed to work well when I had an outstanding traffic fine I’d forgotten about many years ago.

by Craig C | 13th Sep 18, 6:56am 1536778566

Yes, for those who end up owing hundreds or thousands and buggering off. There is a subclass of tenant that knows the system inside out and simply move from one rental to the next racking up thousands in unpaid rent each time and its costs the landlord more and more as they wait to try and get through the tenancy tribunal process to evict. As a landlord try not paying you mortgage and see how the banks deals with you.

by Pragmatist | 13th Sep 18, 7:40am 1536781248

The bank deals with you thru the civil law court system, it does not deal with you thru criminal law system. Should we give banks access to criminal law and give every ody that falls behind on their mortgage a criminal conviction like you seem to want do with tenants?

If you don't like the rules of the game, don't play. Sell up and retire, or find a new game to play.

by Pragmatist | 13th Sep 18, 7:16am 1536779799

Do you also plan to expand this for all small businesses/other civil law debts?... Or are we giving special treatment to debts owed one group of businesses?

Why should Dave the owner of the local automotive workshop not have the same ability?

by Nzdan | 13th Sep 18, 7:46am 1536781579

Well we are talking about the Residential Tenancies Act but sure why not? If somebody has signed a contract and then skipped town without paying then yes if the small claims court decides in favor of Dave the Mechanic then don't muck around, get the IRD involved and slap it on their wages.

by Simon | 13th Sep 18, 2:12am 1536761560

Looks like you only did the healthy homes survey and not the RTA survey which mentions ending fixed tenancies of short length to prevent LL doing as you have suggested.

by kiwimm | 12th Sep 18, 1:22pm 1536715370

So they are giving landlords 42 days notice to respond or they are out. Shoe's on the other foot now?

by Nzdan | 12th Sep 18, 1:40pm 1536716438

If the Government were fully serious on healthy homes, they'd roll out a Nationwide assistance programme for every home owner/landlord to install a primary heating source or ventilation system (Log Fire, Heat Pump, HRV) that can be paid back over 10 years at 2% p.a. Everybody wins. No excuses.

Greater Wellington do something similar, we got our heat pump installed recently through this and it adds $9 per week to our rates.
http://www.gw.govt.nz/wellington-region-scheme/

by Sluggy | 12th Sep 18, 2:23pm 1536719011

I can understand giving assistance to your primary residence (ie owner operated), but landlords are in business, I cant see why the government should give them another free pass ? Unless the government is donating nearly free money to all SME's ?

by Zack Brando | 12th Sep 18, 8:46pm 1536742017

Nice thought Nzdan, however, this would just encourage property speculators to bid higher prices for investment property .. the government would effectively be subsidizing said properties' maintenance/legal-requirements.

It's a slippery slope. It would be better for speculators to do their sums before signing on the dotted line. It's not the government's responsibility to provide landlords or tenants with heating.

by RickStrauss | 12th Sep 18, 2:25pm 1536719158

Socialism for property investors...? What is this communist rhetoric?

by Shoreman | 12th Sep 18, 2:43pm 1536720184

Whenever Governments try to intervene in a sector of an economy they rarely get it right and cause distortions. As I have mentioned before all houses need to have these rules applied not just rentals. A black market is already happening where both renter and landlord don't want this red tape. Classic example is a old villa in waiting for redevelopment rented direct to students as it wouldn't be worthwhile insulating and students can have parties win win

by Pragmatist | 12th Sep 18, 7:04pm 1536735890

90% of the time when govts try to intervene it is because leaving things to "the market" already hasn't worked and things are screwed up.

All houses need to have the rules applied... so you want to fine owners for not bringing their own house up to spec? Or for not giving themselves suffcient notice of eviction? Have you actually engaged brain, or was this a reflex action.. labour said something so I must say something anti-it?

Unless you are meaning when they go to sell it? ie, either sell it in a state that is fit for habitation, or sell as a development only type deal (seems a bit pointless to me tho)

by BuyLowSellHigh | 12th Sep 18, 8:39pm 1536741578

You should visit Venezuela. They like your style of governance over there.

by Pragmatist | 12th Sep 18, 9:18pm 1536743906

*yawn* You're yesterdays toy.. getting boring already.

by PocketAces | 12th Sep 18, 5:30pm 1536730206

If any of these new regulations rid us completely from (most likely imported) slum lords such as the guy in Papakura now evicting the tenants that kicked up a stink about the swamp under their house, then we will be on a winner. We do not need the likes of him.

by Craig C | 12th Sep 18, 11:20pm 1536751214

There has got to be more to that case- or just the world's dumbest slumlord. Seems like a retaliatory act by the landlord to me, the family in question should be ringing Tenancy Services for advice. Probably won't, like most tenants probably haven't a clue about their rights and prefer trial via media.

A ‘retaliatory notice’ is where a landlord gives a notice to a tenant to end a tenancy in retaliation for a tenant standing up for their rights.

It is an unlawful act for a landlord to issue a notice to end a tenancy in retaliation for any complaint made by a tenant relating to the tenancy. The Tenancy Tribunal can award exemplary damages of up to $4,000 if a landlord does this.

If a landlord issues a retaliatory notice, the tenant can apply to the Tenancy Tribunal to have the notice set aside. The tenant has to make this application within 28 working days of receiving the notice.

That's what I'd be advising them to do.

by sharetrader | 13th Sep 18, 8:12am 1536783167

there problem is now they have already gone to the TT (even though they were in the right) they have a black mark against there name, so finding a new rental is not going happen with all the publicity they got unless they are very very lucky.
they need to go to housing nz the waiting list is forever but you never know the publicity may help them

by Robt. | 13th Sep 18, 4:50pm 1536814219

On what criteria will submissions on the proposed RTA changes be judged? I sugest it will depend on whether the proposals are motivated by idealism and what the true goals of the proposals are. If the true goal in the minds of enough of the politicians is to crash the housing market or to indulge their prejudices then reason will probably not prevail.

by The next generation | 16th Sep 18, 4:46pm 1537073173

I am a landlord, in my view these changes do not go far enough: tenants should have the right to rent long term, so kids don't have to change schools all the time. They also should have the right to be warm, dry, pest free and treated with diginity and respect. They also have the right to be able to budget, which means their rents should not randomly go up. In return, they need to look after the property and almost all tenants do. We are renting out a house in a city where the market currently favours tenants over landlords, but in treating tenants with respect, we have never yet had one week without a tenant.

Submissions being sought on proposed changes to standards for rental properties and the Residential Tenancies Act

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