REINZ Disappointed Industry Feedback Disregarded In RTA Select Committee Report

The Real Estate Institute of New Zealand (REINZ) is disappointed that feedback from a range of property professionals has been disregarded in the Final report of the Social Services and Community Committee (Residential Tenancies Amendment Bill) which was released earlier this week.

REINZ along with the New Zealand Property Investors’ Federation and a large majority of those working in the industry have been campaigning for eight months now to explain how the proposed changes could negatively impact landlords and investors.

Bindi Norwell, Chief Executive at REINZ says: “Over the last eight months we have made clear our concerns around the fact that should the proposals go ahead; rental property owners will have limited abilities to remove tenants who are causing problems in their rental properties or causing trouble with neighbours.

“There are already provisions in place to protect tenants who believe a ‘no-cause’ termination is retaliatory. Landlords who misuse this provision can currently be ordered to pay damages of up to $4,000. So, we don’t believe the current situation needs to change - our preferred approach was for higher exemplary damages for landlords who abuse no-cause terminations. This would be much more affordable for the Government to implement, would require less education of landlords and property managers and wouldn’t add to the already significant backlog of Tenancy Tribunal cases,” continues Norwell.

Concerns around removing the 90-day notice were not just limited to property professionals, as a recent survey showed than tenants disagreed with bringing an end to the 90-day notice.

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“A recent REINZ survey showed that 45.4% of tenants were against removing the 90-day notice compared to 40.9% supporting the proposed change. A further 13.7% either didn’t know or neither agreed/disagreed,” points out Norwell.

REINZ is also disappointed that feedback around the proposal to automatically convert fixed-term tenancies to periodic tenancies has been ignored.

“If fixed term tenancies automatically convert to periodic tenancies, this will significantly affect areas with strong student populations such as Christchurch, Hamilton, Auckland, Wellington and Dunedin. There are significant concerns from landlords in these areas that students could let their tenancy rollover to a periodic contract throughout the Christmas period, then in the New Year after university has started back, the tenant could give notice to leave and the landlord will have missed the student market for a whole year. A tenant’s desire for security of tenure needs to be carefully balanced against a landlord’s need to manage business assets,” continues Norwell.

“Our survey found that most respondents (63.1%) disagreed with the proposal. Breaking the results down, nearly three quarters (71.4%) of landlords/investors didn’t agree with the proposed changes, 21.2% agreed and 7.4% were unsure. From a tenant perspective, more than half (61.5%) agreed with the proposal, yet more than a quarter (27.2%) disagreed with the change; the remaining 11.4% were undecided,” continues Norwell.

“It seems at odds with the purpose of industry consultation that the Government would go out and consult on its proposals, and that feedback from a range of organisations and industry professionals, including those who deal with these issues on a day-to-day basis, has not been addressed,” concludes Norwell.

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