Amendments to be introduced in the first quarter of 2020 have been proposed by government for the Residential Tenancies Act. Below looks at how we understand each proposed change, and what changes we think will help the industry.
First Proposed Change: Restrictions on Ending Tenancies
Part One: Restrictions on Ending Fixed Term Tenancies
This amendment requires that fixed-term tenancy agreements must become periodic tenancy agreements upon expiry unless: both parties agree otherwise, the tenant is not meeting their obligations, or specified grounds for the tenancy to end apply.
Part Two: Restrictions on Ending Tenancies
Landlords will not be able to end a tenancy unless they are selling the house, doing major renovations, if there have been three complaints of anti-social behaviour or if there have been more than three instances of rent being paid more than five days late over a 90 day period.
Our Opinion: This amendment will mean landlord won’t be able to end a fixed or periodic tenancy unless they are selling the property, doing major renovations, if there has been three complaints from neighbours or police of anti-social behaviour over a 90 day period, or there has been more than three instances of rent being paid more than five days late over a 90 day period.
This change puts landlords at risk of being trapped with difficult tenants who damage the property, are abusive or disrespectful to the landlord themselves (but don’t interact with the neighbours, meaning no complaints), or conduct other behaviour that can create difficulties for the owner and property, but refuse to leave the property, and so the tenancy must continue despite the landlord’s wishes and best interest.
With this potential upcoming amendment, now is more important than ever to ensure you select great tenants for your properties. At Quinovic, our team has a system in place so all applicants are spoken to at viewings, current landlord and employer referees are checked, online screenings and credit checks are conducted, as well as other industry-leading checks, so great, reliable tenants are selected for properties managed. Our clients don’t want difficult tenants and neither do we.
Second Proposed Change: Increased Financial Penalties
There will be increased financial penalties and the regulator (through the Tenancy Compliance and Investigations team) will be given new tools to take direct action against parties who are not meeting their obligations.
Our Opinion: The reasoning behind this proposal is clear. The government wants to further discourage non-compliance by increasing the penalties and providing more checks in the industry. Can’t argue that logic.
Third Proposed Change: Anonymising Tenants and Landlords
Identifying details will be anonymised in situations where a party has been wholly or substantially successful when taking a case to the Tenancy Tribunal.
Our Opinion: If the person is successful in protecting their rights, then they shouldn’t be condemned, nor should people fear that successfully protecting their rights will influence their ability to rent in the future.
Forth Proposed Change: Allow Minor Fittings
Tenants will be able to add minor fittings such as brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells, and hang pictures.
Our Opinion: In theory this is a good idea, tenants can feel safer and personalise their property to make it feel more like their home. Unfortunately, there will be some tenants who hammer huge nails into walls to hang pictures, or badly install brackets etc, creating damage that can’t be claimed by owners.
Fifth Proposed Change: Prohibit Bidding
Rental bids by landlords will be prohibited and rent increases will be limited to once every twelve months.
Our Opinion: Prohibiting bidding will help renters as well as landlords. We’ve never accepted rent bidding or “rent bribes” from people, because too often the renters who are willing to pay too much for the property turn out to be difficult tenants who hope their money will stop you reference and background checking them.
Changes We Think Will Help the Industry:
Promote Current & Amended Laws
It’s one thing to create and amend laws, it’s another for people to know and follow them.
The Healthy Homes Insulation July 2019 deadline was promoted for months on social media and outdoor advertising. Everyone knew about the upcoming change, and because of this the implementation was a great success.
It would be great if Tenancy Services learned from this and allocate more funding into paid promotions on basic tenancy laws as well as amendments. Many DIY landlords and tenants simply don’t know they are breaching the others’ rights, or they themselves don’t know the other party is breaching their own rights. Unfortunately, despite it being so important to do so, both parties can be at fault for not keeping themselves up-to-date with tenancy laws. Promoting tenancy laws will help build awareness and create more consistency in the industry.
Property Management Certificate
Right now, anyone can be a Property Manager, no certificate is necessary.
Larger, experienced businesses like us at Quinovic Kent Terrace have a system in place, keeping the entire team updated and trained on upcoming tenancy amendments and better practices, ensuring all properties and managements are compliant and successful. Smaller Property Management companies don’t necessarily have the same commitment or don’t have a reliable system in place, leaving many investors and tenants vulnerable.
Requiring practicing Property Managers to acquire certificates and attend annual courses updating them on laws and improved practices will help create more consistency in the industry. It may also help encourage DIY landlords who struggle or don’t keep up with tenancy laws or best practices to use experience Property Managers, promoting more consistency in the industry.
Creating laws that lean too far in the tenant’s favour and putting investors to an unfair disadvantage could end up causing too many problems in the rental property industry, pushing investors out of the market, decreasing the number of rental properties available, and increasing rents even further. It would be helpful if the government focused on creating more consistency in the industry and tribunal rulings and promoting their laws so everyone understands their rights.
If you're considering Property Management get in touch with us today. Locally owned and managed, we offer residential property management services across the entire Wellington & Hutt Valley region.
We take care of investments, offering peace of mind and a personal service to investors and tenants alike. Our solutions are backed by industry-leading technology and proven systems that promote both excellent property care and strong investment returns. Taking on all aspects of the landlord’s role, we guide our clients with professional, tailored advice using our extensive experience and insight in the rental market that can only be built over time.
If you would like to chat about the possibility of working together, or to receive a no-obligation, FREE Rental Appraisal get in touch with our team today.
Quinovic Johnsonville | Wellington
Call Jordan Atkinson - 027 297 0873
Quinovic Hutt Valley | Wellington
Call Helen Vance - 027 487 8103
Quinovic Kent Terrace | Wellington
Call Jordan Atkinson - 027 297 0873
Quinovic Wellington Property Managers