REINZ warns tenants without an ‘excellent’ record may struggle to find tenancies as RTA Bill progresses through parliament

The Real Estate Institute of New Zealand (REINZ) is today warning that tenants without an ‘excellent’ rental history may struggle to find tenancies as the Residential Tenancies Amendment Bill is due to have its second reading today.

The Bill proposes to remove 90-day no cause terminations making it extremely difficult and time consuming for landlords to remove problematic tenants, meaning that tenants who can’t provide an ‘excellent’ rental history may now be impacted when applying for rental properties.

Bindi Norwell, Chief Executive at REINZ says: “Over the last eight months we have been engaging with the Government on behalf of the roughly 100,000 rental properties our members manage to warn them of the unintended consequences of this Bill. Our feedback, and feedback from other property professionals, has largely been disregarded and now things may to start to get extremely difficult for rental property owners as they will have limited abilities to remove tenants who are causing problems in their rental properties or causing trouble with neighbours.

“It may also get much more difficult for tenants who can’t provide an ‘excellent’ tenancy rental history, as a rental property owner is now unlikely to select that tenant for fear that they will be unable to remove them should there be issues down the track,” warns Norwell.

REINZ has also highlighted the issues around fixed-term tenancies automatically converting to periodic tenancies which has also been included in the second reading of the Bill.

“The change to fixed-term tenancies automatically converting to periodic tenancies will significantly affect areas with strong student populations such as Christchurch, Hamilton, Auckland, Wellington and Dunedin. Some of these areas are already struggling in a post-COVID environment, and these changes will just add further stress for rental property owners,” points out Norwell.

“It is extremely important that tenants’ rights and their interests are protected, but the changes announced today have gone too far the other way. We believe that there needs to be more balance in terms of protecting both tenants and rental property owners,” she continues.

“Now, more than ever, our advice to rental property owners would be to consider using a property management professional who is up-to-date with the current requirements and can assist to resolve issues if they arise.

“It seems at odds with the purpose of industry consultation that the Government would go out and consult on its proposals, and that the overwhelming feedback from a range of organisations and industry professionals around the 90-day notices and fixed-term to periodic tenancies automatically converting is disregarded,” concludes Norwell.

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