The Tenancy Law is Under Construction

The Tenancy Law is Under Construction

quinovic No Commnets

The Tenancy Law is in the WORKS

 

The saying goes; “there’s always a light at the end of the tunnel”. Many may be sceptical with the latest changes being implemented to tenancy law. Why? Well, we could seeing a boost in tenants’ rights. Some may be in awe, what will happen? The specifics are yet to be released and we’ll be sure to be the first to inform all of you. But, what we do know is that the landlord advocates will be relieved to hear rent controls won’t be among the rights.

 

So, what is INFLUENCING the Decision?

 

Let’s start with the facts that are influencing these changes; our very own Housing and Urban Development Minister, Phil Twyford has come forward and informed us that he is thinking about the practicality of introducing a legislation that will eventually transform the RTA at the conclusion of 2018.

Taking into consideration what Twyford has said; “New Zealand tenants have less rights than any in the Western world”, it is understandable that his mission is to reform the existing law to improve the tenants’ rights. Ultimately, in time, what we will see is tenancies that span longer durations, happier tenants that have a feeling of security and consequently, landlords that aren’t looking for tenants every year. This may be a concern for some, however, long term, a property manager would eliminate any concerns. Eradicating any issues that you may face as a landlord – at Quinovic Wellington Regional Specialists, we work for the property owner, we pride ourselves on informing you with every piece of information we can. The reforms are likely to include restricting rent increases to once a year, banning letting fees and abolishing no-cause terminations.

 

Is there a REBUTTAL?

 

However, Twyford has also confirmed that rent controls will not be part of the reform package. Why you might ask, his belief is that “rent controls are bad policy which drive landlords out of the market, discourage landlords from upgrading and maintaining their rental stock, and only protect tenants in properties under rent control”. Rightly so, it stagnates a market because the improvements that would arise through rent increases cease to stop. Maintenance may become costly without the landlord receiving revenue as well as a variety of other possibilities.

Considering this situation, Twyford went further to address that the optimal long term solution to the current rental market squeeze is to increase the supply of housing on the market. With an altered RTA that decreases the interest from property investors, how is this supposedly increasing the supply?

 

The Take Home

 

Tenant groups have been advocating for the introduction of rent controls following claims that a rise in student allowances has led some Wellington landlords to significantly increase their rent. Taking a word from Andrew King (NZ Property Investors Federation executive officer) says that imposing rent controls would only make the situation worse. Twyford rebutted in reconsidering rent controls.

“There are high levels of regulation and new compliance costs already. That’s contributing to rising rents at a time when there is already a shortage of rental supply… Enforcing further regulation, like rent controls, is only going to accelerate the problem as private landlords stop replenishing the rental stock.”

The government is planning to conduct extensive public consultation with landlords, tenants and the general public before the RTA reform legislation is introduced to Parliament. Twyford says they have to get the legislation right so that it works for both landlords and tenants.