New renting laws mean landlords cannot end tenancies without a reason. Renters must have caused three anti-social incidents in a three-month period. Advocates for the poor are happy, saying the changes mean slumlords can’t evict tenants for complaining about bad housing.
Calling out slumlords
Child Poverty Action Group (CPAG) housing spokesperson Frank Hogan elaborates.
“If a tenant complained about substandard conditions, damp, cold, mouldy circumstances in a home, there was nothing to stop a landlord … from serving notice,” Hogan says.
But the New Zealand Property Investors Federation (NZPIF) says the new law prevents landlords from protecting neighbours from bad tenants.
NZPIF president Sharon Cullwick explains: “We think that it’s about two percent of tenants who receive a 90-day no-cause termination notice and those are often from anti-social tenants."
Anti-social actions include excessive partying, and posing a danger to neighbours.
Rent bidding banned
Both CPAG and NZPIF are glad that the practice of ‘rent bidding’ is now illegal.
When a house was in high demand, would-be renters could offer a higher rent to secure a tenancy. Landlords would then rent out their property to the highest bidder.
Under the old law, landlords could solicit higher rents and renters could offer to pay more.
CPAG sees the new law as bringing tenancy law into the modern age.
“What we’ve done as it were, is clear the decks of no-fault,” Paul Hogan says.
“Now there has to be a reason given.”
“It’s too risky now for a landlord to give a tenant a chance.”
But NZPIF says investors will be less likely to rent properties to the poor.
Sharon Cullwick says in the past, property investors would often have a property that they would rent out to low-income tenants.
She recalls renting out a property to a solo mother who had been renting a cabin for 18 months. Having the 90-day no-reason termination gave Cullwick the protection to take a chance on this family. That mother of four ended up being one of Cullwick's best tenants.
But removing the safety net from landlords means they might prefer to withdraw from social housing, to protect their investments.
“It’s too risky now for a landlord to give a tenant a chance,” Cullwick says.
She believes the demand for emergency housing will increase as landlords take fewer chances.