COMMENT: War on tenancies should stop

Life for rental property owners may become tougher as Labour’s newbie Housing Minister Phil Twyford tries to “make life better for renters”, Stop the War on Tenancies founder Mike Butler warns.

Wednesday, November 21st 2018, 9:00AM 6 Comments

The current raft of proposed tenancy reforms comes on top of what is essentially a 10-year war against the owners of rental property. Concerns about this have prompted a group of us to establish a new lobby group, Stop the War on Tenancies.

I have owned rental property in Hastings since 1990. One of our tenants has been in her flat since 1990, on a periodic tenancy, which started with a weekly rent of $130 and a bond of $260. The rent has increased but the bond hasn’t.

But the world changed for rental property owners, like myself, when the Labour Party was in the political wilderness from 2008 to 2017.

That was when a series of “crises” were created for political gain. One of these developed the narrative that “cold, damp houses owned by greedy landlords were making our kids sick and something must be done”.

The blame was placed on rental property owners. But, in reality, the main reason a house stays cold in the winter is that many are scared to turn the heater on. And that’s because the price of electricity has gone up so much in recent years.

A proposed rental property warrant of fitness (WoF) in 2014 prompted me to obtain a substantial amount of information under the Official Information Act (OIA). This indicated to me that a rental WoF would be a costly mistake.

That year, also via OIA requests, I established that there was no evidence of harm from methamphetamine residue inside dwellings.

But it was not until June of this year that the Prime Minister’s chief science adviser, Sir Peter Gluckman, officially busted the meth testing nonsense. He confirmed there has never been a documented case of someone getting sick from third-hand exposure to meth.

If there is any doubt that there has been a 10-year war on rental property owners, consider that after the 2010 amendment to the Residential Tenancies Act, the campaign continued. There was:

• Holler v Osaki [2016] NZCA 130, an Appeal Court decision which shifts responsibility for damage by tenants to owners and their insurers.
• The Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016.
• The Healthy Homes Guarantee Act 2017, which requires extra standards for rental property with the standards. The proposed minimum standards were released for consultation in September.
• The Residential Tenancies (Prohibiting Letting Fees) Amendment Act 2018.

However, not all of the requirements are based on sound equipment or advice.

For example, underfloor insulation probably has no quantifiable benefit since only 10% of heat is lost through the floor and no consideration was given to the benefit of carpets in most properties. Even so, if an owner has not installed underfloor insulation by July 1 next year a tenant could dob him or her in to get $4000 in exemplary damages.

And then there are the Government’s proposed tenancy law reforms which would prevent owners from ending tenancies, ban fixed-term tenancies, allow tenants to modify a property and allow tenants to keep pets. Public consultation finished recently, but it has bought out heavy opposition from rental property owners.

Questions under the OIA show that much advice from the MBIE is based on conjecture, not facts. This is because even the Government is short of basic information on the rental property market, which is a $6-billion sector of our economy.

It’s easy to say that there is no one in Parliament sticking up for property rights but that is not true. The reason why ideologically driven anti-owner legislation currently sails through Parliament unimpeded is due to the composition of the Government.

Why haven’t rental property owners become more active politically? There are probably around 260,000 of us. That’s double the number needed to reach the 5% threshold of getting into Parliament - should all rental property owners vote for a property rights party.

But going down the political path is a long journey. It is probably too long for someone with one or two properties who has just started to lose money on an investment. They are more likely to simply sell up.

One reality that the Minister may have not considered is the likely impact of 260,000 owners selling 524,000 rental properties to first home owners. Where would renters go then?

Mike Butler is a Hastings-based owner and manager of rental properties. He is also the founder of Stop the War on Tenancies.

Tags: housing market landlords property investment property management rental market tenancy reform

« COMMENT: Landlording is a business

COMMENT: Embedded networks - what to watch out for »

Special Offers

Comments from our readers

On 21 November 2018 at 11:09 am Sooky1 said:

I'm sorry but Twyford needs to learn that Tenants already have more rights than the House owner, very very few house owners do not have a house returned to them in a proper and fit condition to re let, without having to spend serious money on them to get it fit for re tenanting to new people, it is a tragedy the way other people treat rental housing and let me tell you we owned 13 rental properties and we worked for HNZCI for 40+ years so I'm well qualified to comment here, every tenant stops paying rent 2-3 weeks before they vacate which renders any Bond useless!! then we have the repair bills which very quickly escalate into many thousands of dollars and just you try and recover that!! impossible!!no matter what rent one charges it never compensates the Landlord for the unwanted costs and here we are an MP wanting more and more rights for tenants!! little wonder most Landlords exit owning Rental properties, we exiting was the best move we ever made!!!

On 21 November 2018 at 12:52 pm Janice111 said:

All our tenants drink, smoke, regularly have take-aways, big cars, overseas trips but at times we struggle to get their weekly rent out of them because "we're charging too much and are rich greedy landlords". Never mind we have a mortgage to pay too plus on-going maintenance. We have employment as well as 3 rentals and we do all the gardens and lawns and it's a sizeable property. When they're relaxing, we're slaving away. In other words, a lot of them are where they are and will stay that way due to their attitudes and continued lifestyle. But if they were different then we wouldn't have tenants and they would own their own place and not need us.

On 21 November 2018 at 1:32 pm hh said:

Hi ,When I buy an investment property I pay first to vendor,lawyer,bank,and then to many handy men like plumber,builder,Electricion,painter,carpet,appliances,kitchen.cleaners....and I pay rate and insurance,and banks mortgage to finally provide house for people and so I contribute to economy very well ,little profit or nothing waiting for capital gain which takes many years and there is no country in the whole world can provide sufficient decent places to live,and landlord badly needed and in most cases moulds appear because tenants do not open windows and do not open curtains to let enough lights in.
Regards

On 22 November 2018 at 12:04 pm Wane said:

I collected rents back in 1980 Then the system needed upgrading. Now the Tenancy Law has worked for a while. With the new changes taking place my portfolio will reduce from 17 now to 16 I plan to continue selling as The Current Govt has made changes that will not work long term. As Labour is a socialist party same as Russia they mean to supply housing fully controlled and manipulated by them. As the writer says I placed a heat pump for warmth and remove condensation but the Tenant refuses to turn it on. Another Tenant was asked to leave by the Tribunal, they used a piece of wood and a kitchen knife to smash the place up as they left. I fixed it, and have a good Tenant there now. The Govt needs to be realistic as to why these people rent and will never own or have the desire to own a property because then they will need to look after it.

On 23 November 2018 at 4:10 pm zedera said:

This was very timely for me.
This morning I had a insulation assessment as we are required when signing up a new tenant. I have been told that we need to replace our underfloor insulation, and top up our roof insulation at a cost of about $1200. Apparently these met the approved standards when the rental was built about 25 years ago.
Our tenant has just moved out after 13 years so can’t have been that unhappy.
Our house next door was built about the same time and to the same standard. So according to the government I am living in a sub standard house. How ridiculous.
Surely a sane system would have required a house to be insulated, period. If it had no insulation, sure, make it compliant to today’s standards.
Prescription is this Labour governments preferred option. That always has unintended consequences

On 25 November 2018 at 11:42 am jeff.saunders said:

This writer is on the money - well, all of the money property owners must continue to spend to meet further updated previously updated legislation, and to make sure that tenants have all the warmth they require should they have enough personal responsibility and wisdom to use it. This government forces landlords into making costly upgrades of their property so that a socialist government can claim that it’s looking after the downtrodden. If more effort was made to target the small percentage of landlords who provide genuine substandard accommodation, we wouldn’t need an ongoing war on ALL landlords.

Sign In to add your comment