The final countdown

This week was supposed to see the second reading of the Residential Tenancies Amendment Bill in Parliament. That didn’t come about. So what happens now?

Saturday, August 1st 2020, 7:56AM

by Miriam Bell

Earlier this week, landlords.co.nz reported that the Government’s contentious tenancy law reforms was sitting at number two in the week's provisional order paper for Parliament.

It looked like the Bill would be debated early on in the Parliamentary session and that landlords would head into the weekend knowing whether or not the reforms were set to become law or not.

However, other matters – including a lengthy debate over the Government’s Appropriation Bill, the valedictory speeches of various retiring MPs, and the dropping of the Bill to further down the order – meant that didn’t happen.

Instead, on Thursday, Leader of the House Chris Hipkins announced that the Bill is set to hit Parliament under urgency next week, which is the last week Parliament sits before it shuts up shop for the election.

That means the Bill will be pushed through its remaining stages (the second and third reading) next week and, assuming it passes, will become law next week.

But the fact that the Bill did not go through its second reading this week is a temporary reprieve of sorts – one which gives its opponents a few more days to contact Party leaders and MPs with their concerns about the proposed reforms.

Property professionals and advocates for New Zealand’s 290,000 landlords have fought a long and hard battle against some of the reforms in the Bill.

The major reforms contained in the Bill would:

• Get rid of landlords’ ability to use 90-day “no cause” evictions. (The RTA will instead have a list of approved reasons for terminating tenancies.)

• Require that fixed-term tenancies automatically become periodic tenancies once the fixed term ends, unless otherwise agreed.

• Extend the notice period tenants must be given if the landlord wants to sell or move into the property from 42 days to 90 days.

• Limit rent increases to once every 12 months instead of every six.

• Ban rental bidding.

• Allow tenants to make minor alterations to a rental property such as baby-proofing, hanging pictures, and earthquake proofing.

• Enable the Tenancy Tribunal to award compensation or order work to be done up to $100,000 (up from the current maximum of $50,000).

It is those first two proposals which landlords are particularly concerned about - and most fiercely opposed to.

That’s because they believe the reforms skew the balance between rental property owners and tenants’ rights in favour of tenants and erode the rights of the property owner.

They say the reforms would mean rental property owners effectively can’t control who lives in their property and that would cause investors to leave the market, pushing up rental prices further.

It’s also been pointed out that another unintended consequence of the reforms would be that investors who do continue to provide rental properties would become much more stringent in their tenant-vetting procedures.

While it was hoped the Social Services and Community Select Committee might respond positively to landlords’ feedback on these proposals, that did not happen.

Instead the Select Committee gave the Bill the green light and sent it back to Parliament for its second reading.

The Government, which says the reforms are about ensuring protections and fair rights for New Zealand’s growing pool of tenants, has long been keen to see their proposals become law this term.

For this reason, the reforms were always set to be pushed through before this year’s election.

At the Bill’s first reading, 63 (Labour, NZ First and Green) MPs voted in favour of it while 57 (National, ACT and Jamie Lee Ross) voted against it. That split means that if some MPs changed their vote this time round it could halt the Bill’s passage into law.

And that’s why landlord advocates are urging opponents of the reforms to contact MPs – particularly Labour, NZ First and Green MPs - to communicate their worries about the reforms before next week’s Parliamentary session gets underway on Tuesday.

They feel there’s still a chance that speaking up could make a difference and could halt the progress of the biggest overhaul of tenancy law in decades.

Read more:

RTA reforms pile pressure on landlords

Select Committee green lights tenancy law reforms

Opposition to RTA overhaul rages

Tags: APIA compliance conduct investment Kris Faafoi NZPIF property investment property management rental market rents RTA tenancy reform Tenancy Tribunal tenants