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Green Party Bill to improve the rights of renters

Written By: - Date published: 6:55 pm, August 11th, 2016 - 92 comments
Categories: greens, housing, tenants' rights - Tags:

A press release from the Greens today outlines a Bill that will increase the rights of renters.

Green Party Bill puts renters’ rights on the agenda

A Green Party Member’s Bill pulled from the ballot today will put renters’ rights firmly on the political agenda, where it belongs.

Metiria Turei’s Residential Tenancies (Safe and Secure Rentals) Amendment Bill strengthens tenants’ rights, and will lead to stable, long-term tenancies that are good for both renters and landlords. The 2013 Census records 453,135 households as renters, an increase from 388,275 in the 2006 Census.

“My Bill will help people who rent get the stability they need to put down roots in their community,” Mrs Turei said.

“The home ownership rate is reducing and more families are renting – those families’ rights need be protected so they too can have a stable and secure home life.

“Families who rent often find themselves pushed around from house to house, and their kids moved from school to school, unable to settle down.

“The rental market is the other side of the housing crisis that affects hundreds of thousands of New Zealanders.

“In many other countries, particularly in Europe, long-term tenancies in quality, warm homes are the norm.

“Landlords benefit too when tenancies are stable and long term, because the property gets looked after and there are no time gaps when tenants aren’t paying rent.

“Home ownership is at the lowest level since 1951 and everyone deserves a home to call their own – whether they rent or buy,” said Mrs Turei.

The Bill makes six changes to the Residential Tenancies Act:

  • Allowing tenants a right of first refusal when their lease expires.
  • Requiring landlords to be transparent about how they calculate rent rises.
  • Removing obligations on tenants to pay leasing fees.
  • Creating a default lease term of three years, with the ability to choose a shorter term.
  • Preventing rent increases more often than once every 12 months for periodic and fixed-term tenancies.
  • Restoring the 90-day notice period when landlords wish to sell the property.

 

92 comments on “Green Party Bill to improve the rights of renters”

  1. adam 1

    A good first step.

    In conjunction with an overhaul of state housing, this will improve many people’s lives.

    Can I suggest the Green revisit the law around lodging houses as well.

  2. Bill 2

    Would still like to see a provision whereby the lease and all conditions transfer to the new property owners, as well as some other stuff.

    But hey. Glad that someone is finally talking about rental properties as something central to peoples’ lives, rather than as an aberration or short term situation that people transit on the road to ownership.

    • Lanthanide 2.2

      “Would still like to see a provision whereby the lease and all conditions transfer to the new property owners, as well as some other stuff.”

      That is already the case, if the house is sold with the lease intact.

      If it is sold un-occupied, then the landlord can use the current 42 days to kick the tenants out – but only if they’re on a periodic tenancy. If you’re on a fixed-term, the tenancy can only be ended by mutual agreement, or by order of the TT if one or other party is in a situation where the lease needs to be ended due to extreme circumstances outside their control.

      • weka 2.2.1

        I think Bill means that you can’t sell a house untenanted if it already has tenants in it. At the moment you can.

        • Infused 2.2.1.1

          You can’t if you have a lease in place. You can sell it to another investor which has to honor the lease

          • weka 2.2.1.1.1

            Lots of people don’t have fixed term leases and don’t have the option of one.

            • Lanthanide 2.2.1.1.1.1

              I know this is true but I find it kind of odd. All the places I’ve ever rented (4), have always been lease. Periodic was never offered – although I also didn’t enquire.

  3. AmaKiwi 3

    WOF – Warrant of Fitness for rental properties.

    You can’t put a car on the road without a WOF. Why can landlords rent uninhabitable dumps without a WOF?

    The issues are the same. Just as unsafe cars are a hazard to their occupants and everyone else on the road, cold, leaky, mold infested dumps cause diseases which are harmful to the tenants AND for all those they come into contact with. Add the lost work days and absences from school.

    I’d like to see someone do a study on the cost to society of bad housing. Be sure to include the tax money wasted on avoidable medical care. The costs would be a shocker.

    • Lanthanide 3.1

      I support a WOF – but – how is it going to be administered?

      Who is going to do the work? How they are going to be trained / accredited? How often does it need to be done? Who is going to pay for each WOF? How are landlords going to be made to improve their properties, and not pass these costs on to their tenants?

      • weka 3.1.1

        Tenancy Services (or HNZ) could administer.

        “Who is going to do the work?”

        Do you mean the repairs/upgrades? The Landlord would arrange that.

        Or do you mean the inspection? TS or HNZ, they can train and then retain those workers.

        Landlords can pay.

        The passing the cost on thing is the real sticking point. Rent freeze for properties that fail? Turei appears to be saying that rent increase rules have to be stipulated in the rental agreement, so I guess it could be dealt with there. Ultimately the bigger situation of housing needs to be solved. Putting up the rent is an option when there is a housing shortage.

        • weka 3.1.1.1

          GP policy,

          Assessors employed by local councils will check rental properties to ensure they are safe, warm and weather-tight. This will include: surfaces being clear of mould, decent ventilation, a functional toilet, properly connected drains, safe electrical wiring, floor and ceiling insulation, proper heaters, and no cracks or holes in the building fabric.

          Houses that meet these conditions will receive the basic Warrant of Fitness. A pilot project carried out last year with local councils indicates that over a third of rental houses will already meet these conditions.10 Landlords who fail to meet these conditions will be given three months to get their properties up to standard. If they are still unable to do so, they will not be allowed to charge their tenants rent until they can meet the Warrant of Fitness standard.

          https://www.greens.org.nz/policy/fairer-society/housing

          and,

          The Green Party does not expect the Warrant of Fitness to result in significant rent increases, given that few landlords in the pilot programme indicated they would hike rents following alterations to meet the conditions.12

        • Lanthanide 3.1.1.2

          ““Who is going to do the work?”

          Do you mean the repairs/upgrades? The Landlord would arrange that.

          Or do you mean the inspection? TS or HNZ, they can train and then retain those workers.”

          Yes, and how many people are we going to need to do this?

          According to the 2013 census, there were 66,000 rented houses in Canterbury. Most of those will be in Christchurch and Timaru, but also in other areas like Rangiora, Kaikoura, Kaiapoi etc.

          Say we need to get all of these houses inspected in a single year. Given 240 working days a year, if one person can inspect 2 houses a day, that’ll require 138 people to do full-time WOF appraisals of houses, in Canterbury. This is assuming that there’s perfect distribution of workers, no one is sick, no-one cancels WOF appointments, etc.

          Lets give them a salary of $55,000 a year. That’s $7.5M in salaries to do this.

          Where is that money going to come from?

          Also we need to train these people as well. Then add in all the re-assessments that will need to be done for houses that didn’t initially pass (apparently 2/3rds according to the Greens).

          The numbers really are quite prohibitive.

          • weka 3.1.1.2.1

            Why would all 66,000 houses need to be done in one year?

            Initial estimates suggest a Warrant of Fitness check would cost around $200-300. To encourage early compliance, the Green Party will set aside $24 million over three years. This will partly subsidise the costs of having checks done, as well as funding the cost of employing extra inspectors. This is on top of over $300 million in subsidies for home owners (including landlords) to insulate their homes.

            A recheck (on the 2/3) will be much less time than a full check.

            • Lanthanide 3.1.1.2.1.1

              “Why would all 66,000 houses need to be done in one year?”

              So how long do you think it should take to get through the whole stock a single time?

              How often will re-assessments be done? Houses deteriorate over time if not maintained.

              • weka

                Have a read of the policy Lanth, it’s not very long and addresses a number of your questions.

                2 year lead in time is voluntary.

                Most rentals assessed 3 yearly, those that fail repeatedly assessed more often.

                So when the scheme starts there will be a lot to do, but after that the workload should lessen.

          • mauī 3.1.1.2.2

            I don’t think it would be too difficult to train up assessors. That’s what they did after the earthquakes, I’m sure I remember EQC training up lots of newbies to assess houses for damage.

            A lot of the checks would be pretty basic too I guess, and don’t involve much skill:
            – Are there curtains?
            – Is there ceiling insulation? underfloor?
            – Basic water tests, functioning taps, hot water.
            – Check for mould? potential for mould?

            • Lanthanide 3.1.1.2.2.1

              EQC assessors were sometimes doing up to 8 houses a day.

              EQC assessments have been a big debacle.

              • EQC assessments required a much higher skill level than what’s being proposed here, as ideally an assessor needed to know a fair amount about building, physics, and what type of motion occured from the EQ in a particular area to accurately judge damage. A lot of inspections should have been sent back as being under- or over- valued, but the approach was taken that unless you were signed up to CHRP, it was easier to just cash settle the property and wait for those who were under-valued to complain. (because EQC was run like an insurance program, not like a repair program, and there was a fair amount of emphasis on not costing too much to the taxpayer) You’ll note that said approach has resulted in some people getting generous cash settlements, which surprisingly hasn’t been covered at all in the media. A few people probably got a sweet bonus of a couple thousand bucks because they had an old assessment that highballed the damage.

                The only specialist items to check here are the plumbing and wiring, and that could reasonably be achieved through training assessors to do the basics and calling in a tradie for marginal cases.

          • Matthew Whitehead 3.1.1.2.3

            Assuming an inspection rate of 2 houses per day is really low. Even if it takes nearly two hours to inspect a house, (which it won’t, it usually takes no more than 30 minutes to an hour to inspect a property very thoroughly, especially if you have qualified tradies present. The only two difficult things on the list are ensuring the wiring is safe and the pipes are properly connected, everything else can be done within 15 minutes at the property) you could still easily make sure to group rental property inspections that are nearby and easily achieve 3-4 a day.

            Assuming 250 working days a year and an 80% attendance for employees at your stipulated $55k annual salary, (which is probably a bit on the high side for the job being proposed compared to market rates) and a cancellation rate of two and a half percent, I make it just under 85 days of inspections to get the whole of canterbury if we assume four inspections per day, or 113 if we assume three. (I think four is appropriately conservative tbh)

            That’s $4.65mil to $6.2mil in wage costs for inspections in Canterbury to go through every property once. That’s a blip in the budget and completely manageable even if the taxpayer bears the complete cost and there are no fines levied for noncompliance.

            If we use the census numbers for national level figures, (just under 455,000 households actively renting) we can expect salaries to be $32mil to $42.7mil in order for the taxpayer to bear the cost of such inspections. I don’t think that’s unreasonable, especially as it’s likely that actual costs would be lower, especially if legislation normalises longer lease terms and after the initial inspections, the average number of times a year we have to inspect a rental property drops to say, .5 or .6, which would then more than halve the cost of inspections annually over the long term. (and hell, you might be able to get by with spot inspections unless the tenant requests one if landlords get their act together)

            • Matthew Whitehead 3.1.1.2.3.1

              Oh, and you’d need about 800 people (778 frontline staff) to do those inspections in one year. If you have a three-year timeline, you could do it with about 260 people nationally. I don’t know the number of assessors that EQC used during the 2011-2012 push to assess properties unfortunately, but I do know they were back down to less than 30 frontline assessors by the time I left. I imagine they probably had hundreds of assessors during that push as a lot of their equipment was handed over as the claims administration team expanded to deal with all the assessment data.

              Finding 260 people nationally to do a three-year assessment push and making sure they’re qualified isn’t unreasonable, especially given that unlike the situation with EQC, we’d know in advance when they would be needed rather than having pressure on an agency to expand their overall staffing levels by a factor of 50 within a year.

          • One Anonymous Bloke 3.1.1.2.4

            Where is that money going to come from?

            The numbers really are quite prohibitive.

            How about, off the top of my head:

            1. Not bribing Saudi royalty.

            2. Not spending taxpayers’ money to do Jason Ede type jobs.

            3. Not stunting the economy and thereby bringing in more revenue, as history demonstrates.

            4. Raising the top tax rate.

            5. Financial transaction tax, CGT.

        • Psycho Milt 3.1.1.3

          Landlords can pay.

          The passing the cost on thing is the real sticking point.

          Well, yes. The landlord isn’t running a charity – costs like rates, insurance and maintenance are covered by the rent. If the government imposes an additional cost, that cost will be included in the costs covered by the rent. That’s pretty much what rent is. Demanding that landlords not include WoF costs in their rents is like demanding car manufacturers not include the cost of airbags in their vehicle prices – both difficult and pointless to enforce.

          • weka 3.1.1.3.1

            the Greens said that the Dunedin study suggested that most landlords didn’t see a need to increase rents.

            The fee is $200-$300 per inspection. That’s $100/yr. I can’t see landlords putting up rents on the basis of that and the tenancy protection legislation should offer more protection too.

            Outgoings fluctuate but don’t automatically require and increase in income.

            • Psycho Milt 3.1.1.3.1.1

              Sure, no-one’s going to increase the rent to cover a $100 annual cost. However, the next time the rent is increased, you bet it will be increased sufficiently to cover WoF costs, including any higher maintenance costs that arise from having to meet the WoF requirements. There is no “landlords can pay” with this, any more than there is for rates or any other costs involved with the property. The tenant always pays in the long run.

            • Lanthanide 3.1.1.3.1.2

              Except it’s only $100/year assuming no maintenance is needed as a result of the WOF.

              The whole point of the WOF is to find and identify the houses that need significant maintenance.

              Rent for those houses will go up when the maintenance is done, to cover the costs.

              I’m sure there are a lot of houses that will come off the rental market because the landlords can’t be bothered or can’t afford to make the changes. A fair number of them will be sold to owner-occupiers, but others will be sold to more wealthy investors who will take the time and effort to meet the requirements – and increase their rent to cover the costs.

              • maninthemiddle

                I am a landlord, with three rental properties. I have no problem with a WoF, because in my view I am offering a product/service to the market where I should take repsonsibility for the quality of the product/service I supply. Not only that, it makes good business sense. If I insulate my homes, make them warm, ensure maintenance is kept up to date, I protect the value of my investment, (hopefully) attract a better quality tenant, and ultimately earn a higher return on my investment. I currently voluntarily have my properties inspected every 3 months by a property manager, who advises on any work that needs doing.

                • Lanthanide

                  I am also a landlord and like I said above, I support the policy, I just have concerns over who will do the work. Matthew Whitehead gave a pretty comprehensive answer to this above that has largely allayed my concerns.

                  Other concerns about rent hikes remain, though.

                  • maninthemiddle

                    I agree with Matthew, the costs would be negligible. However it all adds up. My view is the market sets most of the rental anyway. Owning rental properties has never been a ‘cost +’ exercise, in my experience anyway.

                • b waghorn

                  Most of what you say is cool , but every three months? i’m not sure if that’s stalking or bullying your tenants or a bit of both.

                  • Lanthanide

                    It’s the industry standard.

                    Landlord insurance policies all *require* 3 monthly inspections if you want to be covered by them.

                    Legally you can do them much more frequently than that.

                  • maninthemiddle

                    Most landlords who have their property managed have an inspection every 3 months. It’s quite normal. And frankly with some tenants, essential. I have had tenants trash a house in a week, let alone three months. Most are great, a minority are not. For example, I recently had a tenant (who had been renting my property for 3 years) suddenly, an without warning, break the tenancy agreement and adopted 2 dogs, who proceeded to take a considerable amount of the surface off a polished wooden floor, and defacate throughout the house. Needless to say the tenant was informed by the property manager that the dogs went or he went.

                • Andre

                  Out of curiosity, how would you describe how you set your rents? Cost plus? What the market will bear? Other?

                  • maninthemiddle

                    Market. If I have a long term tenant of good quality, I generally set them around 10-15% below market.

              • weka

                What’s ‘a lot’ in that context?

                • Lanthanide

                  Enough to materially constrain supply of rental properties. Certainly it’ll reduce the supply of cheap rentals (they won’t cease to exist, they’ll become owner-occupied, or will be repaired, driving rent up).

      • b waghorn 3.1.2

        How do you have a standardised test for houses that range in age from 120 years old to brand new.

        • Lanthanide 3.1.2.1

          Yip, you’ll have to have some way of allowing re-assessment.

        • Brigid 3.1.2.2

          Why shouldn’t there be a standardised test. WOF tests are standardised independant of the age of the car. I’m assuming you believe a 120 year old house shouldn’t have to meet the same criteria as a 20 year old house. If a house is not fit to live in it’s not fit to live in. End.

          • Andre 3.1.2.2.1

            Ahh, no. There’s all kinds of things that are acceptable in older cars that would instantly fail in a newer car. No seatbelts in back seats, no turn signals, door latch mechanisms, no wing mirrors… Older cars pretty much just have to meet the standards of the time they were built, not modern standards.

            • weka 3.1.2.2.1.1

              “by local councils will check rental properties to ensure they are safe, warm and weather-tight. This will include: surfaces being clear of mould, decent ventilation, a functional toilet, properly connected drains, safe electrical wiring, floor and ceiling insulation, proper heaters, and no cracks or holes in the building fabric.”

              I guess it will come down to how they define those, but on the face of it is there anything there that most old houses can’t meet? I reckon it’ll be the cheapo houses built in more recent decades that will struggle, or any house that is seriously substandard, but that’s the point, those houses shouldn’t be rentals.

              • Andre

                There’s all kinds of reasons why WOFs for cars isn’t a good analogy for WOFs for rental houses.

                The requirement that looks the hardest to me for old houses to meet is “warm”. An old weatherboard house with poorly fitting floorboards will be a big job to upgrade to modern standards. Trying to stop winter draughts is a mission, and if you successfully insulate the walls you could create moisture traps leading to mould and rot.

                Personally, I mostly fall on the side of substandard houses should be brought up to standard before being rented out, but I reckon there is some merit to the argument that will lead to some houses simply being taken out of the rental market leading to more rent increases and difficulty finding rentals.

                • weka

                  I don’t think wall insulation will be part of the wof. Floor and ceiling insulation, a decent wood burner, and an intact exterior is a reasonable standard even in a place like Dunedin.

                  It’s part of a broader range of policies that include increasing the number of houses in NZ (HNZ and private) so theoretical a few landlords having to sell shouldn’t have to affect the rental market badly.

                  • Lanthanide

                    Putting in roof and floor insulation and doing nothing about air infiltration (on average the worst/oldest houses completely change their air 6 times every hour – every 10 minutes!) will do little to keep the house warm, other than tick some boxes on a WOF chart that they have been done, but will still add lots of cost, which will be borne by the tenant.

                  • The Chairman

                    As it’s part of a broader range of policies that include increasing the number of houses in NZ, implementation (of a housing WOF) should be deferred until that goal is achieved.

                    This will help mitigate the scope of passing costs on.

              • b waghorn

                ”or any house that is seriously substandard, but that’s the point, those houses shouldn’t be rentals.”

                And if the slum landlords decide to sell their substandard houses , they are a great rung on the property ladder for young people who are willing to crawl around putting in pink bats and scrimping and saving to fix dodgy bathrooms etc.

                • Lanthanide

                  And other landlords looking for a bargain to do up, and pass the increased rent on to the tenants.

      • save nz 3.1.3

        They lost me when they mentioned the councils doing it…

        But one thing to remember about WOF was that 70% of houses actually failed it in the trial. So there is going to be a big problem, it went beyond being warm and dry into some sort of nightmare bureaucracy of railings and steps and so forth. Many NZ homes date from the 1900’s to 1950’s (then we seemed to have stopped building houses until the 1980’s and 1990’s when they leaked).. so the building criteria was completely different then, it seems that most Kiwi housing stock do not seem to be habitable houses under the WOF criteria..

        Just pointing out an obvious issue here, if it’s going to take 50,000 to bring a rental up to standard, the landlord will probably decide to sell it once it is renovated…

        Like the war on P, in state houses, there are now less state houses… and now people are not so convinced the P in there is even real.

        • weka 3.1.3.1

          I’ll chase up the study details later but given it was done in Dunedin I’d guess a large number of fails were on insulation.

          And heating.

          I seem to remember some if the wof criteria were things like being able to secure the property.

          Just because a large number failed it doesn’t mean that they failed on expensive or difficult things.

          If a landlord needs to sell a property to get the maintenance money back then they shouldn’t be investing in rentals. They would have 2 years to sort it out at the start. It looks to me like part of this is to push the investment culture in a different direction.

          • Lanthanide 3.1.3.1.1

            The biggest incidence of failures were actually handrails, as save nz says, and windows lacking security stays.

            IMO the security stays was a silly thing to include, as most owner occupied houses wouldn’t have it either.

            Should they? Yes.

            “If a landlord needs to sell a property to get the maintenance money back then they shouldn’t be investing in rentals.”

            The point is, they buy a cheap house, and get a positive cashflow return from it, and also some capital gain.

            If they’re then required to put in $50k of capital outlay, that’s a pretty large hit. Sure, they could hold the house for another 10 years and recoup that with higher rents over the period (and they’d have to be higher – hence the core problem of the Green’s bill for tenants), or they can sell the house now, recoup the $50k in maintenance and cash out on the capital gain. A lot of people would go for that option, and I don’t think it’s fair to say those people “shouldn’t be investing in rentals”.

            The bank might be happy to loan the $50k required for maintenance (maintenance is explicitly excluded from the 60% LVR rule), but the owner may not like having a mortgage like that.

            If they’d received a failed WOF and in 3 months time can no longer collect rent, then their choice is really to do it up themselves, or to sell it in a distressed position, as any investor buying it would be forced to do the maintenance themselves. So doing the upgrade and then selling it is a reasonable alternative, if “selling” is the other likely outcome anyway.

        • Yeah as Weka said, it’s worth also noting the mean and median cost for rectifying a failure. If it’s just installing a heat source or patching the occassional hole, that’s just a couple hundred bucks and your property is back in the game, no big deal.

          Insulation is probably more expensive sure, but there are programs that make it a lot cheaper already, it’s just landlords don’t want to bother with the capital expenditure even if it increases the rent they get, so requiring wall insulation would definitely make compliance expensive for houses that fail, but requiring ceiling and underfloor insulation is very reasonable as mostly it can be done so long as those areas are accessible.

          If houses were failing due to no railings on internal stair cases, perhaps that’s a failure of how the particular WOF is written. If we want inspections against a rental WOF I think it is important that we stick to general bottom lines that are reasonable for the first draft, and raise the bar if those reasonable minimums don’t lift housing quality enough for the rental market.

          • weka 3.1.3.2.1

            Good point about lifting the bar. I think the Greens’ policy sets minimum standards and utilises a star rating system beyond that (that is already being used in Dunedin). It looks like it’s about enouraging change in the culture as well as getting immediate benefits for tenants.

            • Matthew Whitehead 3.1.3.2.1.1

              Yeah, plus also starting with a modest list of minimum standards to rent means that good landlords are more likely to be able to stay in the business if they would struggle to meet a larger capital expense to continue renting the property, wheras bad landlords are more likely to spit the dummy and just flip their investment property immediately at any obstacle, meaning the people who want out of the rental market can pick up the properties of the bad landlords, wheras the ones who want or need to stay renting can continue on with those who were already good or the ones willing to up their game.

              If there’s less urgent things that need to make a WOF, they can be amended in near the end of Term 1 or the beginning of Term 2 of a new government, so that people have had time to get some more rent income and be ready for the less urgent improvements. (Or better yet, allow things to be added to the list without changing the legislation by the relevant ministry, but still list the minimums in the legislation so that it can’t be undermined by a future government without a law change)

              The five-star system (where presumably your minimum standards are star 1) is a good idea, too if you’re aiming to change culture, as it gives a marketing reward to landlords and agents who already do a good job, and an incentive for people to take easy steps that would bump them up the scale, especially if the criteria for gaining and losing stars are publicly available. It’s got to be a lot easier to advertise a property with an independent five-star rating than it is to advertise a good property in the rest of the country.

              • RedLogix

                As a landlord I’d love a reliable rating system like this. At the moment the about only things that determine market rents are, in order of importance:

                1. Location

                2. Number of bedrooms

                3. Off street parking

                There is very little commercial incentive for a landlord to install heating, insulation and other upgrades because all of these things … while they are a real and valuable benefit to the tenant … return little or nothing to the landlord who has to fund them.

                For instance when we were building 12 years ago we installed good double-glazing and extra insulation even though at the time it was a significant expense. Various people said we were mad, and from a strict commercial logic we probably were at the time. It’s taken a good deal longer than I’d hoped for the business to start breaking even.

                A warm, comfortable unit that is clean, attractive and well maintained will likely have a better occupancy rate, but not necessarily a better rent compared to others in the area.

                A reliable WoF or Star system that actually made a difference to rents based on quality could well make a real difference to these incentives.

    • DH 3.2

      The WOF is just more middle class madness. We’ve got people living on the streets, in garages and cars, and these people want WOFs for rental properties?

      There’s already far too much regulation by control freaks, this is yet another badly thought out scheme that will lead to unintended consequences.

      • AmaKiwi 3.2.1

        I kicked off this WOF conversation Thursday evening. I’m grateful so many of you are as concerned as I am. Yes, there are many details to work out.

        But please keep your eye on the prize. Every child needs a safe home.

  4. One Anonymous Bloke 4

    Squatters’ rights. It’s obvious Parliament isn’t going to do the right thing. Personally I think squatters should invoke article 25 of the UDoHR, and appeal to the Supreme Court to end this country’s ongoing human rights abuses.

    Then perhaps some gentle rioting in Remmers just to burn the point home.

  5. NZJester 5

    While there are a lot of shonky tenants out there, you will find even more shonky landlords.

    • RedLogix 5.1

      A numeric comparison is pretty fraught. A bad tenant can only wreck one unit at a time; but over time can cause havoc to multiple landlords. Equally one bad landlord with multiple units can cause harm to a lot of tenants at the same time.

      From our experience running 8 units (built at various stages over the past 14 years) we’ve accommodated about 40 tenants, of whom 4 have caused major problems. I’d be curious as to what portion of landlords fall short of the mark in your experience.

      • Keep in mind also that some landlords go through an agency to rent the property. Those agencies are a lot more aggressive about things like letting fees etc… and will often have dozens or hundreds of rental properties in their portfolio, so it doesn’t even have to be 10% of landlords being bad to even up the odds, you just need a few agencies to be bad and the landlords not to notice, and suddenly a large amount of renters are having a bad experience.

  6. Neil 6

    Under Key, the national party & their supporters, the less fortunate in life do not have the right to warm dry housing or anything else

  7. Muttonbird 7

    Families who rent often find themselves pushed around from house to house, and their kids moved from school to school, unable to settle down.

    The rental market is the other side of the housing crisis that affects hundreds of thousands of New Zealanders.

    In many other countries, particularly in Europe, long-term tenancies in quality, warm homes are the norm.

    Although it is good that someone at least recognises the issues facing renting families, the security of tenure issue will not be addressed by this bill.

    High numbers of amateur landlords, untaxed speculation, and the high rates of turnover encouraged by rapid price rises are doing untold damage to communities and will affect generations to come.

    Until housing is managed properly in this country an increasing number of ordinary kiwi families will continue to live in fear of the 90 day letter.

    • Sabine 7.1

      the fear is the 14 day letter,m 90 days is a pure luxury.

    • weka 7.2

      What would you suggest is done?

      • miravox 7.2.1

        “What would you suggest is done?”

        I think even The Greens have stepped away from this one, possibly due to the outrage it would generate from [potential] investors in housing. I definitely can’t see all those property investing MPs in other parties supporting restrictions to termination of tenancies by landlords.

        Euro example – Tenant-friendly legislation is a given in Austria and in case of termination of tenancy, the Landlord can only terminate by extraordinary notice – the place becomes uninhabitable, non-payment of rent or the misuse of property (criminal activity, damage). The tenant can challenge the notice and mediation services are available.

        • RedLogix 7.2.1.1

          Real property investors rarely evict tenants who are not causing problems. The reason is simple … far better to keep an existing tenant who is absolutely known to pay the rent reliably and look after the unit, than run the risk of a new unknown tenant, who comes with a 10% chance of costing a great deal more than you might gain.

          The losses from just one bad tenant can easily run into many thousands of dollars. Any experienced landlord wants to minimise this risk.

          Of course there is a downside to fixed term leases. Here in Australia it is normal to have to sign up to a 12 month term. If you have to leave the unit for any reason, you are still liable for the balance of the rent for that 12 months.

          If you want tenants to have security of tenure (and I’m all for this), this has to be balanced by giving the landlord security of income. You really can’t have it both ways.

          • weka 7.2.1.1.1

            Allow subletting or transfer of tenancy.

            • Chuck 7.2.1.1.1.1

              “Allow subletting or transfer of tenancy.”

              Is a option…but would need to include sign off by the landlord on the new tenant. And possibly the original tenant would also need to underwrite the remaining rental payments re – original term.

              Fixed terms are a great idea, and are becoming more common in NZ (12 month terms).

          • miravox 7.2.1.1.2

            “Real property investors rarely evict tenants who are not causing problems”

            Real property investors shouldn’t have a problem with restrictions on giving notice. It’s the others out to make a quick $$ that this would mainly affect – and there are far too many of them in NZ. That 12 month tenure liability you mention is in NZ too, but I don’t really see how that is relevant to whether a landlord can terminate a tenancy with a few weeks notice, or not. Austria also has short-term leases these days, although they are not common (when you have no plans to buy a home why would you want to have a 6-month lease?) so the longer leases, i’d suggest, generally suit the tenant and the property owner.

            Without a doubt, Austrian rental laws are pro-tenant and yes, they really do have it both ways. The historical context of housing is a major influence in the way housing is provided, especially in Vienna. I do realise that this is not the NZ experience and a paradigm shift in the concept of housing would have to occur for this system to be take hold in NZ. The Green Party bill is only a good start. As they note, there are things that can be learned from the European experience and, if there is the will, incorporated into NZ regulatory environment.

            Notice of termination is one of these things. It is important that NZ makes changes to current practice. As Muttonbird stated above

            High numbers of amateur landlords, untaxed speculation, and the high rates of turnover encouraged by rapid price rises are doing untold damage to communities and will affect generations to come.

            Until housing is managed properly in this country an increasing number of ordinary kiwi families will continue to live in fear of the 90 day letter

            I understand your point about property damage – as do the Austrians, hence the extraordinary notice provision. Undoubtedly there are fewer investors in property, but the ones that are are ‘real’. Given exceptions for such things as property damage, misuse of property and unpaid rent, and maybe with a clause for early end of lease by the tenant, I can’t really see legitimate reasons for responsible, professional landlords to have major (irritations – yes) concerns about restricting the grounds for termination of leases. It is certainly something that needs to be improved for people to be able to envisage their rental as a home.

            • RedLogix 7.2.1.1.2.1

              Largely agree. We’ve always tried to encourage tenants to see the house as their home. And while the average tenancy is about 18 months, some have stayed with us for years and we hope they’ll stay as long as they wish.

              Austria also has short-term leases these days, although they are not common (when you have no plans to buy a home why would you want to have a 6-month lease?)

              There are all sorts of reasons why someone does not want, or cannot buy a house. For many people their life is not stable enough to warrant it. They don’t have a partner they want to settle down with, they plan to travel, they’re still on probation at work, or it’s a short-term contract/course that will come to an end.

              One tenant we have at present is a retired couple who sold their house to provide the deposit for their children to buy a suitable home. Another owned property in the USA and lost it all in the 2009 GFC.

              My point is that renting comes with a flexibility that owning does not have, and this is actually quite valuable to many tenants.

              The really big problem in this area is not professional landlords running a genuine rental business, but the speculators or amateurs who are only in it to flick the property for capital gain or some other personal reason.

              • miravox

                “There are all sorts of reasons why someone does not want, or cannot buy a house… My point is that renting comes with a flexibility that owning does not have, and this is actually quite valuable to many tenant”

                Agree. Housing tenure is integral to how a society operates. This is part of what I was getting at when I wrote there would need to be a paradigm shift for the full-on Viennese version of housing tenure to work in NZ, and I’m not seeing that happen anytime soon.

                People here are stunned when the find out how NZers move around – the flexibility we are talking about is insecurity here (generalising, of course). That is why longer rentals are preferred. Note as well that there is massive, ongoing state investment in housing, which changes the framework for managing the needs of people who are at risk on insecure housing quite dramatically.

                “The really big problem in this area is not professional landlords running a genuine rental business, but the speculators or amateurs who are only in it to flick the property for capital gain or some other personal reason.”

                Yeah, it’s not a business to be taken on without commitment. Part of the reason I’m for a capital gains tax – get those with money but no commitment to look elsewhere for their profit, or else start taking the whole venture seriously.

        • weka 7.2.1.2

          Miravox, how does that work fit families that rent out their home for a few years and then need to move back?

          • miravox 7.2.1.2.1

            The length of lease is usually three or five years. but there are also 6-month leases (holiday lets and contract workers, usually).

            The tenants can have a 12-month roll-over clause after the first year and I imagine there could be some negotiation around that. Otherwise, if the family renting out their home came back early, I guess they would have to take a 6-month rollover lease until the agreement on their own property ends. Interestingly, if it was the tenant who was away for a few years, they could sublet the property for that period. Security of tenure is a pretty basic right. Ownership seems to be a privilege by comparison and land-lording is not setup for the hobbyists (just my observation).

  8. millsy 8

    Should be automatic first right of refusal to a tenant if the landlord wishes to sell IMO. Obviously you cannot do that for every rental property, such as flats, etc, but it would give a tenant a fighting chance.

    Also limiting the amount a rent a landlord can increase would be an idea as well. Perhaps inflation plus 2%, with exemptions available for special circumstances.

  9. miravox 9

    What will MPs accept in terms of increased rights for tenants? I wonder if the Green Party bill has been written in consideration of MP property ownership

    http://www.stuff.co.nz/national/politics/78875326/Our-121-MPs-have-interests-in-295-properties-between-them

    National’s 60 MPs have a stake in about three properties each on average, Labour about 2 properties per MP, the Greens 1.7 and NZ First 2.3.

    Of the remaining four MPs, Peter Dunne has two, David Seymour none and the two Maori party MPs one apiece.

    …Of the 121 MPs, only 11 declared no interests in property. They were: Darroch Ball, David Cunliffe, David Seymour, Louise Upston, James Shaw, Kris Faafoi, Marama Davidson, Paul Foster-Bell, Peeni Henare, Ria Bond, Todd Barclay.

    Obviously not of of these owners are landlords (the PM, for example keeps his three homes for himself), however this bill may have implications for quite a few MPs. I’m keen to see how they vote.

  10. What about the land lords rights?
    We rent out a couple of bedsits at about $30.00 per week less than the going rate, The current tenants are great, but over the years we have had some real scumbags, because we give a mug an even break we have been ripped off many times, not only thousands in rent, but even food from our kitchen, money from our egg sales/honesty box, one guy even ripped off some stuff, couldn’t sell it so bought it back and said if we didn’t forgive him, we would feel the wrath of god …. (and I had just given that guy a months free accommodation, cause he was sleeping in his car)
    One guy not only owed 6 weeks rent, but he stole all the lightbulbs, (his mother was a victims support officer) another moved in with his welfare check, then stole petrol, smashed holes in the wall, and left maybe 2 months later without paying any more rent. We have had several people move in with backing from the govt, only to not pay anything else. If you let them get a week or so behind in rent, that’s it, they stop answering their phones and just fuck you around.
    So yeah if you want to get a feeling of how scummy people are, and why I see zero hope for the future, become a ‘nice’ landlord, and get crapped on.
    Lets face it people are arsholes.
    But I’m not surprised
    The Spirit in the Gene: Humanity’s Proud Illusion and the Laws of Nature

    «As for pointing to our mental failures with scorn or dismay, we might as well profess disappointment with the mechanics of gravity or the laws of thermodynamics. In other words, the degree of disillusionment we feel in response to any particular human behaviour is the precise measure of our ignorance of its evolutionary and genetic origins.»

    – Reg Morrison

    • weka 10.1

      I’m pretty sure there are laws in place around all those things already. As the GP press release states, NZ is one of the countries whose tenancy laws support tenants the least Tenants. Landlords already have pretty decent redress as far as I can see.

      I do think that if someone can’t manage the landlord/tenant relationship without being an arsehole or without being ripped off then one probably isn’t suited to being a landlord. We have this idea in NZ that there are free and easy ways of making money, but being a landlord takes skill. Red has told similar stories of being a decent landlord and getting ripped off as well, but I still think this is about the choices one makes at the income/investment level and it’s not on the same scale as the Human Right to have decent housing (which is what this thread is about).

      I’m also noting the attitude about welfare in your comment. I don’t see what the source of the renter’s income has to do with anything unless you are trying to equate being on welfare with being ‘scum’.

      • RedLogix 10.1.1

        We’ve had pretty much the same issues with some of our tenants that Robert describes.

        Landlords already have pretty decent redress as far as I can see.

        Maybe on paper. In practise you cut your losses and walk away.

        But yes I absolutely agree, in the end we’ve made our investment/income choices and we do our best to make it work without shitting on our clients. While some have indeed been scumbags (and one in particular caused us a LOT of heartache) the huge majority are a pleasure to know and look after their units better than even we would. That’s what keeps us going and makes it worthwhile.

        I think you hit the nail on the head when you say that too many people think being a landlord is easy money. In fact if you read any of the industry association magazines they emphasise the exact opposite. Every issue will have an article telling to either get skilled up to do a proper job of it, or hand it over to a competent agency who can do it for a price.

      • Psycho Milt 10.1.2

        Landlords already have pretty decent redress as far as I can see.

        Maybe on paper, as RL says. So far we’ve only had one that just wouldn’t pay rent, but we’ve given up on ever seeing that money. The legal system could help us recover it, but the expense, time and effort required isn’t worth it – which is what such people rely on, I presume. Same with friends of ours who found the nice young woman who rented from them with her parents as referees was a front for local petty crims – cost them a hell of a lot in lost rent and repairs to the house for that one, but none of the costs were ever recovered from the tenants.

        • weka 10.1.2.1

          How much rent are you talking about, and why is there such a big amount? If someone stops paying rent why do you not begin proceedings immediately?

          • Lanthanide 10.1.2.1.1

            “If someone stops paying rent why do you not begin proceedings immediately?”

            Because the law requires rent to be 21 days in arrears before you can begin eviction proceedings.

            If someone is 20 days in arrears, and they pay even a small amount of their rent, then the 21 days starts again.

          • Psycho Milt 10.1.2.1.2

            I’m not a professional landlord (didn’t want to be one at all, but relationships always involve compromises). Didn’t notice the non-payments for weeks, then allowed the tenant to bullshit us for weeks, then the eviction notice period on top. I think we were out about a thousand, plus the lost rent while we found a replacement who was actually willing to pay for accommodation. Of course, if we had given her an eviction notice the moment she was three weeks behind, we would have lost a much smaller amount, but it would then be even less worth the hassle of trying to recover the loss. As RL says, you cut your losses and walk away.

      • Lanthanide 10.1.3

        I had a tenant evicted after his marriage broke up and he left. He was behind 6 weeks rent. Bond was 4 weeks, so I got to keep all of that.

        Apparently he was referred to debt collection. I was surprised to receive something like $13 in the middle of last year, apparently he had made a payment. From a tenancy that ended 3 years ago.

        Rest of the money is gone, and there’s no hope of me seeing it. I’ve written it off. The worst this tenant did was leave behind a flea infestation in the carpet from his dog (that the next tenants discovered and I had to pay for – and this is why lots of landlords don’t allow animals) and a bunch of rubbish that had to be disposed of. Far from the horror stories of Robert and Red, but this idea that “landlords already have recourse” just doesn’t reflect reality.

        You can’t get blood out of a stone. In many cases even if the tenant could eventually pay, the stress and hassle simply costs more than the return. So you take your loss on the chin and don’t take a risk on your next tenant.

  11. Brian 11

    About bloody time. Unless you own ( or the bank does) there is nothing in the way of security.

  12. roy cartland 12

    Basic decency made law.

    I’m a ‘landlord’ – that is, I have to rent out a floor in my house to enable me to pay my crippling mortgage. The property exceeds all the proposed housing WOF requirements, a 90-day notice period for the tenant, 3 weeks notice to me, free wifi and I regularly make sure everything is up to scratch and fix it if not.

    I repeat: this is basic decency – these aren’t the standards of a ‘good’ landlord, this is the bare minimum. If property owners don’t meet these, they should be forced to.

  13. Leftie 13

    Another great initiative from the Greens. Add it to the growing arsenal of polices from the opposition that’s showing itself as being a good, solid alternative to the corrupt, uncaring, and amoral National government.

  14. illuminatedtiger 14

    Preventing rent increases more often than once every 12 months for periodic and fixed-term tenancies.

    Perhaps NZ should be emulating the Japanese model, the rent cannot change for the duration of the tenancy which is typically 24 months (and at the same time is periodical – the tenant can choose to leave at anytime for a months rent). Even better is that you don’t have to open your place up for landlord inspections, something that throughout my renting in NZ occurred on a fairly regular basis.

    • RedLogix 14.1

      Yes but a quick google suggests a far more mature market that strictly vets tenants character and ability to pay:

      https://blog.gaijinpot.com/rent-an-apartment-in-japan/

      And virtually all tenancies are managed via an agency and up to six months rent may be payable in advance via a number of different fees:

      Not at last, entering a rental contract with a conventional real estate company is very expensive. A number of refundable and non refundable fees have to be paid, often totaling three to ten months’ rent, depending on the company and apartment:

      Reservation fee (tetsukekin)
      The tetsukekin is paid when you apply for an apartment, and before the actual rental contract is signed. It serves as a guarantee for you that the apartment is not given to somebody else, and for the agent that you do not change your mind. It is refunded after the actual contract is signed and is usually equivalent to about one month’s rent.

      Deposit (shikikin)
      The deposit is used to cover eventual future damage to the apartment. The deposit minus the cost for repairs is refunded when you move out. The deposit is usually equivalent to several months’ rent.

      Key money (reikin)
      This is a non refundable payment to the landlord in the amount of up to several months’ rent.

      Service fee (chukai tesuryo)
      This is a non refundable payment to the real estate agent in the amount of at most one month’s rent.

      http://www.japan-guide.com/e/e2200.html
      http://www.wikihow.com/Find-an-Apartment-in-Japan

      Your guarantor will be liable if you fall behind in rent:

      http://www.japantimes.co.jp/community/2013/04/23/issues/renter-guarantor-system-a-headache-for-foreigners/#.V68Pzph96Uk

      And from what I can read it seems the usual arrangement only allows you to terminate the usual 24 month contract with no penalty after 12 months.

      All in all a VERY different system and culture to NZ’s very lightly regulated and immature one. Even moving to Australia it was obvious how almost all tenancies are handled by a professional agent, and any deviation from the rules, rent payment, problematic behaviour or the like is very quickly dealt with.

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