I admit I still use Facebook, but only to keep in touch with family and friends overseas. I do, however, subscribe to a Lower Hutt Community page, mainly for local information, particularly if there has been an earthquake, or there is bad weather. However, I have been surprised to see some threads on this community page about tenants being given 90 days notice recently, and it seems that there are a fair few of them.
Why, you might ask? Well, the latest round of tenancy laws came into effect on 11th February 2021, although they had been signalled about 18 months out. The main changes are:
- Rent can only be increased once every 12 months
- Tenants can make minor changes to the property
- Rental bidding is now illegal
- Fixed-term tenancies will convert to periodic tenancies (with some provisos)
- Landlords will not be able to end a periodic tenancy without cause by providing 90 days’ notice. New termination grounds are available to landlords under a periodic tenancy and the required notice periods will change.
- All requests to assign a tenancy must be considered. Landlords cannot decline unreasonably. If a residential tenancy agreement prohibits assignment, it is of no effect. This one has been softened slightly, as previously, it was proposed that tenants could always assign a lease, and that landlords could not object. Case law will eventually teach us the definition of ‘unreasonably’ in such cases, as it will also teach us what ‘minor changes’ to the property consist of.
All in all, the new rules mean that landlords have progressively less and less control over the properties that they own, significantly increasing the tenant risk as a result.
Landlords are reacting appropriately, with a large number of tenants being given 90 days notice before the new rules came into effect. If the Lower Hutt Community Page is anything to go by, there are a fair number of tenants who have been given notice, some who have lived in the same property for a number of years, hitherto without a problem.
Landlords seem mostly concerned that they will not be able to get rid of problem tenants. The list of reasons that a landlord can give for evicting a tenant has reduced considerably, meaning that the landlord takes all the risk. Some landlords have simply said that they will keep their properties empty. In a dwindling rental market, this is a catastrophe, but it is one that the government should have foreseen.
They didn’t, of course.
Last night, I heard of another case – this time it is people that we know. They have always rented, and were given 90 days notice in January. They are fortunate that they have managed to secure another rental, due to friends moving out of a rental because they have been renovating a home that is now finished. They were lucky. Many people are not so fortunate.
Some landlords will sell up. Yes, some will say that this will mean that current renters will move onto the property ladder but these things are not finite. There are nowhere near enough houses available for the buyers that want them, so those properties that are made available for sale will be snapped up. This will still mean that there are buyers who miss out, while there are a lot of renters who will miss out too.
Somehow, it seems that everything that this government touches turns to dust. By the end of the current parliamentary term, the homelessness problem will be bigger than it already is, there will be a few more social houses, but nowhere near enough to meet the demand and private rentals will be a rarity. In fact, my prediction is that most private landlords will rent only to family members, so there will be virtually no private houses available.
By this time, we could be looking at serious social unrest, because if a significant number of people have nowhere to live, they will react accordingly, and we know that this may not end well. Good one Jacinda. You will not be able to rest on your COVID laurels by then.
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