Are Labour's Policies Better for Tenants?
Are Labour's policies better for tenants?
Although Labour haven't provided detail on how they will work, two of their policy announcements made yesterday could make things better for tenants. These two policies are allowing them to make minor alterations if they pay extra bond and giving landlords access to grants of up to $2000 for upgrading insulation and heating.
However other policies are likely to have unintended consequences or simply do not achieve the aims that Labour claim they will.
The most significant issue from yesterdays announcements was removing the 90 day notice to end a tenancy with no cause. "Labours policy does not provide the security of tenure for tenants that they claim" says NZPIF Executive Officer, Andrew King. "It actually protects poorly behaving tenants often at the expense of good tenants".
Under the Residential Tenancies Act, Landlords are required to protect neighbours and other tenants from the behaviour of their tenants'. The 90 day notice without cause is often the only tool we have to achieve this.
Common situations are antisocial behaviour by some tenants, such as loud and long parties, intimidation, aggression and bullying.
Neighbours and tenants on the receiving end of this behaviour fear reprisals so are usually unwilling to provide written details that the landlord needs to provide to the Tenancy Tribunal need as evidence. Tenants often prefer to move and get away from the problem.
The current 90 day notice without cause is the only tool available to protect the rights of these tenants from the antisocial behaviour of others.
This notice is not used often as it is risky having a disgruntled tenant in your property for up to three months. If it is ever used inappropriately, such as to remove a tenant asking for legitimate repairs to be undertaken on the property, then tenants can claim retaliatory action against the landlord and receive $4,000 in damages from them.
These latest policy announcements are additional to a suite of policy's that will detract from people providing rental homes for tenants. "These policies are sold as 'cracking down on speculators' but they are squarely aimed at the mostly ordinary New Zealand families providing rental accommodation to tenants and attempting to secure their retirement" says King.
The policies announced yesterday are additional to extending the Bright Line Test, and withdrawing the ability of rental property providers to claim legitimate tax deductions available to all other businesses. "This policy alone will add just over $4,000 a year to the cost of providing the average New Zealand home as a rental" says King.
"Renting the average NZ property is currently $218pw cheaper than owning it, without the requirement to save a $105,000 deposit. It costs the owner $6,180 a year to provide this average NZ property as a tenant's home, which will increase to $10,260 if tax changes are implemented".
This doesn't take into account the potential of a Capital Gains Tax being applied against businesses and investments including rental property.
"Families who are renting and parents with children as tenants need to ask politicians how the people who currently provide 86% of rental accommodation in New Zealand are likely to react to these multiple housing policies" says King.