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REINZ welcomes banning of rental bidding with RTA proposals

18 November 2019

The Real Estate Institute of New Zealand (REINZ) has broadly welcomed the proposed changes announced by Minister Faafoi yesterday as a step towards making the rental market fairer for tenants and making the Residential Tenancies Act more relevant to today’s market.

In particular, REINZ is very supportive on the calls to ban rental bidding as this has caused much distress for tenants in the past.

Bindi Norwell, Chief Executive at REINZ says: “For many years REINZ has strongly discouraged the practice of rental bidding by landlords and property managers, therefore, we welcome the proposed ban on rental bidding as this just drives up prices in an unfair and unethical manner for tenants.

“Additionally, we’re very supportive of the proposal to limit rent increases to once every 12 months. This will allow tenants and landlords to have more certainty and ensure everyone knows where they’re at in relation to their finances,” points out Norwell.

In relation to the making rental properties safer and more liveable, again this is something REINZ is supportive of.

“The difference between a house and a home is the ability for tenants to make changes to their rental property such as adding a dishwasher, washing machine or curtains. Of particular importance is the ability for tenants to make changes in relation to health and safety issues such as adding brackets to secure furniture against earthquake risk, baby proofing a property or adding visual fire alarms. Of previous concern was the ability to remediate the property to its original condition, however, it appears the Minister has heard our concerns around this and included it in the proposals which we are grateful for,” continues Norwell.

Like many in the industry, REINZ still has concerns around the changes to the 90-day notice.

“In the vast majority of circumstances, landlords use “no-cause” termination notices as a way of bringing a tenancy to an end for issues such as non-payment of rent or anti-social behaviour. Competent landlords always prefer to have a property tenanted, and would prefer to fix problems raised by tenants, so only use the 90-day notice as a last resort,” says Norwell.

“The proposed changes could incur huge administrative costs and the need for re-education and could lead to more landlords offering shorter tenancies or be deterred from leasing properties at all. Our preferred approach is to provide for higher exemplary damages to penalise landlords who abuse no-cause terminations,” she points out.

“Also, of concern is whether the Tenancy Tribunal will have the workforce to deal with the additional case load of cases that will now need to be seen by the tribunal. The current wait time for a Tribunal hearing is around six weeks, and our concern is that this could stretch out even longer, causing further damage to a landlord’s property in the meantime or further stress for neighbours having to deal with anti-social behaviour,” continues Norwell.

“It’s important to get the balance right between protecting the rights of tenants with the rights of landlords in order to look after both sides of the equation and we will look forward to engaging with the Government through the Select Committee process in relation to the proposed changes. We also look forward to hearing from the Government where it is at in terms of its thinking around the methamphetamine guidelines and also the proposals around pets which were originally included in the 2018 consultation period,” concludes Norwell.

ENDS

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