The Coalition Government’s plan to improve tenancy laws took another step forward in May, with the Residential Tenancies Amendment Bill (Bill) passing its first reading.
The Bill’s explanatory note points out that the demand for private rentals has continued to grow and exceeds supply, making it harder for households to find suitable accommodation and inevitably increasing rent prices. The most recent census data shows that between 2013 and 2018 the number of households renting increased by 16.5%, and that in 2018 those renting made up around 1 in 3 of New Zealand households (31.9%); with 84% of these renting in the private market.
Housing Minister Chris Bishop stated that the changes “will help increase the supply of rental properties by giving landlords the confidence to enter or re-enter the private rental market, and it will give people a better chance to secure a rental,” and that it would apply “downward pressure to rents”. Key changes proposed include:
- Reinstatement of 90-day no-cause terminations for periodic tenancies, meaning landlords could end a periodic tenancy without requiring a specific reason. Currently, landlords can end a periodic tenancy if they have a specific termination ground, e.g. carrying out extensive renovations on the property.
- Returning landlords’ notice periods for ending a periodic tenancy on specified grounds to 42 days. At present, notice periods are 63 days where the owner or a family member want to move in, or to house employees (and this is in tenancy agreement), and 90 days where the property is being sold and the owner is required to give the purchaser vacant possession.
- The notice period that a tenant may provide to the landlord to terminate a periodic tenancy would be returned from 28 days to 21 days.
The Bill also recognises that pet owners often struggle to find rentals where pets are allowed, and that in part, this is the result of landlords concerns around recovering costs from tenants where damage exceeds the bond. To incentivise landlords to accept pets, the Bill allows for the payment of a pet bond of up to two weeks rent.
The tenant would still need to obtain the landlord’s consent for pets, but the landlord could only withhold consent on reasonable grounds. The tenant would also be liable for damage caused by pets that is not fair wear and tear.
The Bill also adds some minor changes to improve the clarity of the law, including:
- clarifying that tenancy agreements prohibiting smoking inside a rental property are enforceable,
- facilitating the process for lodging tenancy bonds online,
- enabling the Tenancy Tribunal to make some decisions by reading the documents instead of having parties attend a hearing, and
- clarifying a tenant’s ability to withdraw from a tenancy, at short notice, if their child or dependent is subject to family violence.
The Social Services and Community Committee’s report is due back 21 Nov 2024. If passed, most of the changes would be expected to come into effect in early 2025, with the pet changes later in 2025.