Rental industry set to be shaken up by new Labour led-Government
A big-shake up to the residential rental industry is imminent under the newly-formed Labour led Government.
Within the first 100 days Prime Minister elect Jacinda Ardern, New Zealand First leader Winston Peters and co have a mountain of initiatives to tick off.
Labour will hit the ground running in Government, with a programme of work across housing, health, education, families, the environment and other priority areas.
As far as the rental industry is concerned, passing the Healthy Home Guarantees Bill, which will ensure that all rental properties will meet a minimum standard of insulation and heating, is top of the list.
This Bill is awaiting it’s Third Reading and should be passed into law by the end of the year.
The Residential Tenancies Act Amendment Bill, which is proposing changes to tenant liability, unlawful tenancies and methamphetamine, should also be passed into the law at some stage.
Only the Greens voted against National’s Bill in its First Reading and unless Labour and New Zealand First flip, these changes should come into effect.
However, with the Bill currently at the Select Committee stage, don’t be surprised if there are subtle changes before it’s Second Reading.
Scrapping Letting Fees
The biggest changes that Labour have proposed face a lengthier wait.
Labour’s rental policy include scrapping letting fees for tenants, extending notice periods to 90 days abolishing “no-cause” terminations and limiting rent increases to once a year.
All these changes, particularly the adoption of the Australian model for letting fees, where property managers bill the landlord for the cost of the finding a new tenant, will create a fair amount of disruption to the industry.
Tenancy consultant Scotney Williams believes these proposed changes reflect the current state of flux in the industry.
“Landlords and property managers will have to accommodate significant changes to their business model,” Williams said.
“With the new Government promising to abolish the requirement for tenants to pay letting fees, property management firms will have charge their owner clients a fee to replace the abolished letting fee formerly paid by tenants or suffer reduced income.
“Property managers and landlords will also find terminating periodic tenancies much harder with the removal of the “no cause terminations, involving the use of the 90 day Notice”.
Labour’s rental policy isn’t a priority in their first 100 days in office.
But that doesn’t mean it won’t happen and there is a possibility that the Greens’ initiative of a compulsory Rental WOF could be added to the mix.
A lot will depend on New Zealand First.
– Report by Chris Matthews