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Dr Muriel Newman

Dr Muriel Newman

Attacking Landlords


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While While most New Zealanders are extremely supportive of a Free Press, that support is based on the assumption that the media is balanced and acts independently of commercial and political interests. But some of the biased and over-zealous reporting that we have witnessed over recent times casts serious doubts about the media’s integrity. 

In fact, you could be forgiven for thinking that some are puppets of the Labour Party – especially if you have been following the emergence of timely news stories that seem designed to promote that party’s political agenda.

Before the last election, reports about homeless people and struggling families that were hugely critical of National, relentlessly hit the headlines. Day after day, we were confronted with stories designed to create the impression that the Government was failing this vulnerable group – a view consistent with that promoted by the Opposition.

Then, miraculously, as soon as the election was over and Jacinda Ardern became Prime Minister, those stories disappeared, even though the homeless people and struggling families had not gone away.

Now the Labour media machine is at it again – this time it’s been rental property providers who are in the spotlight. A plethora of ‘bad landlord’ stories backed up the government’s anti-landlord agenda and the release of a “discussion” document – see HERE – by the Minister of Housing Phil Twyford, that he says will make life easier for tenants.

Labour clearly sees the landlord-tenant relationship as a definitive political ‘battleground’. Anyone living in rental accommodation is regarded as a potential voter. Put simply, there is political capital to be made by demonising landlords and victimising renters. The problem is that the political argument that landlords are evil exploiters and that the law is failing tenants is built on lies.

Attacking landlords while in opposition is one thing, but attacking them while in government is simply foolish. The Government needs private sector landlords, since they provide housing for the vast majority of New Zealanders who don’t own their own home.

According to Statistics New Zealand, as at 30 June 2018, there were 1,870,000 privately owned houses in New Zealand. Around 1,170,000 are owner-occupied, 630,000 are used for rental housing, and 70,000 are provided free of charge to occupants by individuals, trusts, businesses or the government.

In addition there are 83,000 public housing units, with 63,000 owned or managed by Housing New Zealand, around 12,000 owned by local councils, and some 8,000 owned by other social housing providers.

So while the Government, through Housing New Zealand, provides accommodation to over 60,000 families, the vast majority of over 589,000 families rent their homes from private sector landlords.

The reality is that the Government should be applauding those New Zealanders who provide rental housing, not penalising them. The risk for the Government is that if they make the rules and regulations surrounding long term renting too onerous, there is every chance that property investors will sell up. This would leave the Government and social housing providers having to fund additional rental housing stock.

This week’s NZCPR Guest Commentator, Mike Butler, a long term property investor and NZCPR Research Associate, who has analysed the impact that the recent changes in the rental housing sector has had on landlords, agrees:

“The years of apparent punitive action may lead private landlords to conclude that investment in rental property is no longer profitable and that the Government is waging a war on them. The latest move may appear as the last straw, and they decide to sell and move on.”

Mike outlines the recent changes that have been imposed on rental property owners. They include the introduction in 2015 of a “bright-line” capital gains tax test for the sale of residential rental property. Shortly after taking office, Labour extended the taxable time frame from two to five years. 

Three separate amendments to the Residential Tenancies Act (RTA) have already been introduced over recent years. The first, in 2016, required smoke alarms to be fitted into rental homes, as well as ceiling and underfloor insulation. The second, which prohibits the use of ‘letting fees’ to cover the cost of letting a tenancy, and the third, which updates the laws relating to drug contamination, liability for damage caused by tenants, and renting out unsuitable premises, are still in front of Parliament.

Labour also passed the Healthy Homes Guarantee Act straight after becoming the Government. This shocking piece of legislation, which will introduce new minimum standards for private sector rental housing – for insulation, heating, ventilation, draught stopping, drainage, and moisture ingress – has become law without the details of the regulations being specified. With the new requirements scheduled to come into force on July 1, 2019, with compliance required by July 1, 2024, we would urge anyone concerned about the escalating cost of regulation for rental housing to review the proposals in the discussion paper HERE. Submissions must be sent to the Ministry of Business, Innovation and Employment (MBIE) by 22 October 2018.

So what are the new changes Labour is proposing to the RTA?

The Minister claims that New Zealand’s tenancy laws are ‘antiquated’ and do not work well for tenants. But through his one-eyed approach, he risks hurting the very people he claims he wants to help.

New Zealand’s rental housing market is governed by the RTA. It was passed in 1986 to establish the fundamental rules relating to residential tenancies and to set in place the Tenancy Tribunal to resolve disputes.

Statistics show that 90 percent of all applications made to the Tribunal are made by landlords, with three quarters of those for rent arrears. In other words, for every landlord failing to meet their obligations, there are nine tenants who are not meeting theirs. Perhaps the Minister needs to address problem tenants before he attacks landlords.

In fact, there are a number of things the Minister could do if he was really serious about improving the situation – including speeding up access to the Tenancy Tribunal, since at the present time it can take almost two months for a hearing date.

However, making life better for landlords, is not a focus for this Housing Minister. He has his sights set on making life better for tenants, even if in doing so he makes things worse for landlords.

A range of changes have been proposed in the discussion document including limiting rent increases to once a year (up from the current six months), banning rental bidding, beefing up the rights of tenants to challenge rents they consider are higher than market rents, and requiring landlords to show the formula they plan to use to calculate future rent increases.

These changes are likely to lead to higher rents. By limiting increases to once a year, more landlords are likely to raise rents on an annual basis – especially if a formula has to be included in the lease, whereas at present, if landlords have good tenants, many prefer to leave things as they are, rather than risk losing them through rent increases. 

In addition to outlining specific changes to the RTA, the discussion document raises issues like heating and ventilation. While regulations are already in place to improve insulation in rental housing, the reality is that some tenants do not heat their home because they can’t afford the electricity – or more accurately, they give less priority to heating costs than to other things. 

And thanks to successive governments pandering to the environmental lobby, wood fires have now been all but banned in many parts of the country, depriving many families of a cheap home heating alternative.

Ironically, through their ‘zero-carbon’ crusade, the Labour Government is planning to introduce measures that will significantly increase power prices, seriously exacerbating the cost of heating difficulties that many tenants already face.

In fact, most of the problems that Labour likes to pin on landlords, are caused by tenants themselves. If children pick up diseases caused by overcrowding, such as rheumatic fever, pneumonia and meningococcal disease, it’s not the fault of the house. Many child ailments can be aggravated by inadequate heating or improper ventilation, but again, turning on heaters or opening windows are the responsibility of parents.

Other law changes touted by the Minister include increasing the rights of tenants to keep pets, allowing tenants to make “reasonable” modifications to the property, and introducing significant new compliance and enforcement powers for the regulator MBIE.

The most contentious change that Labour has outlined – and the most dangerous – is their proposal to remove the ‘no-cause’ termination provision in the Act, which allows landlords to end a tenancy through a 90 day notice without having to give a reason.

At the present time, while tenants can give landlords 21 days notice that they plan to leave, landlords must give 42 days notice if the owner, a family member, or employee wants to live in the property, or if it has been sold with vacant possession. All other terminations require a 90 day notice period.

But not only is Labour signalling that they intend to increase a landlords’ notice period to 90 days in all cases, they also want to remove a landlord’s ‘no-cause’ right of termination.

This is seriously misguided. If the Minister needs reminding why, he need look no further than the tragic events that unfolded on July 27 2017.

On that morning, a property manager and her daughter, attending a property inspection at a rural home near Whangarei, were shot dead by a tenant who thought he was going to be evicted. A contractor who had gone along to install fire alarms, was also shot and injured.

Following a stand-off with the Police, the home was burned to the ground and the badly burnt body of Quinn Patterson was later recovered.

It turns out that his landlord had recently tried to evict him and as a result, he barricaded the house and gathered a stash of weapons – shotguns, rifles, handguns, thousands of rounds of ammunition, and even hand grenades.

He’d said he wasn’t moving out until after his lease was up and threatened to kill anyone who tried to force him out early.

While this was an extreme example, it does show that asking some tenants to leave a property can be exceedingly dangerous. The law should not be changed to make it more difficult than it already is. 

In fact, the Minister does seem to be aware that his proposed change could be dangerous, because he appears to be considering allowing public housing providers to be excluded from the requirement – under the guise that similar conditions will be introduced through a different law.

If this suggested exemption is indeed because the law change would increase the risk to public housing providers, then it is only acceptable if the same protection is made available to private housing providers as well. 

Since Minister Twyford has a responsibility to ensure that any legislative changes he proposes are not only reasonable and fit for purpose, but – most importantly – will not endanger lives, he should discuss his proposed removal of ‘no-cause’ rights of termination directly with landlords and neighbors in rental housing areas, where disorderly and disruptive tenants are living. In extreme cases, when it is a gang, their threats and intimidation can impact the whole neighbourhood.

The problem is that property owners may not have been aware, when they rented out their home, that the tenant had gang connections – and that the brotherhood intended moving in. But once they are there, with the community up in arms, but too fearful to make formal complaints, the situation can become extremely volatile and dangerous. Law changes should not be introduced that could potentially make this difficult problem worse.

Since the Minister of Housing appears to have embarked on his reforms under the assumption that  landlords are evil exploiters of vulnerable tenants, it is inevitable that his ‘solutions’ are misguided. Most of what he has proposed will not only lead to a decrease in the amount of rental housing available, but to an increase in rents as well. That is certainly not in the best interests of tenants.

Submissions on the proposals are open until 5pm, Sunday 21 October 2018 – if you are affected, we urge you to have your say.

THIS WEEK’S POLL ASKS:

Do you agree with Labour that the present rental laws are unfair on tenants, or do you think they are fair?

 

*Poll comments are posted below.

 

*All NZCPR poll results can be seen in the Archive.

 

Click to view x 120

THIS WEEK’S POLL COMMENTS

Labour play the double benefit game. Demonise landlords, drive them out of the market, free up housing and diminish the housing market values. Smart were it not the usual Leftist market intervention fixes all, which of course it never does. Maurice
god help landlords. they call this governing! idiots Barry
If tenants would just respect the places they rent, landlords might be more willing to improve them. Hannah
Labour has it’s head in the sand and will shoot itself in the foot if this proposed legislation is passed.. Appalling law changes. Twyford is drunk with power. Doesn’t know or care about the damage he is about to cause. Robert
I think Labour has gone mad and I think we need to seriously think of having a snap election and throw them out of government. I have resigned from the Labour Party. Fraser
Landlords invest considerable money in properties. Tenants have the right to decline to rent if a property does not meet their requirements. While there are some questionable landlords; there are many more questionable tenants. These tenants seem to feel they are entitled to government protection rather than accepting responsibility for their own actions. If the Labour government is concerned about a ‘Housing Crisis’ they need to encourage landlords. Peter
Naturally the media are bias and left-wing. In NZ journalism is dead; TV3 get their American info from CNN, the lowest ranked cable TV there and they all suffer from TDS – Trump Derangement Syndrome. When do we start agitating that we have no confidence in this appalling government? Monica
I think they are more than fair as the costs keep going up with the requirements to renovate to standards not necessarily kept by tenants especially by some tenants. The expectations of some tenants has suddenly claimed higher than ever before with the landlord paying for all the requirements imposed by new laws. Audrey
The new proposed changes will be unfair on the landlords Raewyn
Typical Labour thinking – they must control the rich pricks and protect the poor, deprived, and no-hopers! While there are good tenants, there are plenty of people who will never own their own homes, sometimes because of unfortunate circumstances, there are plenty of those who rely on the “gummint” to look after them. Same thing worldwide, pandering to their voter base, convince them they will never get off the plantation and will always be poor. Jacinda and Co are clueless. Leave landlords alone. Carolyn
For many years my family owned a couple of Rentals BUT after a run of Tenants that demanded more and more decided to sell them, other than one the others were left in a MESS and DAMAGED we lost money and the Bond did not come anywhere near to cover said damage and costs… Can see many more people deciding to do away with having Rental properties with what is in the wind. Marylin
Present laws are good, we do not need 3 month inspections by over zealous inspectors is not needed by Kiwi owners, foreign owners are probably greedy. George
Not only are they fair but a landlord needs to have much more control on how his property is treated and support to get rid of a tenant if necessary. I bought my first rental unit some 50 years ago and got out of the business just 2 years ago. I’ll explain why. I always maintained my rent on the low side of average. It kept some tenants happy and I retained their loyalty of several years in some cases. I had one tenant, 35 years ago who had a party as he was leaving. I was left with walls smeared with vomit and faeces. It was an expensive and unpleasant cleaning job. Moving on to more modern times and the ‘P’ problem. My last tenant seemed OK until he got in. Rent was unpaid, derelict vehicles were parked on the property, despite it being specifically forbidden in the agreement he signed. When the rent owed amounted to over $2,000 I went to the Tenancy Tribunal to get rid of him. They actively prevented me giving him notice, saying he had to have weeks of notice whilst living rent free. It was then I discovered he was smoking methamphetamine. Still obstruction from the Tribunal. Eventually he disappeared. I was left with broken windows, no keys returned, rent of $2,500 owing and the unregulated ‘P’ cleaning business. If I had listened to them it would have cost me thousands to have the place cleaned. As it was I had to replace all floor coverings and paint the interior throughout. In total the experience cost me over $6,000. Of course I was totally fed up and sold the place so it is no longer a rental. Never again. Chris
In my experience as a landlord the tenants have had the upper hand. We have done our best to be good landlords but when tenants have not paid or done damage we have acted like an interest free bank at the mercy of the tenancy tribunal, getting repaid at $2/ week for literally years after the event. Hilary
FYI – Quinn Patterson’s rental was on a fixed-term lease, and the ownership of the property had recently changed hands. The new owner would not honour his agreed obligations under the terms of the lease, and Mr Patterson could not get any assistance to deal with the situation. The Tenancy Tribunal were not able to deal with the matter due to the nature of the lease – it was not a standard Residential Tenancy Agreement. So why bring it up? Looks like you’re simply seeking sensationalism to further you argument… Talk about “false news”. Andy
We have already sold our rental house as we knew this was coming. That was a house and flat so two dwellings now out of the rental market as a direct result of bureaucratic meddling. Chris
Labour needs to pull its head in with this sort of nonsense legislation.. It obviously can’t see the wider implications. The sooner labour goes he better for NZ. John
Who in their right minds could agree with Labour. I certainly cannot!! Again and again ideology is driving Labour’s actions with no regards to reality.By creating an evil effigy ( ie the landlord) and blaming and making them responsible on a wholesale basis for the wellbeing ( or the lack of) of their tenants. In the course of these irrational actions Labour continues to make rental property ownership more and more unattractive for rental property owners and at the same time attack the very basis of rental property stock in NZ. This typical socialist approach is just another proof for the Labour’s stupidity . Besides — we will never see on million state houses being built — EVER– same bollocks like planting a billion trees. Alll cheap slogans to catch the underdogs vote. Michael
Some property managers are a greater problem !!!. Too greedy. Mark
Current legislation is unfair to landlords. Change will drive more landlords from the market and increase rental costs. Everyone looses which sadly is the definition of socialism. Richard
Present laws are fair to the tenants Mike
Left wing media is such a blight on our society Catherine
Will cease letting property if proposed laws are passed. Only person who will suffer is person living in very cheap but warm house. Lachlan
Good landlords look after good tenants. Disruptive and or gang affiliated renters are very much more common than is reported. Graeme
I was in insurance for 47 years and in that time I was involved in thousands of claims. From what I saw you need a Landlords protection society as well as a tenants. Many houses were kept in disgusting order and one I saw need $40,000 to repair damage simply caused by “filthy living”. Alan
Here we go again TWYFORD in cuckooland.This goose is an embarrassment.Will there be 10000 homes built in a year-no Will there be a bickway over the harbour bridge-no will he safety fix all roads in Nz -no WILL ALL RENTALS HAVE 18o ROOMS -NO. Just let’s forget this matter,WINSTON RUNS THE COUNTRY AND HE SAYS NO Don
The present rental laws are way too fair on tenants. The owner of the property needs to have complete control over who, when and for how long someone rents their property. When you rent a house, you do not take a risk. Everything is in your favour. The landlord, we’ll yes they take huge risks allowed someone to occupy their possession. It is usually a huge commitment for a landlord to purchase a rental, and we see them so often being labeled the bad guys. Sure there are a few dodgie landlords out there, but nowhere near the number of problem tenants. I know this because I was once a landlord, and have also been a tenant. Neil
Labours New ideas will cause rent increases and more housing shortages Les
The tenancy tribunal is easily access and will assist tenants to present their case Martin
There may be a few rubbish landlords, but the majority are very good. Should the commo Labour govt. get their way and introduce draconian legislation then I would recommend that all landlords withdraw their rentals until such time that they are treated fairly. You cannot allow tenants to trash a property and walk away with a smile on their face. Tennants should be required to take out an insurance policy to cover possible damage. No damage then full amount of insurance premium could by refunded. Allan
This could be Labour’s way of forcing owners to sell up to increase houses available for sale. George
In general terms they are more than fair. A minority of tenants with no normal life standards to live bye are the cause of these stupid proposed changes Tom
It is unfortunate that the law needs to be modified to spell out the minimum standards the rental house should have as too many Landlords have been shirking their basic responsibilities which a lot of us would call common sense. Porus
Socialist Government equals more & more state control, less & less personal responsibility. Free enterprise & freedom of choice have no place in the true communist world. A.G.R.
I sold the last of my rental properties in March this year. I simply had enough of the constant negativity toward landlords. Lee
Just been evicted after 3 years so a Relative of the owner can move in. Carl
They are already seriously stacked in favour of tenants. I recently had a case where the tenant stopped paying rent and was trashing the property but I had to wait 3 weeks to get a tribunal hearing to end the tenancy. About 40k of damage before I got them out. Dave
The current discriminated advocated by the government against rental property owners is generated by a hatred for so called “rich pricks”. It is fundemental to the anti freedom, equal outcome ideaology this government is persuing. Nothing more. It is definantly NOT about fairness, a word chosen to mislead & misdirect. It is about control. Tracy
More than fair ! The system is already biased towards tenants in my view. Kahn
As said in your article, 90% of the problems are the tenants not paying their rent, or when being evicted trash the house a s a parting gift. I had a few rental houses. My one in Christchurch I left the rent as stable because the tenants were good and I wasn’t worried about profit. I have sold my houses as I was finding all this discrimination against the owner untolerable. Ron
more bad tenants than landlords Colin
If you have ever tired to take tenants to the tribunal, you will soon find out how much in favor of the tenant the laws are !!! Maurice
There should be NO laws around this. Laws will, as usual, only have UNINTENDED CONSEQUENCES. Leave it to people and the market to work it out. Geoff
But! There are good and bad landlords. Just as there are good and bad tenants. But I think the bad tenants are more of a problem and don’t need more protection Tony
Over half of the tenancies of a house I rented in Kelston were to people who lied about pets, the number of people who would be occupying, or did damage and didn’t pay the rent on time. Landlords are all seen as rich, fat slugs feeding off the poor tenants, and any failure to be a good tenant (keep the place clean, pay the rent on time, and tell the truth) is seen as a game of “them versus us” in many tenants’ eyes. Lesley
The present law is more than fair on tenants and not very fair on Landlords. The last tenant I had that I bent over backwards to make life easier for them, I eventually had to give them notice as they wouldn’t even abide with orders from the Tenancy Tribunal, so they then went about and trashed the house and left my wife and I seriously out of pocket! Gavin
It is extremely difficult to make a profit with Insurance,rates and water rates having huge increases Making it harder to get rid of disruptive tenants who are in arrears is crazy Tony
In fact .. the current laws are MORE than fair on tenants. I sold my rental property 15 years ago because Landlords had no rights and tenants HAVE all the rights and tend to play on it at every opportunity. (Just the same as “criminals have rights and victims have none”). How long before landlords have to make their tenants beds every morning and provide them with 3 meals a day! Landlords should have the powers to evict unwanted tenants when ever they feel the need to do so, for whatever reason they want. WHO WANTS TO BE A LANDLORD .. NO BLOODY WAY! Des
Having a one sided agreement is not fair. Dennis
As far as I am aware ? David
More unbalanced thinking that should have no place in good government. Pieter
The present laws are fair and this stupid Government is determined to make landlords life more difficult Phil Twyford should buy some houses and let some deadbeats rent them and then he will see what some landlords have to put up with. After all most complaints to the tenancy Tribunal are from landlord about rent arrears and others problems tenants are causing and very few from tenants about landlords Colin
If a landlord, I’d sell up now Fiona
There needs to be much harsher penalties for tenants that don’t look after their rental. Rod
Provided both parties abide by the rental agreement, entered into freely, then where are the so-called “problems”?? Andrew
Labour should leave it be before they stuff it up altogether. Clark
As a person who lived in my property before I began to rent it out, I think the present law allows NEGOTIATION between landlord and tenants. That is preferable to having the government come in with unbalanced ideas driving seriously bad legislation. Ray
Already weighted in favour of tenants Huib
Sorry I messed up with Fair / Unfair click…this is my second corrected vote . Roy
Labour ..again shows how short sighted and inexperienced they are with trying this sort of legislation on { all to purchase votes }.. We all know the ramifications of this sort of legislation…again making other’s problems ; the problems of those that have worked hard; and paying huge taxes … to gather a small empire for their future , so as to not be a burden on the system later in life .We really have to get rid of these “Dumb “commo’s !..This country will be financially “broke ” by the end of 2020 …sad !! Roy
Twyford has got it all screwed up; no surprises there! Jim
My recent experience has show that the existing Tenancy Tribunal judgments are already heavily biased in favour of the tenant. Brian
Soon no one will be renting properties – then what are labor going to do? Rob
I have lost thousands of dollars in damage and unpaid rent. The tenants lost … nothing. I already provide dry homes – but I can’t make tenants open windows. Marion
Totally in favour of the tenant currently and about to get worse for the landlord Lawrie
Communistic political structures want total control. This is just another part of that process. Stuart
There are always TWO SIDES to every situation…. LL’s provide Shelter.. One of the most BASIC forms human survival..!! CHowes
This government is losing it Jimmy
Tenants must remember who owns the house we will after many years being a landlord never own a rental property again Peter
Role on the new rules we will get higher rents Michael
As long as tenants don’t trash the properties!! Sally
The present laws are unfair to Landlords. Labour wants to make them worse, Grant
A great article Jill
Geting good tenants is hard and when you do you look after them but the other side of the coin is the bad tenant who the Govt want to protect can cost you thousands in damage and they are hard enough to get rid of now with out the Govt making it harder Russell
The main voter base of Labour low income earners, students and Maori. Of course they’re going to penalise landlords to favour their voter base. It’s not about fairness it’s about staying in power. I’ve sold my rental properties. To hell with it. There far better investments with far less problems out there Trevor
Landlords need to be able to protect their own property from bad tenants. Mark
For many retired people, rental income supplements pension earnings. There are many costs associated with keeping up a property as well. I don’t agree with making it more difficult to get rid of extremely problematic tenants who can cause damage to property or pose a danger to landlords, others in the neighborhood. Tina
The govt will destroy tenancy facilities and place tenants in over priced rentals which would drive them out. Ian
I thought the law was working pretty well. Trust Labour to want to muck things up! Stewart
Demonising landlords for political gain shows why Labour cannot be trusted in government. The sooner we can get rid of them, the better. Colin
Here they go again, wanting to kill the goose that lays the golden eggs! Most landlords are Mum and Dad property investors trying to look after their retirement and do the right thing. These changes will make many think it’s just not worth the hassle.  Brian
We have a couple of rental houses, but if this stuff gets put into law, we’ll change and use them for Air B&B instead. Sue
Labour needs to leave its communist roots behind and start living in the modern world! Paul