Changes to tenancy law being considered - long term tenancies

[artemis]

The Government is considering changing tenancy law to support the growing number of people renting indefinitely. Building and Housing Minister Nick Smith said officials were reviewing the standard tenancy contract set out in the Residential Tenancies Act. Some tenants say current lease and notice periods provide very little stability for renters wanting to put down roots.

The Insight programme on National Radio this coming Sunday after the 8 am news is on this topic. Will also be downloadable after the broadcast.

It would have to be optional both for tenants and landlords, wouldn't it? Can't see many landlords signing up to sitting tenants, especially in Auckland.

Wonder if it would work if a lump sum of rent was paid up front. For example, tenants take out a 10 year loan secured against their leased interest, and pay it to the landlord as rent in advance.

[klauster]

Remembering the discussing about NZ's renting culture and examples of counties doing better. The remaining question was – how many tenancies have been cancelled by landlords? The common situation is tenants wish to move.

What stops renters to sign a 5-10 years lease or fixed-tenancy? Still the question – what is in for landlords? How many landlords are carrying loss (unpaid rent, unpaid compensation for damage etc)?
Yes, changing the tenancy law sounds good if both parties are supported equally.

[Maccachic]

They could just advise tenants to rent from professional landlords and to be model tenants - therefore securing their long term rental. Who in their right mind turfs a great tenant out of a long term hold rental.

[artemis]

The Insight programme is available to listen here:

http://www.radionz.co.nz/audio/player/201760971

Most of the tenants interviewed were Auckland couples with one or more children, including of course Shamulbeel Eaqub (he says the culture of renting has to change). Generally they want stability, not surprising when they have children. (Politically incorrect I suppose but why on earth don't they sort their housing while still DINKs?)

Also interviewed was a guy from a new organisation Renters Unite! He is in his 30s with young children and wants regulation. Website is here (not much there yet):

http://www.rentersunited.org.nz/

Mr Twyford reckons landlords should fork out $5000 for heat pumps and insulation as they then have 15 to 20 years to recover their investment.

Dr Nick Smith said the standard tenancy agreement will be reviewed but that there will be no regulation forcing landlords and tenants into long term arrangements.

So - same old, same old. I'm picking there will be a nod to optional changes in the tenany agreement, nothing will really change and the issue will cease to be the cause du jour (until Mr Eaqub writes another book).

[donna]

The lack of notice - where's that coming from - isn't it 42 days for periodic? That seems fair - it's more notice than you need to give for a permanent job.

From RadioNZ

Grae Burton lives with his wife and two-year-old daughter in an older-style apartment in Auckland's Parnell. He never planned to be renting well into his 30s.
"I do feel like it's a lot of money to throw into something that, in the end, isn't yours - that you don't really have control over the length of time you can stay here," he said.

So a fixed term tenancy doesn't work for him?

"Renting doesn't give you security, so you might be asked to leave for any reason - quite often the leases you can get are only for 12 months, and that means that people have that inability to put roots down and make a shelter a home,"Mr Eaqub said.

Where's the proof renters want to be locked in for longer than a year? And what percentage are saying they do?

Also if tenants are allowed to do work on the property - where's the insurance to cover it? The tenant would have to take out insurance to cover their 'mishaps' like painting the walls - while forgetting to cover the carpet and there's a spillage etc.

"We are not prepared to give up on a generation and say renting is as good as it gets, but equally so we're interested in improvements we can make in the residential tenancy law to try and provide a greater degree of security and to make it work better for those that are renting."

Umm no mention of providing security for the landlord!

cheers,

Donna

[eri]

when tenants fit heat pumps

they stay longer

most LL would be open to existing good tenants

fitting heat pumps and signing long term (regular rent review) leases

the bigger ?

are nz tenants

more like studious germans

or perpetually in denial

greeks?

[Wayne]

(Politically incorrect I suppose but why on earth don't they sort their housing while still DINKs?)

Could be that they were priced out of the market and didn't want to wait until they are 50 to have kids.

[Maccachic]

Could be that they were priced out of the market and didn't want to wait until they are 50 to have kids.

Kids are a choice (luxury) and involve sacrifice like every other choice in life if you really want kids and want security maybe some planning to move somewhere where that is achievable is in order instead of expecting others to fund it.

[Wayne]

Kids are a choice (luxury) and involve sacrifice like every other choice in life if you really want kids and want security maybe some planning to move somewhere where that is achievable is in order instead of expecting others to fund it.

From the quote that this bit responded to I didn't read that Grae was particularly wanting others to fund things - just a comment that they hadn't intended to rent long term.
Having kids is not quite in the same league as a new TV.
Though it seems to be with some poorer people.

[Tan]

I thought there was some provision for long term renters. I recall a very savvy accountant I knew renting long term in Te Puke or Rotorua I think, she mentioned terms over 7 years came under a different type of agreement. Anyone heard of this? They were on a lifestyle block, it would not have come under a profitable farm and was residential.

Here in Karratha WA, when the boom times were happening up to a couple of years ago there were a lot of 5 year leases as it was so difficult to rent a house, let alone a decent one. Now all that has zoomed downwards and there are heaps of relatively cheap houses vacant - lots of break leases from people who lost their jobs & left town etc. Now leases are generally 6 months. Perhaps Auckland could learn from that?

A bit of useless info - In WA landlord insurance does not often cover periodic leases which are quite rare. A lot of leases have rolled off fixed term into periodic over the past couple of years and I am sure landlords and property managers are not aware of this. Mine is one example, it gives me more flexibility in a dropping market and the landlord is glad to have a reliable tenant at present. I am not about to bring up the insurance issue.

[Perry]

I thought there was some provision for long term renters. I recall a very savvy accountant
I knew renting long term in Te Puke or Rotorua I think, she mentioned terms over 7 years
came under a different type of agreement. Anyone heard of this? They were on a lifestyle
block, it would not have come under a profitable farm and was residential.

Section 5 of the RTA was modified a couple of years ago, but
it still contains a range of exclusions. I dimly recall that there
was once an RTA exemption for tenancies over a 7-10 years,
or something similar.

[Tan]

Thanks Perry, it was before the RTA changes I heard about this.

[Perry]

Half Of All New Zealanders Over 15 In Rentals
9 July 2015

Consumer NZ CEO Sue Chetwin, in a recent 3News article said the Act was written with
short term renters in mind. The rent generation may be looking for greater security
with longer fixed term tenancies. Currently a fixed term tenancy is for just one year.

What have I missed? FTTs cannot exceed a year? Does the RTA say that, somewhere?

Interpretation
fixed-term tenancy means a tenancy for a fixed term; but, except as provided in section 7(3)
and section 58(1), does not include such a tenancy that is terminable by notice

[artemis]

Hmmm, I heard Dr Smith say couple of weeks ago that he had asked his officials to review the standard tenancy agreement to see if changes could or should be made to support long term tenancies.

Now there has been a change announced that tenancy agreements will have to specify re smoke alarms and insulation, so it would make sense for other changes to be included at the same time.

To me a change along those lines would be a solution looking for a problem. Unless the aim is to shut down the Opposition and Shamubeel Eaqub on the issue with as little exertion or money as possible. Which could work.

[propertysearch]

Agree klauster.
Also what if the tenant stops paying rent, damages the premises and/or does the midnight flip? Maybe these would be covered.
The better way to cool any market is to have more supply: build more homes and/or highrise apartments.