Tweet
Long-term renters may get stronger protection in law
by Ruth Laugesen - Sunday Star Times | Sunday, 23 March 2008
THE NATION'S growing army of renters may be about to get new property rights, meaning they cannot be evicted from a property when it is sold.
Building and Construction Minister Shane Jones says the government is concerned falling home ownership means many renters are no longer just student-style flatters. Increasingly they included young families and senior citizens who need more certainty about their long-term living arrangements.
"We have to move to a situation where we are placing an accent on stability and security for our families that are reliant on the rental market. If they can't get into full-blown home ownership, can we get them to an intermediate step where there is a new form of property right," he said.
One in four households are paying rent, according to the 2006 census, up on 10 years earlier when one in five were tenants.
He says he has asked officials to explore long-term leasehold agreements establishing property rights for tenants for 10, 15, and 21 years, of the type used in the United States. This would mean the tenant would get the benefit of any capital improvements inside the house and couldn't be evicted if the property was sold.
Jones, a landlord himself, says he has no interest in making life difficult for "mum and dad" Kiwi landlords. He says a new model can offer considerable investment advantages by providing a steady income for landlords and institutional investors.
Currently tenants must give at least 21 days' notice to end a tenancy and landlords must give 90 days' notice. If a landlord is selling a house, or they or a member of their family wants to occupy the house, they need only give 42 days' notice.
Fixed-term tenancy agreements can be entered into for longer periods, but they entail no ownership rights for tenants.
Leasehold agreements would give a right of occupation over many years at an agreed rent, with regular rent reviews and would mean the tenant would be able to make capital improvements and sell their leasehold.
"Obviously, the people who are investing in the bricks and mortar need to be confident they are going to get a decent return.
"And the people who are giving up home ownership and moving into these longer leasehold arrangements need to be confident they can turn it into a thriving, flourishing home that they've got long-term stable occupancy entitlements to," Jones said.
New Zealand Property Investment Federation vice-president Andrew King said often tenants were the ones reluctant to sign fixed-term agreements because they wanted the flexibility to move.
"Most property owners actually want to have a tenant for a long period of time," he said.
LANDLORDING IT
At the 2006 census, 366,000 households were paying rent, up from 272,000 in 1996 Home ownership fell from 73.8% of households in 1991 to 66.9% in 2006 The average tenancy lasts a year-and-a-half, with the average just 16 months for those with private landlords -
by Ruth Laugesen - Sunday Star Times | Sunday, 23 March 2008
THE NATION'S growing army of renters may be about to get new property rights, meaning they cannot be evicted from a property when it is sold.
Building and Construction Minister Shane Jones says the government is concerned falling home ownership means many renters are no longer just student-style flatters. Increasingly they included young families and senior citizens who need more certainty about their long-term living arrangements.
"We have to move to a situation where we are placing an accent on stability and security for our families that are reliant on the rental market. If they can't get into full-blown home ownership, can we get them to an intermediate step where there is a new form of property right," he said.
One in four households are paying rent, according to the 2006 census, up on 10 years earlier when one in five were tenants.
He says he has asked officials to explore long-term leasehold agreements establishing property rights for tenants for 10, 15, and 21 years, of the type used in the United States. This would mean the tenant would get the benefit of any capital improvements inside the house and couldn't be evicted if the property was sold.
Jones, a landlord himself, says he has no interest in making life difficult for "mum and dad" Kiwi landlords. He says a new model can offer considerable investment advantages by providing a steady income for landlords and institutional investors.
Currently tenants must give at least 21 days' notice to end a tenancy and landlords must give 90 days' notice. If a landlord is selling a house, or they or a member of their family wants to occupy the house, they need only give 42 days' notice.
Fixed-term tenancy agreements can be entered into for longer periods, but they entail no ownership rights for tenants.
Leasehold agreements would give a right of occupation over many years at an agreed rent, with regular rent reviews and would mean the tenant would be able to make capital improvements and sell their leasehold.
"Obviously, the people who are investing in the bricks and mortar need to be confident they are going to get a decent return.
"And the people who are giving up home ownership and moving into these longer leasehold arrangements need to be confident they can turn it into a thriving, flourishing home that they've got long-term stable occupancy entitlements to," Jones said.
New Zealand Property Investment Federation vice-president Andrew King said often tenants were the ones reluctant to sign fixed-term agreements because they wanted the flexibility to move.
"Most property owners actually want to have a tenant for a long period of time," he said.
LANDLORDING IT
At the 2006 census, 366,000 households were paying rent, up from 272,000 in 1996 Home ownership fell from 73.8% of households in 1991 to 66.9% in 2006 The average tenancy lasts a year-and-a-half, with the average just 16 months for those with private landlords -
Comment