Government delivers on rental reforms promise

  • Hon Kris Faafoi
Housing

The Government has delivered on its promise to New Zealanders to modernise tenancy laws with the passing of the Residential Tenancies Amendment (RTA) Bill 2020 today, says Associate Minister of Housing (Public Housing), Kris Faafoi.

“The Residential Tenancies Act 1986 was out-dated and the reforms in the RTA modernise our rental laws and align them with present-day realities for the around 600,000 households which rent in New Zealand,” Kris Faafoi said.

“More Kiwis than ever are renting now, including families with young children, as well as older people, and it’s important that there are appropriate protections in place for them.

“The Government considers that every New Zealander should have a safe, warm, dry home to call their own – including if they are renting. 

“Renters should be able to put down roots in their community and not face the stress of continually having to find a new home,” Kris Faafoi said.

Mr Faafoi said the reforms also come at a time when a lot of New Zealanders, including tenants, face financial challenges due to the impacts of COVID-19.

The reforms focus on helping tenants who meet their obligations to be able to stay in their homes by removing “no cause” 90-day termination notices, and replacing them with a comprehensive list of specified, justified reasons that a landlord can use to end a tenancy.

Other changes include:

  • Making rental properties safer and more liveable by enabling tenants to make minor changes to the property, such as installing child-proofing, hanging pictures, or earthquake-proofing.
  • Improving compliance by introducing a range of tools for the Regulator (the Ministry of Business, Innovation and Employment) to respond to people who are not meeting their obligations.
  • Banning landlords from seeking rental bids and limiting rent increases to once every 12 months.

The Associate Minister of Housing said the reforms got the balance right in reflecting the need to modernise residential tenancy law and correct problems in a way which was proportionate, placed reasonable requirements on both landlords and tenants, and would endure changing market characteristics.

With the passing of the Residential Tenancies Amendment Bill, Kris Faafoi said he was grateful to New Zealand First and the Green Party for supporting milestone changes which improve tenancy laws for renters and landlords.

The bulk of the reforms will come into effect in six months, to give tenants and landlords time to prepare for the new rules.

The 12-monthly limit on rent increases will come into effect earlier to help tenants who are struggling financially as a result of COVID-19. Rent increase notices given from the day after Royal assent need to comply with the 12-month rule. Rent increases can take effect from 26 September 2020, at the end of the rent increase freeze which was brought in as part of the COVID-19 response.

“These reforms are just one of a number of initiatives we’ve delivered as part of our comprehensive plan to fix the housing crisis we inherited. Other improvements in the rental space that we delivered include banning letting fees and passing the Healthy Homes Standards so that renters can live in warm, dry homes,” Kris Faafoi said.

Notes:

Improving the wellbeing of New Zealanders and their families – even if they are renting, is a priority for the Government.  In the 2017-2020 period the Government has delivered on the following initiatives:

  • Stopping the large scale sale of state housing as it makes no sense during a housing crisis and does nothing to help house our most vulnerable people.
  • Banning letting fees which were unfair on tenants and had no economic rationale. This has made a difference to struggling families.
  • Implementing the healthy home standards to set minimum standards for insulation, ventilation, heating and drainage so that renters can live in warm, dry homes.
  • Establishing Kāinga Ora – Homes and Communities which plays a key role in providing quality tenancy services to public housing tenants.
  • Banning foreign speculators from buying existing New Zealand homes, to ensure that Kiwi families are not priced out of the market.
  • Committing to deliver 6,400 new public housing places by 2022, and consistently exceeding the yearly target of 1,600, including delivering 1,755 net additional public housing places in 2019/2020 year to 30 May.
  • Committing significant funding for 8,000 new public and transitional houses through Budget 2020. 
  • Releasing the Aotearoa New Zealand Homelessness Action Plan (2020-2023) in February 2020 to prevent and reduce homelessness. Most of the 18 immediate actions in the action plan are already underway.
  • First time home buyers now have more options with the Government increasing support for progressive home ownership schemes. The deposit required for a Government-backed mortgage has reduced to 5%, and family and friends can each use their $10,000 First Home Grant and their KiwiSavers to buy their first home together.

For more information on the Residential Tenancies Act reform visit the Ministry of Housing and Urban Development’s website.