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National plans big rental law shake-up


The Government is about to overhaul laws governing the lives of more than one million tenants.

The previous Labour Government wanted to introduce pro-tenant provisions, but the new National-led Government plans to scrap the most contentious of these so the balance is more even, and to pass sweeping reforms.

Moves to limit tenant liability for property damage, pay for professional tenant advocates in Tenancy Tribunal hearings and ban real estate agents from charging letting fees could all be scrapped.

Housing Minister Phil Heatley told the Herald yesterday that he was reviewing Labour's Residential Tenancies Amendment Bill (No 2) and was considering many changes.

He hopes to introduce by the middle of the year a revised bill that will scrap Labour's attempt to limit tenant liability.

Its proposal was to cap financial liability for property damage to four weeks' rent, a move of great concern to landlords.

A month's rent would have been the maximum penalty for any damage if the Tenancy Tribunal or a court decided the tenant did not cause it intentionally or recklessly. This was proposed after a tenant was held responsible for the actions of a flatmate in causing a Dunedin house fire.

But Mr Heatley wants to throw out the property-damage limit and ensure landlords do not have to pay the costs of damage done by tenants or their guests.

Proposed amendments to the Residential Tenancies Act were some of the longest-running and most controversial of the previous government's time in power.

A bill was introduced to Parliament last May, but was not passed before the change of government. Labour began consultation in 2004, promising to clarify the rights and responsibilities of tenants and landlords.

Mr Heatley's plan to ditch parts of the Labour bill was welcomed by Andrew King of the Auckland Property Investors Association, who said Labour was on an anti-landlord drive.

Mr Heatley praised some of Labour's proposed reforms, particularly bringing boarding houses under the Residential Tenancies Act.

"This bill is well intentioned in that it aims to encourage stable tenancies in homes which are well looked after while enabling landlords to better manage them," he said.

But concerns had been raised about some provisions of the bill and about matters that it did not cover.

These were:

  • The absence of proposals allowing decisive action to be taken over assaults, or threats of assault, by tenants' guests or associates. This was sparked by situations where tenants invite gang members to their houses. The Tenancy Tribunal cannot evict a tenant if the tenant's associates assault a neighbour or a landlord.
  • Proposals that would ensure landlords did not have to bear the costs of damage done by tenants and those they invite into their homes.
  • Ensuring that the Tenancy Tribunal did not become an uneven, expensive and time-consuming forum through the introduction of professional tenant advocates.
  • Clarity over the legal status of a tenancy once the original tenant dies. This affects inherited tenancies and court rulings where descendants of the original tenant can demand a tenancy continues.

Labour's bill would also have stopped real estate agents charging letting fees, but this is likely to be scrapped.

"I have to be satisfied that what has been drafted appropriately balances the rights and obligations of tenants and landlords," Mr Heatley said.

"While I am comfortable with many aspects of the bill, I am concerned that some specific provisions may deter future provision of private rental housing. This is of particular concern given predicted growth in housing demand."

Helen Gatonyi of the Tenants Protection Association in Christchurch said she had backed Labour Party minister Maryan Street's original bill, particularly its tenant advocate aspects.

Landlords were usually represented by professional property managers at the Tenancy Tribunal
and tenants had the right to state-funded advocates to redress the imbalance.

But Mr King said most landlords were not professional business people but wage and salary earners who could have been disadvantaged at tribunal hearings if tenants had been given state-financed advocates.


  • New Zealand has about 450,000 rental properties.
  • They are occupied by more than one million tenants.
  • More Kiwis are expected to rent in the near future.
  • The Residential Tenancies Act governs renting.
  • Labour was planning a pro-tenant law change, but the bill did not pass before the change of government.
  • The new government is planning changes to the Labour bill.
  • Its proposals are seen as being less pro-tenant.


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