The WOF was openly and stringently examined over the past two years. The conclusion to all this research and discussion is that a WOF is expensive and doesn't target the key goal of warm dry rental properties.
Despite the minimum standards not even being in law yet, the Green Party has already reignited the issue with their Residential Tenancies Amendment Bill. A large part of this Bill is the call for a full WOF for rental property.
The call for a full WOF is the main part of the Bill which is so disappointing after the hard work that has gone into the issue over the past two years. The focus on insulation and smoke alarms announced in the proposed minimum standards will provide direct benefits to tenants with only a modest increase in their rental prices. This is a better targeted policy that will provide excellent value for tenants and the Government through reduced health expenditure.
The WOF is not the only aspect of the Greens Bill. They also want to increase the notice period when selling a rental from 42 to 90 days. The NZPIF believes this policy would be too restrictive for rental property owners. The 42 day notice is not only for selling the property but also for owners to move back into the property. Many people rent out their home while working or travelling overseas and could be severely inconvenienced with the higher notice period.
Under the RTA, an owner selling a rental property cannot give 42 days' notice until they have an unconditional agreement. By increasing the notice term from 6 weeks to 3 months, it is unlikely any home buyers would want to wait that long before moving into their new home. Sales would be restricted to rental property buyers which would restrict the market and achievable price. This would be unfair to rental property owners.
Another factor in the Bill is limiting rent increases to once a year. Just because rental property owners are allowed to increase rental prices every 6 months, that doesn't mean they will. However rental prices can sometimes move quite quickly and if rent increases are limited to once a year then the increase can be quite large and a genuine shock to tenants that can cause hardship.
The NZPIF advises members to monitor the rental market where they own property and make smaller regular increases if they find prices are increasing quickly. This is preferable for the owner, but it also helps their tenants to budget properly.
Potentially one of the most alarming aspects of the proposed Bill is allowing tenants a tenancy right of renewal. Details of how this would work in practice have not been disclosed yet, however in principle this policy would put too much control into the tenants hands. Potentially the tenant could stay in the property forever which would be grossly unjust for the owner, restricting what they can do with their own property. Such a policy could see many people withdraw from owning rental property.
As the Greens are not in Government the Bill will not automatically be introduced to parliament. For this to happen it will need to be randomly picked from the ballot. Despite this the NZPIF will be meeting with the Greens to find out more details of the Bill and put forward industry concerns.