No cause terminations, Labour’s new foreign buyer ban

I read an interesting Stuff article about Minister Kris Fafoi this morning. It would appear that the Labour-led coalition is committed to removing no cause terminations, it would appear that there is some belief from this Government that 90-day no cause terminations are extremely problematic.

Here’s what I find interesting:

  • 3% of terminations are done via 90-day notice.
  • competent and ethical rental agencies do not condone rental bidding.
  • 3% of Real Estate sales were foreign buyers – the foreign buyer ban didn’t cool the property market like Labour said it would.

It’s surprising to us because when Mr. Fafoi was approached by a collective group of 70 organisations operating in the Property Management sector and was asked if he would review the sector and regulate the industry – the answer was no, it’s not a priority.

It should be a priority Minister. Regulation will be far more beneficial for landlords and tenants in comparison to the mediocre proposal of changes we’re faced with at the moment.

Our company has completed a little market research among our Landlords and home owners. 4 out of 5 or 80% of those surveyed disagree with the proposed change to 90-day terminations. The majority agree with banning rental bidding; however, all other changes – disagree.

Will tenants be required to give a reason when they hand in their 21-day notice? Will the 21-day notice be extended out to 30 days or 42 days? Do most tenants even understand what their obligations are under s 40 of the RTA?

These changes highlight the importance of having a Property Manager who knows what they are doing when it comes to the RTA. Just the other day we were at Tribunal setting a precedent. Far North Property Management Limited v Hampson-Hoani set precedent by confirming a Landlord does not need to give a reason if they decide they aren’t willing to consent to the tenant revoking their 21-day notice. A High Court appeal Winther & Ors v Housing New Zealand Corporation found that where the RTA does not specifically state a reason must be given, then the Tribunal shouldn’t intervene with the termination and change the interpretation of the Act. As a result the 21-day notice was upheld and the tenancy was terminated.

Interpretation and understanding of the law is becoming more of a challenge in this industry as the laws change and become more complicated for Landlords. Now is the time to find you a Property Manager that knows what it is they are doing.

It’s a dark day for landlords as this Government decides to balance something that isn’t imbalanced…