Advocating against reinstating 90-day no-cause termination

Thursday, 30 November 2023

Expect major shifts in 2024 as the new coalition government is poised to swiftly enact changes, especially in reversing housing policies.

The National Party's housing plan focuses on boosting supply by promoting Build-to-Rent as an asset class, reinstating interest deductibility, and reducing the bright-line test to two years. Additionally, they plan to revise tenancy laws to encourage investor participation in the rental market.

One change with a lot of support from landlords and many property managers is returning to a 90-day no-cause termination. This was well-documented in the campaign leading up to the election, allowing landlords to give notice without reason.  

They argue that vulnerable tenants are being squeezed out of the private rental sector because landlords are no longer willing or able to give these tenants a chance.

The fear is landlords will end up having a tenant who is antisocial and may cause damage to the property. While understandable, swift termination should be straightforward for tenants causing willful damage, falling behind on rent, or disrupting the community.

Landlords departing due to high compliance costs and tenant-friendly legislation is another significant factor to consider. As landlords move on, tenants may face a housing crunch with limited affordable options. Under a Labour-led Government, the social housing waitlist has unquestionably surged.

In just six years, from October 2017 to September 2023, the social housing register increased from 5,8441 to 25,2842. A staggering increase of over 330%. Compelling reasons support a return to previous legislation, granting landlords the ability to serve notices.

However, when you become a landlord, there is a social contract that goes beyond a pure monetary measurement.

Tenants require more security than landlords, as being a landlord is a voluntary choice. Of the approximately one-third of the population that rents, many would prefer to live in a home they own. Rising prices in the past decade have denied many tenants the chance to own a home.

They are condemned to the rental market for life. There are also broader implications for our communities. Rising family transience, beyond their control, may lead to a surge in wider societal issues. Family upheaval may separate kids from friends and disrupt schooling.

This can lead to issues around mental health, which some argue is the new pandemic we are having to deal with post-COVID. In the long term, we will have issues with productivity as moving from school to school will have a detrimental effect on the education and upbringing of our children.

With landlords being able to give a 90-day notice without reason, many tenants may also fear exercising their rights when there is a legitimate reason to do so. I understand that tenants can apply to the Tenancy Tribunal if a notice is deemed to be retaliatory; however, this can be very difficult to prove.

It is, therefore, a delicate balancing act. The country needs a solid private rental sector, and landlords provide a valuable housing solution.

Making it too complex leads to a rental stock shortage, increased rents, and an explosion of people waiting on the Social Housing waitlist. However, reverting to the 90-day no-cause may not be the answer. We are responsible for ensuring tenants feel safe and secure in their homes.

We should offer landlords better protection by making it easier to remove antisocial tenants. Some of the laws introduced by the previous Government around antisocial behaviour need to be revised. As things stand, removing an antisocial tenant is only possible on a periodic tenancy. This makes no sense. Then you have to do the following.

  • Send three separate occasions within 90 days, the tenant has undertaken antisocial behaviour. 
  • On each of those occasions, the landlord must have sent a notice with specific behaviour deemed antisocial, the time when it occurred, and the location.  
  • They also need to state how many notices they have sent. 
  • The landlord must also apply to the Tribunal within 28 days of the final notice. 

There needs to be greater flexibility within the law. Some cases of antisocial behaviour are far worse than others, so specifying the number of notices served restricts an adjudicator from making an order when termination is appropriate.

Keeping the termination notice as is and making the legislation more landlord-friendly regarding dealing with antisocial tenants is the best solution.

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