Rushed Reform or Timely Necessity?

Friday, 22 November 2024


Residential Tenancies Amendment Bill


The New Zealand Government's Residential Tenancies Amendment Bill has garnered significant attention as it seeks to make transformative changes to landlord-tenant relationships. Provisions like reintroducing 90-day no-cause terminations, introducing pet bonds, and revising bond management systems are part of its sweeping agenda. But what lies beneath the urgency to pass this bill before Christmas?   

The surprise announcement of imminent changes to the archaic Bond system leads us to believe that the Government intends to make the amendments law before Parliament shuts down for Christmas. 


Key features of the bill

The proposed legislation introduces pivotal reforms:   

  1. 90-Day No-Cause Terminations: Landlords can issue a 90-day notice for periodic tenancies without providing a reason. This provision reinstates a landlord right removed in recent tenancy reforms, aiming to balance their ability to manage tenancies with tenant security.  
  2. Pet Bond System: Landlords can now request a pet bond of up to two weeks' rent. This measure aims to protect landlords from pet-related damages while allowing tenants greater flexibility to keep pets in rentals.   
  3. Bond Management Changes: The bill mandates swifter processing for bond lodgement and refunds, ensuring tenants can access their funds promptly at tenancy end or in specific circumstances, such as ceasing to keep a pet.   
  4. Shortened notice periods for tenants: Tenants seeking to end periodic or fixed-term tenancies will only need to give 21 days' notice instead of the current 28 days.   
  5. 42-Day notice for vacant possession: The real estate industry will welcome the reintroduction of the 42-day notice period for vacant possession. This change provides greater flexibility and efficiency in managing property transitions and aligning tenancy timelines with market demands. It will also reduce complications for landlords, particularly in sales scenarios where securing vacant possession is essential to meet settlement deadlines. 

Addressing delays and pet disputes

The bond system reforms are designed to modernise and streamline processes, emphasising tenant accessibility. The legislation recognises the fluid dynamics of tenancy agreements by allowing tenants to claim refunds during a tenancy under certain conditions, such as no longer owning a pet.   

For landlords, the introduction of a pet bond represents a significant shift. While it offers protection against property damage, the bill also clarifies landlord obligations, ensuring tenants are not unfairly penalised. However, questions still need to be answered about whether these measures will lead to increased administrative burdens, and the speed at which the new bond system is being launched is a concern. 


The Christmas Deadline

The urgency to pass this bill before the holiday season has sparked debate. Critics argue that the tight timeline limits the sector's ability to adapt. The Government, however, asserts that these changes address pressing concerns in the housing sector, such as rising tenancy disputes and inconsistencies in bond management.   

While the bill addresses tenant welfare and landlord rights, the tight timeline for implementation could strain both. Key concerns are around operational preparedness, particularly for the property management sector, which faces the challenge of updating systems and practices to align with new bond processing rules. This is going to take a lot of work in such a short timeframe.  

The bill underscores the Government's commitment to ensuring a fair and modern tenancy framework. Whether this is a rushed response to public pressure or a proactive step toward addressing long-standing concerns, it marks a significant shift in the rental landscape.   

As a sector, we must now navigate these changes together and, whilst doing so, ensure that we educate landlords and tenants alike. The coming weeks will determine whether the industry views this legislation as a Christmas gift or a lump of coal.





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