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‘No cause’ terminations not the answer

David Faulkner argues the answer to antisocial behaviour is RTA reform and speeding up tribunal proceedings.

By: David Faulkner

28 June 2023

Many will be aware that National has stated it will reverse the law change made under this Labour Government, allowing landlords to give tenants notice without a valid reason.

There will be many landlords who support this move. Landlords should have the ability to remove problematic tenants quickly and easily. The current law does not allow for this and it can be challenging to obtain sufficient evidence to seek termination through the Tenancy Tribunal against a troublesome tenant who is antisocial and proving to be a problem within the neighbourhood.

Even if you do, there is no guarantee that the adjudicator will terminate the tenancy.

In 2020, we witnessed significant changes to the Residential Tenancies Act that strengthened tenants’ rights. One of the many changes was the removal of no-cause terminations. Landlords had to provide a valid reason for ending a tenancy. Many feel that the pendulum swung too far in favour of tenants.

National argues the law change has hurt many tenants who, for whatever reason, typically struggle to find a property to rent. Some tenants may have a poor credit history, or their personal circumstances may pose too high a risk to rent to. In the past some landlords would give these marginalised tenants a trial period, and if things didn’t work out they could easily remove them.

Greater protection

As a property manager many years ago I would convince some landlords to give tenants who fell into this criteria a tenancy by placing them on shorter fixed-term agreements. If things didn’t work out, their tenancies would not be renewed, and they would leave. Everything worked well when I did this; the tenancy continued without major issues.

Tenancy law needs to protect landlords and tenants. A landlord chooses to be a landlord, a tenant often has no choice, so the law needs to offer them greater protection.

However, over 90 per cent of rental accommodation is provided by the private sector, so if we make being a landlord too hard who will provide accommodation for approximately one-third of the population? The state can only house some people. This government may have started out with the best intentions, but it has largely failed to deliver on the bold targets it set for housing and to make life better for renters. A social housing waiting list and skyrocketing rents are evidence of this.

Despite the RTA needing fine-tuning, it largely has the balance right. The law should make it easier for landlords to remove antisocial tenants. Currently, it does not do this.

A landlord must serve the antisocial tenant three notices within 90 days. In the notice the tenant must be informed of what the antisocial behaviour was, who was involved, what date, time and location it happened, and how many notices have been served. It must also explain that they have the right to challenge the notice.

Fixed-term tenancies

When applying to the tribunal evidence such as witness statements, noise control reports, and more must be submitted. Even then, there is no guarantee the tenancy will be terminated as the adjudicator will look at the tenant’s personal circumstances. Also, one must consider the time it takes to get a date at the tribunal, and this process can only be done for periodic tenancies.

None of this applies if you have a fixed-term tenancy. And here lies the problem. It is simply too hard, with no guarantee of a positive outcome, to deal with and remove antisocial tenants.

It is a reform of the RTA and speeding up tribunal proceedings which is the answer to the challenge around antisocial behaviour.

Tenants need protection and should exercise their rights without fear of retribution from a landlord. Tenants will be less likely to do so if there is an underlying fear that a landlord can issue a 90-day notice without reason.

The best way National can support landlords is to remove the draconian interest deductibility rule that Labour introduced and fine-tune the RTA, making it easier for landlords to remove antisocial tenants.

David Faulkner is the General Manager of Property Management for Property Brokers and is recognised as one of the leading experts in the New Zealand Property Management industry. He has been involved in the industry developing robust policies and procedures, training, and consultation services for many years.

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