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MBIE reminds landlords to stay on top of the continuing changes to the law on how they can deal with tenants. The latest rules affect ending a tenancy, rent bidding, and a tenants rights to change the property

MBIE reminds landlords to stay on top of the continuing changes to the law on how they can deal with tenants. The latest rules affect ending a tenancy, rent bidding, and a tenants rights to change the property

This is a re-post from a recent MBIE note.


Recent changes to tenancy laws affect many aspects of residential tenancies, including:

  • how you can end a tenancy
  • rent bidding when you seek new tenants
  • responses to tenants’ requests to make changes to your property.

These are the latest in a series of tenancy law changes.

What you need to know and do

When: From 11 February 2021

What: Multiple changes to tenancy laws, which include:

  • Ending tenancies: Landlords and property managers can no longer end a periodic tenancy without reason just by giving 90 days’ notice.

Giving notice to end a tenancy(external link) — Tenancy Services

  • Responses to tenants’ requests to make changes: You can’t refuse if a tenant wants to make a minor change to your property, eg installing picture hooks or curtains. Tenants must ask before doing anything and you must get back to them within 21 days. A change is minor if it’s unlikely to damage your property, poses no risk to health and safety, and needs no council consent. It must also be easily removed, so your property can be returned to a substantially similar condition at the end of the tenancy.
  • Ban on rent bidding: You must now include a price when advertising a rental property. You can’t encourage would-be tenants to pay more than this advertised price. For example, if someone really wants to rent your property, you can’t tell them they can beat out other people by paying more than the asking price.

All tenancy law changes(external link) — Tenancy Services

Other recent law changes

The February 2021 updates are the latest in a series of tenancy law changes. Other changes include providing a healthy homes compliance statement with most new or renewed tenancies.

New rules on healthy homes

Key dates for landlords

From 12 August 2020: Rent increases limited to once every 12 months. Previously it was once every 180 days (six months).

From 11 February 2021: Several law changes to the Residential Tenancies Act took effect, as outlined above.

From 1 July 2021: All private rentals must comply with healthy homes standards within 90 days of any new or renewed tenancy.

From 1 July 2021: All boarding houses must comply with healthy homes standards.

From 1 July 2023: All houses rented by Kainga Ora (formerly Housing New Zealand) and registered Community Housing Providers must comply with healthy homes standards. 

From 1 July 2024: All other private rentals must comply with healthy homes standards. This means fixed-term tenancies that have not renewed since 30 November 2020. 

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3 Comments

All this do the tenants is a decrease of choices and a rent increase.
Plus, tenants without good rental history became almost impossible to land a tenancy.

Investors have at least 3 viable options to choose from with the new developments.

Option 1:

Convert the current property into ABNB especially if it is in a tourist area or at a non-negotiable transit point between 2 tourist areas. The internal tourism is suffice to make this viable. The benefits of this strategy allows you to continue with a income and protection from guest damages as ABNB will be liable for damage compensations. If guests wants to stay longer, they can continue to make their reservations with ABNB.

Option 2:

If you're finding ABNB bothersome you can leave your property empty and still be in the positive side of your financial health.

Using the long term growth rate of the property market at 7.94%, a median priced property value is expected to increase by $59,550. Assuming your net rental yield is zero when the property is rented out, your net gain based on the long term growth rates is still positively $24,440. If you work it backwards, your overall gain is still +4.68% - without tenants.

If you were to consider the national annual growth rate of 19.3% based on last 12 month's market performance, you'll still be up 16.04% without tenants.

Your rate will slightly be higher or lower depending on your current net rental yields but close to the average we're talking about here.

Option 3:

Read the new changes in the rules carefully and be creative.

I'm not listing them here today in case it hurts the snowflakes.

Why would landlords pick bad tenants ? i didn't before changes .