News: Landlords pull out of property market over new tenant rights

by | Oct 3, 2019

Some landlords are selling up their rental portfolios as the Government looks to introduce tougher regulations that will beef up tenants’ rights.

The Government has a raft of proposals including heating homes, taking away a landlord’s right to say no to pets and axing letting fees but industry experts say it was a knee-jerk reaction and ”catered to a segment of tenants who have had bad experiences”. Gary Prentice from Rentals BOP said the agency had lost more than 20 properties in the past 12 months as clients sold their rental properties.

”It’s the same deal with most of the landlords, they are saying it’s getting into the too hard basket, and it’s not worth owning rental properties any more, so let the government do it.” Ultimately, the tenants would foot any costs, Prentice said. His experience follows that of an Auckland landlord facing a $42,000 bill to repair a damaged rental property – who has questioned whether it’s worth being a property investor under new tenant-friendly Government laws.

Tauranga Rentals owner Dan Lusby said he had advised landlords that his company could not manage properties if they failed to meet new insulation rules which would kick in on July 1. ”It’s forcing them to do it because we won’t be lumped with a $4000 fine if it’s not done.” Housing conditions needed to improve, he said, but landlords were in for a further shock as heat pumps could be required in main living areas, panel heaters in every bedroom and extractor fans in the bathroom and kitchen, he said. Spending up to $5000 to cover those expenses would wallop some landlords, he said.

Tauranga Property Investors Association president Juli Anne Tolley said she was concerned about a new clause in which landlords had to give a reason when giving a tenant a 90-day notice to vacate a property.

”If you have a tenant situation that is threatening or uncomfortable for neighbours, what do you do?”

Property investors were looking at other investment options like commercial properties, she said. Lindsay Richards has rental properties in Tauranga, Te Puke and Rotorua and he knew ”of a number of landlords who have sold up”. He said the talk from the government was potentially scary and he had decided not to buy or sell. ”I am going to hang in there and hope some common sense comes out at the end of the day.”

Meanwhile in the Coromandel Peninsula, Whangamatā Ray White property manager Trish Morisson said landlords needed to be aware the law was coming down heavily on the side of the tenants and if people do the wrong thing, they can be forced to pay all their rent back or be fined.

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