Flatmates left unprotected in National’s rental proposals

by Lauren Pattemore - May 01, 2023

A social service provider in Queenstown says current rules can leave flatmates unprotected when disputes arise, as Queenstown locals react to the National Party's post-election rental agreement tweaks detailed at a public meeting held in town late last week.

Citizens Advice Bureau manager Tracy Pool is disappointed to see flatmates omitted from National’s proposed housing changes, but agrees current tenancy laws are “out of balance”.

She says her organisation deals with a lot of “head tenants verse flatmates” disputes and she would’ve liked to see this included in last week's announcement, which was solely “landlord verses tenant” focused.

In flatting arrangements where some tenants are on a lease and some others aren’t, it can become complicated.

“They [flatmates] fall into the cracks, like with buying a secondhand car.”

Around 55 percent of the CAB's tenancy inquiries are involving flatmate agreements. Flatmates “have no legal rights” and aren’t covered by the tenancy tribunal, Ms Pool says.

She’s spoken to Queenstown flatmates told to leave a house because a friend of the head tenant was moving in or head tenants refusing to give bond payments – which don’t have to be lodged through an independent body - back.

She believes flatmate bonds should also be lodged the same way as those of the tenants on the lease.

Tenants named on a lease are covered by tenancy laws that say rent can only be increased once a year, but their flatmates are not.

“They [head tenants] can come up to you and say ‘pay us more’…this person down the road can pay me $50 more for the room.”

People in Queenstown are experiencing this, and she'd like to see them given more protection, something she voiced with MP for Southland Joseph Mooney at the last week's public meeting on housing.

It was a packed meeting for Thursday's housing announcement.

National’s housing spokesperson Chris Bishop announced that if elected into government the party will reverse Labour's removal of no-cause terminations. Mr Bishop also committed National to stopping the near-automatic rollover of fixed term tenancies to periodic.

Ms Pool thinks the policy shifts may help restore some balance.

“It does means the rights come back. Right now, there are only four things that you can do to get your tenants out of that house…that means if it's a really shite tenant, they can't get them out,” Ms Pool says.

For fixed-term rental agreements above 90 days signed after February 11, 2021, an agreement will automatically roll over to periodic unless the owner is selling or renovating (in which case 90 days notice is required), or if they’re moving in, family is moving in or employees are moving in (then, 63 days notice is required).

However, late rent, or assault on the landlord can also lead to ending the tenancy early, however, this must be lodged through the tenancy tribunal.

National has also promised to restore the brightline test - the period when the owner incurs tax for selling their property - to two years instead of ten and bring back interest deductibility for rental properties.

Ms Pool has seen the effects of this change under the current Government, saying out-of-town friends have pulled their homes out of the rental market because of it.

It’s also the reason why Sonia Kiki Jones is only willing to rent her home out for less than 90 days under a short-term agreement, where this rule doesn’t apply.

“Have a look at what the rights are of the tenants and the rights of the landlords - they’re way out of balance,” Ms Pool says.

“I'm not advocating for landlords but, I'm just saying, there's more than one issue here. It’s not just the nasty landlord because they're not all nasty landlords.”

Professionals Queenstown manager Adrian Snow has seen properties on the rental market shrivel up under the tenancy act changes.

But, he says, it’s more the “anticipated risk” that makes renting unattractive, especially in Queenstown, where house prices are high.

Since the new tenancy laws came into effect, he's had only one instance where there has been an issue and the tenant in a property stopped paying rent without warning.

After a month of no payments and no communication from the tenant, they took the case to the tribunal.

“The landlord does not have an automatic right to end the tenancy anymore, the landlord has to apply to the tribunal."

The, due to a processing error on the tribunal’s behalf, it was eight weeks before the matter was considered, which was too long, he says.

“If the government's going to take control of that process they have to be responsive and able to address things in an appropriate timeframe.”

Meanwhile, he says the property owners were a young couple and “really worried” about meeting their mortgage payments.

“If a landlord can't control their private property, then they've lost some of the fundamental rights of real estate ownership.

“For those people that can afford to own the home without the income, it’s become too difficult and unattractive.

“If we want more homes for renters, and I'm a big supporter of that, really, the midterm and long-term answer lies with legislative change.”

It is his view changes to tenancy laws go just some ways to explaining the current rental crisis - he believes extending the bright line test to 10 years, the slow build of new properties in Queenstown – particularly in the five years following the Global Financial Crisis – and the rapid population growth of Queenstown, have all combined to create the rental shortage.

But he wants to disclose his obvious bias.

“We operate a property management company - ultimately, we're working for our landlords, but we like to treat our tenants well.

"We know that if we have a good relationship with our tenants, our management of the property becomes easier, and we will reduce the likelihood of any problems, whatever they may be.

"We do try to strive to treat people with fairness and respect. I think most professional property managers adopt the same attitude."

Meanwhile, Labour’s housing minister Megan Woods, who also visited Queenstown to talk housing in recent weeks, has called National's announced policy “callous”.

“There’s absolutely no need for the change. The status quo balances landlords' rights with the need for renters to feel they have some degree of security in their rental accommodation.

“National wants landlords to be able to once again terminate a renter’s tenancy without giving a reason, reversing Labour’s policy that balanced the rights of renters and landlords.

“There are a number of legitimate reasons to end a tenancy, and the rights of landlords are protected to terminate a tenancy under a range of justifiable reasons.

“This includes where a tenant has engaged in anti-social or illegal behaviour or is at least three weeks in rent arrears."

Read more: National announces rental crisis fixes in Queenstown

Main image: A sunny day on Lake Whakatipu.

Support Crux Support Crux