REINZ backs proposed ban on rental bidding

The Real Institute of New Zealand (REINZ) has announced that it supports the proposed changes to the Residential Tenancies Act (RTA), particularly the banning of rental bidding.

The proposed changes, announced by Minister Kris Faafoi this week, aim to make the rental market fairer for tenants and make the act more relevant to the current market.

Bindi Norwell, chief executive at REINZ, said rental bidding has caused so much distress for tenants in the past.

“For many years REINZ has strongly discouraged the practice of rental bidding by landlords and property managers, therefore, we welcome the proposed ban on rental bidding as this just drives up prices in an unfair and unethical manner for tenants,” Norwell said.

“Additionally, we’re very supportive of the proposal to limit rent increases to once every 12 months. This will allow tenants and landlords to have more certainty and ensure everyone knows where they’re at in relation to their finances.”

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However, Norwell admitted that they’re concerned with the changes to the 90-day notice.

“In the vast majority of circumstances, landlords use “no-cause” termination notices as a way of bringing a tenancy to an end for issues such as non-payment of rent or anti-social behaviour. Competent landlords always prefer to have a property tenanted, and would prefer to fix problems raised by tenants, so only use the 90-day notice as a last resort,” she said.

“The proposed changes could incur huge administrative costs and the need for re-education and could lead to more landlords offering shorter tenancies or be deterred from leasing properties at all. Our preferred approach is to provide for higher exemplary damages to penalise landlords who abuse no-cause terminations.”

“It’s important to get the balance right between protecting the rights of tenants with the rights of landlords in order to look after both sides of the equation and we will look forward to engaging with the Government through the Select Committee process in relation to the proposed changes,” Norwell concluded.