Turns out a key government policy and ongoing push to end no-cause terminations is based on zero data. Zip, nada, nichts, none! This smoking gun email…
A key Labour policy to abolish “no-cause” terminations of tenancies appears to have been based on 100% blind ideology and 0% data.
This smoking gun email from MBIE in response to an information request under the Official Information Act says it all…
Your email of 14 August 2019 to the Ministry of Business, Innovation and Employment has been transferred to the Ministry of Housing and Urban Development for response. You requested the following information under the Official Information Act 1982 (the Act):
Please supply me with all the data which you have that gives statistics on how many terminations in the calendar years 2012 to 2018 were as a result of “no-cause” notifications.
Please supply me with all data which you have that gives statistics on how many terminations in the calendar years 2012 to 2018 were as a result of terminations using Section 51 (d) of the Residential Tenancies Act 1986.
Please provide the statistics in a numerical form as well as a percentage form and for each individual year.
As you may be aware, unless a ‘no-cause’ termination is considered to have been issued in retaliation, or there has been a procedural issue with the way the notice was given, the validity of the notice is not able to be challenged by tenants at the Tenancy Tribunal. This means that there is no record of decisions about each time a ‘no-cause’ termination has been used that can be analysed for insights about their frequency or the situations where they are generally used.
Research is therefore limited to surveys of tenants and landlords about their experiences with ‘no-cause’ terminations. The New Zealand Government has not commissioned surveys of this type, but has received information from tenant and landlord advocacy groups about their members experience with ‘no-cause’ terminations. We also received many submissions on this topic as part of our consultation to inform our work on reviewing the Residential Tenancies Act.
Your request is therefore refused under section 18(g) of the Act, as this information is not held by the Ministry.
It’s obvious from this email response that they’ve listened to pressure groups but not sought any data.
What’s with no-cause terminations?
No-cause terminations give landlords the ability to terminate a periodic tenancy with 90-days notice without the need to justify the termination.
The government sees this as a disadvantage for tenants and believes they deserve to know the reason for termination.
The advantage of no-cause terminations is that it is far easier than proving a breach by tenants.
Some breaches, such as damage to the property, are easier to prove. But proving a tenant has been acting in an anti-social or intimidating way towards neighbours can be difficult.
Neighbours in this situation naturally fear retaliation and many are reluctant to provide a formal complaint.
Andrew King, executive officer of the New Zealand Property Investors Federation, said there was no evidence that 90-day notices were being abused. He has only used one in the last 10 years to get rid of an abusive tenant who was making life impossible for neighbours who were too scared to provide evidence for King to present at the Tenancy Tribunal.
King says private capital is needed to provide rental housing and he fears regulation that drives landlords to exit the industry.
Which leads into the law of unintended consequences…
The law of unintended consequences
If one pushes idealistic legislation that disregards the knock-on effect for the poor, it’s the poor who feel it most.
For example, even when there is sufficient evidence to take a tenant to the tribunal (e.g. when they’re behind on rent, causing complaints from neighbours, exceeding the number of people allowed to occupy the dwelling, and generally making life difficult for the landlord), it’s easier to just issue a 90-day notice than to go through the Tenancy Tribunal and get an order for eviction.
This has the side benefit of protecting tenants from having a ‘black mark’ registered against their name on the Tenancy database. This black mark would, of course, make it much more difficult to rent another house.
Remove no-cause terminations and you force landlords to provide details of these breaches in order to obtain an eviction notice, leading to the dreaded ‘black mark’. Those who can least afford it now become the least able to rent another house.
The war on landlords
Plenty of investors have left the market. Many sold at the first threat of a capital gains tax. More left when they discovered it was too expensive to upgrade their properties to comply with the new healthy homes legislation.
Ironically, this legislation came with a nice financial kickback for tenants happy to nark on their non-compliant landlords. Talk about pitting one group against the other.
The disincentives for private investors to invest in the rental housing market have sent them into such things as property funds and other passive investments instead.
And when the pool of private rental housing goes down, rents go up. Wellington rents have increased 12% in one year.
Poor families are going backwards faster than ever 😢