Landlords face significant changes in a revamp of tenancy laws expected to be unveiled later this year.
The 20-year-old Residential Tenancies Act has been under review for the past 18 months and recommendations for reform are due to go to Cabinet by May.
A key change is likely to be a push for greater security of tenure for the 600,000 tenants who rent properties in New Zealand.
The overhaul began with a discussion document released in November 2004 and titled Getting the Balance Right.
It noted a third of New Zealanders rented their homes, with the average tenancy lasting 15 months or less.
Eighty-one per cent of tenants rent from private landlords or trusts and 210,000 bonds are lodged for rental properties each year.
The paper identified 11 key themes and sought feedback. Among them: Whether the balance in the law between landlords and tenants was right; whether more stable housing was needed; variations in property management standards; and the adequacy of advice to potential property investors and landlords.
A total of 574 submissions was received, most from landlords. Only 39 were from tenancy representatives.
Not surprisingly, landlords took the view the law favoured tenants, while tenants believed landlords held all the cards.
Submitters commented on difficulties experienced in enforcing Tenancy Tribunal orders, including problems for landlords in tracing tenants who owed them money, the time and cost of enforcement processes and a perceived lack of incentives to comply with tribunal orders.
Most submissions agreed that stability in housing was important. Many landlords expressed a preference for longer tenancies, but they also said fixed-term tenancies were difficult to enforce if tenants wanted to break them.
Some submissions criticised landlords' lack of professionalism and knowledge of the law, suggesting they should be encouraged or required to use professional property managers.
Others, however, argued that professional property managers themselves lacked training in property management and sometimes had conflicts of interest between there responsibilities as property managers and as real estate agents. Many submitters called for more information and education about tenancy laws.
Most argued against extending the Act to include tenancies with significant service components such as providing meals.
As part of the consultation process, 15 public meetings were held around the country.
Landlords at those meetings raised concerns about the different notice periods for terminating tenancies, arguing that notice periods should be the same for both landlords and for tenants.
At present landlords must give 90 days' notice and tenants 21 days.
Landlords also criticised the rent arrears process, including the requirement to wait between 10 and 21 days to take action, and delays in the Tenancy Tribunal process.
They said it was unfair that Work and Income New Zealand redirected benefits for paying rent to Housing New Zealand Corporation, but not to private landlords.
Other issues raised by landlords included problems in dealing with goods abandoned by tenants, and the need for tribunal orders to be made available online.
There were also calls for introducing a 'rating' system for landlords and tenants.
So what is likely to emerge when the government unveils its proposals for law changes?
The government has made plain it is concerned about stability of tenure for tenants. In some cases it wants people able to stay in the same rental home throughout their entire lives.
Proposals designed to foster longer-term relationships between landlords and tenants can therefore be expected to form part of the reforms.
How this is done is unclear at present but the government is likely to look at European models.
Home ownership rates are lower in Europe than in New Zealand and long-term tenancies are far more common.
The notice periods New Zealand landlords must give tenants may be increased from the current 90 days, or 42 days when the property is being sold.
Notice periods could be extended to six or 12 months. The reforms are also expected to try to improve the efficiency of tribunal processes, particularly when enforcing orders.
Submitters suggested tenancy debts should be treated like parking fines, rather than landlords being required to provide the new addresses of defaulting tenants.
Another proposal was that enforcement costs should be covered by the tribunal application fee, as is the case with the Disputes Tribunal.
Alternatively, enforcement fees could be payable only if enforcement was successful.
Suggestions unlikely to be implemented include calls for debtors' names to be published, and for landlords to be able to evict tenants themselves.
Another issue likely to be addressed in the law changes is housing quality.
Some submissions expressed concerns about the quality of rental homes. However, while there was broad support for safe and sanitary homes, there was a divergence of views about minimum standards for insulation, drapes, sound-proofing, heating and smoke detectors.
Both landlords and tenants feared mandatory minimum standards could see rents soar.
Some submitters argued the market should set rental housing standards, dictating the quality of homes at different price levels.
Others suggested a voluntary rental housing quality standard could be introduced, by using a star rating, for example.
However, not all changes to the system await the law reform process.
The Department of Building and Housing last year announced several reforms aimed at improving services to both landlords and tenants, with a gradual phase-in beginning in July 2006.
The changes will be evaluated after six and 12 months to check they are working properly.
Advice and mediation services will in future be provided in small towns ranging from Kaitaia and Kaikohe to Balclutha and Cromwell, which have not previously had services.
People can lodge tribunal applications online 24 hours a day and pay by credit card.
Phone services will offer advice during extended hours. Phone mediation will also be introduced in simple cases. Both landlords and tenants hope these and other reforms will reduce the 400,000 calls each year to Tenancy Services for advice.
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