This week, the Minister for Housing and Public Works has introduced proposed rental reforms which have the potential to change the shape of property investment in the residential sector, granting new rights to tenants whilst removing the ability for some landlords to make decisions about their own properties.
The result of over 135,000 submissions (98% of them from the public rather than the real estate industry), there are some obviously positive points, such as the ability for those suffering from domestic abuse to be able to terminate their tenancy agreement and get out of a bad situation. Other points might be less welcomed though, such as the removal of “without grounds termination of tenancy agreements”.
Now on the face of it, that phrase seems pretty reasonable – after all, terminating a lease without a valid reason seems pretty unfair, what about the poor tenant kicked out of their home!? Well, that’s not actually the thrust of it (and tenants are pretty well protected as it is, within the realms of the terms of their lease agreement). What it essentially boils down to, is that under this proposed change, a landlord will lose the right to end a tenancy agreement at the end of the fixed term of that tenancy agreement. Let’s imagine shall we, you as a property owner decide that for a set period of time, you would like to rent out your property. As the end of that period comes up, you decide that you would like to do something else with the property – renovate, AirBnB, short-term let, have a friend house-sit or just leave it empty. Well, unless the tenant particularly feels like moving out, under the newly proposed rules you will no longer be able to, with the only permissible reasons for termination being moving into the property yourself, having a family member move in or deciding to sell.
What’s the harm in this, you ask? It’s a property you don’t live in, why wouldn’t you want to have it tenanted and earning you money? The point is that most people invest in bricks and mortar because it gives them choice, it gives them control beyond what you can have in the stock market or other investments. Take away that choice and you potentially take away one of the real benefits of the property market.
As a landlord or prospective landlord, make sure you are up to date with these proposed reforms now, and take the opportunity to have your voice heard before they become reality.