Proposed Changes RTA Amendment 2024 – Notice Periods
Significant reforms to the Residential Tenancies Act 1986 were made in 2018 and 2020. One of the most notable changes was the removal of the 90-day no-clause termination for periodic tenancies. This reform in our opinion is linked to increased emergency housing needs, as many tenants were displaced when landlords preemptively terminated tenancies before the changes took effect. It also made it difficult to accommodate tenants with credit issues or no rental history, as landlords lost the ability to efficiently terminate problematic tenancies.
Another major change was the restriction on ending fixed-term tenancies, re-advertising the property for rent, or enforcing a new fixed-term agreement. While this reform has been beneficial for many good tenants, it has also complicated the process of addressing problem tenancies. In particular, the Dunedin student market has faced challenges. Previously, students could secure housing for the following year in as early as July, as properties were re-advertised around that time. The new law, enforced in 2021, requires students to give only 28 days' notice to end a fixed-term tenancy. This has caused panic among students in recent years and, in our opinion, driven up student rental prices. With reduced enrollment at the university, many properties that received notice at the end of 2023 have remained vacant, as their locations are not suitable for general residential use. Additionally, the inability to offer short-term fixed-term tenancies and advertise for the following year has created further issues.
At Propertyscouts Dunedin, we believe that reinstating the old laws will provide more opportunities to give tenants a chance when we are faced with little rental history while allowing landlords to move on unsuitable tenants and not to mention secure student properties in a fair and timely manner where students are able to see the rental stock for the following year and choose the best property for their needs. In our view, good tenants are invaluable, and we strive to maintain a fair balance between owners and tenants.
Other proposed changes include the return of 42 days' notice for periodic tenancies in cases such as settling a sold property and allowing tenants to give only 21 days' notice to end a periodic tenancy. Although these changes have not yet been approved, they have passed their first reading.