New Landlords Obligations Will Increase Rents!



A whole lot of changes are in the process of being imposed on landlords that will most likely result in fewer people wanting to be landlords (less houses to rent) putting upward pressure on rents.

Many current landlords will find the regulations and increased costs means that they would rather sell than have all the worry, extra restrictions, and costs. 

Most of those houses will be sold to first home buyers - meaning fewer rental houses available leading to increased rents.

For those landlords that continue to rent out properties their costs will increase because of the Healthy Homes Regulations. Some of these typical costs are:

• Heating to be installed - $2,000 - $3,500

• Roof insulation to be installed - $2,500 - $ 4,000

• Underfloor moisture barrier to be installed - $1,000 - $2,500

• Ventilation - kitchen, & bathroom extractors installed - $750 - $1,500

• Drainage and guttering checked at the end of each tenancy

• Compliance statements - ongoing at change of tenancy - $200

• Insurance - tenant is only responsible for the damage done to the property to the excess of the landlords insurance even if they do thousands dollars more damage and the excess is say $500. 

There are increased penalties for non-compliance by landlords. The changes to the Residential Tenancies Act 1986 currently in parliament will make it far less attractive to be a landlord. 

90 days notice without giving a reason will make it much more difficult to remove “bad” tenants. Why would a landlord want to remove a good tenant?! 

Rent increases will be changed from 6 months to 12 months. Tenants can make minor (what is minor?) alterations without a landlords consent. 

What one person regards as minor another may regard as significant. There will likely be numerous time take and costly disputes because of this change. There are also increased penalties for non-compliance by landlords.

Apart from putting people off buying properties to rent and therefore creating an even greater shortage of rentals which pushes up rents, these extra cost and regulations will increase landlords costs, increasing rents even further.

In New Zealand most landlords are Mum and Dad investors with one rental brought as a long-term retirement investment to supplement their pension.

Every good tenant should enjoy a safe, dry, warm home. Every slum landlord should be driven out of the rental market. Many of the changes coming are very good and long overdue BUT some are counterproductive.

Make no mistake however rents will rise rapidly as a result.