The latest changes to the Residential Tenancies Act 1986

There has been a flurry of media response to the announcement of changes to the Residential Tenancies Act 1986. In particular, the change that will prohibit landlords from ending a periodic tenancy without reason, has produced a range of arguments (depending on which side of the rental market people sit) including jeopardising peoples’ safety, clogging up the Tenancy Tribunal even more than it currently is, and neighbours having to deal with anti-social behaviour.

Landlords do not terminate the tenancies of good tenants

Despite the arguments for and against an end to no-cause tenancy terminations, the reality is that landlords do not terminate the tenancies of good tenants without very valid reasons.
Owning one or more rental properties is an investment and a business but a return on the investment is only generated if there is a rental income. A tenant who pays the rent and looks after a property does just that, provides a return on the investment. It makes no sense to terminate such a tenancy, and landlords do not do this regardless of claims some renters are making.

The bigger problem with the changes

Legislative changes made in recent years have already seen a significant loss of rental properties available. The bigger problem associated with changes to the rental laws is that the additional impositions on landlords are likely to drive more landlords out of the rental property market. With there already being a shortage of rental properties, this will put even more pressure on the rental market.
At this stage, we do not know the detail of the proposed legislative changes or how the details will impact on the rental market in the future, but the potential for the new changes to push an already high rental property shortage even higher is very real.