If National becomes part of the next government, it is proposing to bring back the “no-cause” termination of a tenancy. This means that once again, owners will be able to evict tenants without the need to give a reason which, in turn works to undermine the security of tenure that tenants currently have.

The removal of the no-cause termination was introduced in The Residential Tenancies Amendment Act (RTAA) 2020 and took effect in February 2021. Its introduction meant that owners could no longer give tenants notice, except under clearly defined reasons laid out in the RTAA. These reasons include rent arrears, if the owner requires the property for themselves, family members or employees, is planning major renovations or alterations, or is planning to sell the property. While it may sound as if tenants have relatively little security under the present legislation, it is, in fact, not easy to terminate a tenancy.

If the no-clause termination is re-introduced, owners will simply be able to give notice with no reason given. This will leave tenants vulnerable to having their tenancy terminated for reasons such as the owner wishing to increase the rent within a 12 month period (currently rents may be increased no more than once in a 12 month period), or because the owner is unhappy with tenants’ complaints, such as mould and dampness, about the property. Tenants will have a greater reluctance to raise any issues if they believe that doing so will result in their eviction.

National’s reason for reintroducing the no-clause termination is that, combined with reducing the bright line test back to two years from the current ten, it will attract more people to become landlords and therefore be good for renters.

At the time of the removal of the no-cause termination provision in the RTAA, there was considerable scaremongering that it would result in landlords leaving the property market in droves. While some landlords did sell up, there is no sound evidence that reintroducing  the no-cause termination will encourage landlords to re-enter the property market or even remain in the market on that basis. Corelogic cites a number of reasons for landlords leaving the rental market. These include the removal of mortgage interest deductibility and the higher interest rates and costs generally that landlords are not able to recover through rents. They also cite the negative targeting of landlords in recent years as a reason [Stuff article: Landlords to quit property rental market], but there is no mention of the absence of a no-clause termination.

We at Nightingales believe that the reintroduction of the no-cause termination of a tenancy by a National-led government is a backward step in the residential rental market and will increase vulnerability of tenants as they lose the level of rental security they currently have.