Blog » Removal of the “no-cause” termination of a tenancy

Removal of the “no-cause” termination of a tenancy

Alide Elkink  |  February 11, 2021

The Residential Tenancies Amendment Act 2020, passed in August 2020, introduces a number of changes to the Residential Tenancies Act 1986 that take effect from 11 February 2021. (For an overview of the principal changes, please see my blog entitled Residential Tenancies Amendment Bill 2020 explained).

Removal of the “no-cause” termination provision

The past few weeks have seen a considerable level of media attention given to the changes to the Act, much of it hostile to landlords. In particular, the removal of the 90-day “no cause” termination of a tenancy , which means that landlords are no longer able to give 90 days’ notice to terminate a tenancy without giving a reason, has been seen as problematic.

Scaremongering by tenant advocacy groups

For example, one of the recent Dominion Post newspaper articles has the headline ‘Tenants get push as rules change’ (Dominion Post, Wednesday 10 February 2021, p. 23).

According to the article, a Christchurch-based Tenancy Protection Association director claimed that before the changes to the Act came into effect, “some landlords were looking to get rid of their tenants while they still can”.

This type of claim is scaremongering by tenant advocacy groups. Private landlords and property managers do not terminate tenancies without reason. Why would they? A rental property is an investment and an empty rental property does not earn money. To lose rental income by regularly changing tenancies is not a sound investment model.

Landlords are not exempt from scaremongering tactics either

Even landlord and property investor associations have done their share of scaremongering. One claim by property investor associations is that landlords are likely sell their rental properties and get out of the rental property market because it has become too difficult to terminate a tenancy without the “no-cause” termination provision. This, it is then claimed, will add further to the current shortage of rental properties.

Nightingales view

Our view is that the changes to the Act generally, and the ‘no-cause evictions’ provision in particular, pose a threat to tenants currently or to landlords on an ongoing basis.

For landlords, there are still provisions in the amendments to the Act that provide means of terminating a tenancy where there is damage, anti-social behaviour occurs and for non-payment of rent. In fact, for the latter situations (anti-social behaviour and non-payment of rent), we believe the provisions of the amendment have become more favourable to landlords.  

For tenants, there are significant benefits including greater flexibility in changes they may make to their rental property, more security of tenure as fixed-term tenancies automatically revert to periodic tenancies unless both parties agree to extend or renew a fixed-term tenancy or the tenant terminates the tenancy, rent increases may only occur annually, rent bidding is not permitted, and if a tenant’s complaint against a landlord to the Tenancy Tribunal is upheld, their name is not included on the Tribunal orders.