Government abandons proposal to regulate property managers

Big news this month as the government decides not to go ahead with proposed legislation to regulate residential property managers.

The Residential Property Manager’s Bill was introduced to parliament in August 2023 by the previous Labour government and aimed to create a comprehensive regulatory regime for residential property managers and property management organisations. The proposed framework would set out expectations of property managers in ensuring they met certain standards and were qualified and accountable. 

On 30 April the coalition government announced it wouldn’t proceed with the proposal, and I have to say we’re disappointed. The proposal at least sought to put a framework around property managers and property management organisations and provide a set of professional standards to work to. 

We’ve all heard the stories about cowboy property managers, and my concern is that by abandoning this proposal it will continue to embolden the Joe Averages out there to create their own versions of what goes in property management. 

At Lodge, we’re continuing to act as though this regulation is in place, which means:

• Our agents are certified in Property Management and undertake continued professional development.
• We lodge and protect bond money in a trust account.
• Our Property Managers build relationships with landlords and tenants, and their safety is our utmost priority – they know the history of their properties and carry out approved inspections safely.

Are we ready to change the way we view renting?

Last month the government announced it would introduce legislation to make it easier for overseas investors to invest in build-to-rent developments, but there are plenty of local players looking to this as the future of renting in New Zealand already.

Common overseas but relatively new here, build-to-rent developments could play a big role in addressing the shortage of quality rentals. These developments are purpose-built, medium-to-large in size and designed to be built where tenants are within walking distance of local amenities and public transport. They also typically offer longer leases to tenants (3-7 or more years). 

The main benefits for tenants are in having new, warm, and secure spaces, professional management and maintenance, and greater security and stability with longer lease terms and exit flexibility. These spaces can also be pet-friendly, and usually tenants can make minor modifications to their home.

While the main benefit is that it encourages new homes to be built, which increases supply, it also means people looking to buy their first home won’t have to compete so much with investors, who would ostensibly be committed to these larger build-to-rent schemes. 

For a lot of property owners and investors these developments don’t always come to mind thanks to our entrenched ‘quarter-acre’ mindset, but as we struggle as a country with a severe housing shortage, we need to consider all options available – and build-to-rent developments should be part of the mix.

There are emerging opportunities in Hamilton worthy of build-to-rent, particularly in our northern suburbs where new infrastructure has been built to withstand intensification and public transport is accessible. 

Recapping recent change

It’s certainly been a busy few months with government announcements relating to property, and specifically, the Residential Tenancies Act (RTA), so here’s a recap to get you up to speed:

• 1 April: Return of interest deductibility.
• Early April: Plans announced to loosen the Credit Contract and Consumer Finance Act (CCCFA).
• 11 April: Changes to RTA announced to re-introduce 90-day no cause terminations and other notice period changes.
• 15 April: Further changes to the RTA with the announcement of a pet bond.