Plans for a raft of changes to rental law designed to protect tenants have been unveiled by the government, but industry groups say they will create more problems than they solve.
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The new rules would include limiting rent rises to once every 12 months and banning landlords from soliciting rental bidding.
Landlords are currently entitled to evict tenants for no reason, provided they give 90 days' notice.
Under the proposed changes they would have to explain why - and prove it to the Tenancy Tribunal by giving three examples to justify eviction.
The Associate Housing Minister, Kris Faafoi, said the changes would benefit both landlords and tenants.
"I'm confident we're delivering the right balance to make real and significant change while acknowledging the need to protect landlords interests too," he said.
The proposed changes include:
- Limiting rent increases to once every 12 months
- Banning rental bidding
- Ending no-cause evictions
- An increase to financial penalties
- Tenants will be able to add minor fittings and improvements, such as baby proofing or hanging pictures.
A bill setting out the proposed changes to the Residential Tenancies Act 1986 is expected to be introduced to Parliament in the first half of next year.
Mr Faafoi said the proportions of New Zealanders renting has grown, and the new rules would provide security for tenants to set down roots in a community.
"Greater security of tenancy and less regular rent increases, coupled with the ability to make minor improvements, mean renters will be better placed to make their house a home."
The changes complete a package of improvement for rental markets, including the banning of letting fees and the introduction of a healthy homes standard, Mr Faafoi said.
But landlords are not in agreement with the government's decision making.
The executive officer of the Property Investors' Federation, Andrew King, said the changes were misguided.
The proposed law changes were well-intentioned but they would impact more than just landlords and tenants, he said.
"This is going to disrupt many communities in New Zealand because it's going to affect all the neighbours of the bad tenants that right now we can give notice to and we won't be able to after this.
"It means that neighbours who are having problems with our tenants, their anti-social behaviour, are going to have to complain three times before we can even ask the Tenancy Tribunal permission to move a tenant on," Mr King said.
Wellington Property Investors' Association's president Richard Bacon said landlords had warned the government about "unintended consequences" of the changes for years.
He said if landlords are limited to one rental increase a year, they will hike prices making it less affordable.
And landlords will become more strict on who they rent their homes to, because of the removal of the 90 day eviction policy, he said.
The proposed changes will be introduced to Parliament in the first half of next year.