The New Zealand Property Investors Federation (NZPIF) says proposed changes to the Residential Tenancies Act could destroy the student flat market and force people to testify against neighbours from hell to have them evicted.
The changes, announced yesterday by Housing Minister Kris Faafoi, are now up for more consultation as a draft Bill is drawn up, which is expected to reach its third reading mid-2020.
One proposed change is to make it so fixed term tenancies automatically turn into a periodic (open-ended) tenancy once the initial term is reached, unless the tenants decline to do so.
Peter Lewis, Vice President of the NZPIF, says this has the potential to "destroy the student rental market" in places like Dunedin, where properties are typically rented on a February-to-February fixed term cycle.
"There's great demand for those flats in January and there's no demand for the rest of the year because those students have all got houses," Mr Lewis said.
"What can happen there, under these proposals, is that students can rent that flat for the first year and then move to a periodic tenancy.
"Come March or April, they can all depart on 21 days' notice - that flat's then going to be empty and all the students have all got flats."
At present, landlords can end a tenancy with 90 days notice for any reason, but the proposed changes would make it so they could only end a tenancy for one of several pre-defined reasons.
One of those is for "anti-social behaviour", but Mr Lewis said the onus will be put on landlords - and neighbours - to prove the tenants are disruptive during Tribunal hearings, which could be intimidating for many.
"If you do have feral tenants, in order to remove them, you would need to go to the Tenancy Tribunal and make your case - of course the Tribunal is going to need evidence," Mr Lewis said.
"If you say 'these tenants are noisy and disrupting the neighbours', the adjudicator is going to say 'well I need need to hear from the neighbours'.
"So you're going to have people having to go to the Tribunal and stand there and give evidence against the Mongrel Mob, or some drug dealer or whatever, while their family is at home hiding behind the curtains from these threatening and intimidating neighbours.
"How many little old ladies or elderly couples are going to be prepared to do that?
"In most cases, from my experience, the neighbours are not prepared to give evidence - they want to complain anonymously.
"I think that is something that needs to be brought up - I can foresee it being a really major problem."
Mr Lewis said that some of the NZPIF's 4000-or-so members he had spoken to thought recent strengthening of tenants' rights had made professional landlording "a bit too difficult", with many now choosing to finish their existing tenancies and sell up.
"Landlording is a business, and like any other business you want to have the maximum income with the least amount of hassle - and some tenants are just plain hard work," he said.
"The scales are being tipped the wrong way - it should be an even-handed thing."
The net result would be more landlords selling out, Mr Lewis said, with some selling to owner-occupiers, which meant fewer rental properties on the market and higher rent for tenants due to increased demand.