The Real Estate Institute of New Zealand is warning tenants without an ‘excellent' rental history may struggle to find tenancies, as the Residential Tenancies Amendment Bill is due to have its second reading today.

Associate Housing Minister Kris Faafoi has promised to overhaul the Residential Tenancies Act 1986 before the election.

While renters say the updated rules are well overdue, landlords are worried they'll be stuck with troublesome tenants.

The legislation proposes to make tenancies more secure for renters, limit rent increases, allow tenants to make changes to their environment and more.

It also proposes to remove 90-day no cause terminations making it difficult and time consuming for landlords to remove problematic tenants.

At the moment landlords can give a 90-day eviction notice to tenants on open-ended tenancies without stating why.

Under the new law, the landlord would have to apply to the Tenancy Tribunal with three examples over three months of bad behaviour.

'Over the last eight months we have been engaging with the Government on behalf of the roughly 100,000 rental properties our members manage to warn them of the unintended consequences of this Bill,” says REINZ chief executive Bindi Norwell.

'It may also get much more difficult for tenants who can't provide an ‘excellent' tenancy rental history, as a rental property owner is now unlikely to select that tenant for fear that they will be unable to remove them should there be issues down the track.”

REINZ has also highlighted the issues around fixed-term tenancies automatically converting to periodic tenancies, which has also been included in the second reading of the Bill.

'The change to fixed-term tenancies automatically converting to periodic tenancies will significantly affect areas with strong student populations such as Christchurch, Hamilton, Auckland, Wellington and Dunedin,” says Bindi.

'Some of these areas are already struggling in a post-COVID environment, and these changes will just add further stress for rental property owners.”

Bindi says it's extremely important that tenants' rights and their interests are protected, but she say the changes announced today have gone too far the other way.

'We believe that there needs to be more balance in terms of protecting both tenants and rental property owners.

'Now, more than ever, our advice to rental property owners would be to consider using a property management professional who is up-to-date with the current requirements and can assist to resolve issues if they arise.”

-Additional reporting by RNZ.