• Maintenance delay proves costly

    The Tenancy Compliance and Investigations Team has successfully taken a Rotorua property management company to the Tenancy Tribunal for failing to fix serious problems in a rental property it manages, sending a clear message to all landlords that failing to address maintenance issues impacts severely on the wellbeing of tenants.

    The Tenancy Tribunal has ordered McDowell Real Estate Limited of Rotorua pay $3000.00 in exemplary damages for failing to provide and maintain the premises in a reasonable state of repair, in accordance with the Residential Tenancies Act (RTA) and regulations.

    Steve Watson, National Manager Tenancy Compliance and Investigations Team (TCIT), said that the most concerning thing about this case is the length of time the tenants had to live in a substandard premises which severely impacted their health as well as their daily lives.

    “These tenants repeatedly told their landlord of the problems with their rental property, and while ultimately fixed, they took 16 months to be addressed,” said Mr Watson.

    “When the living situation of the tenants gets to the point where vulnerable tenants, including a school-aged child, have to move out due to the conditions in the house, this is not only legally unacceptable, but also morally.

    “Tenants have an obligation to inform their landlord if they feel their rental home needs repairs, and tenancy law clearly sets out a landlord’s obligations to attend to this in a timely manner.

    “In this case the damage was caused when a water pipe in the celling burst and the roof was not fully repaired, causing the house to be cold, damp and draughty – all of which would not have occurred if the repairs had been done properly at the time. Due to the time taken by the landlord, the tenants had to tape up the holes with cardboard,” Mr Watson said.

    The TCIT was established following the changes to the RTA that came into effect on 1 July 2016. The team focuses on significant or ongoing breaches of the Act which pose a significant risk to vulnerable tenants.

     

  • Professionals join the Tenancy eBundle club

    Professionals are the latest property management brand to join the Tenancy eBundle family as an entire franchise.

    With the help of website developers Property Suite, Professionals have made this integration to their nationwide brand.

    “We are delighted to join the Tenancy eBundle and the feedback from our offices has been really positive,” Professionals CEO Mike Henderson said.

    There are a number of reasons for this integration:

    Driving Web Traffic
    Applicants are pushed to the Professional website to apply for tenancies. It not only strengthens their brand, but ensures the application process is the same, or similar, to other major industry brands.

    Efficiency
    The application and agreement process is seamless. It saves the property manager time by compelling the tenant to do the data entry when they apply online.

    Quality Applications
    The combination of mandatory fields and the application form structure, result in a higher quality tenancy application being submitted.

    Robust Agreements
    eBundle clients gain access to the tenancy.co.nz online tenancy agreement. This is updated regularly to reflect changes to legislation and relevant case law.

    At least 20,000 tenancy applications will be submitted to over 1,600 property managers this month.

    If you want to find out more about our online tenancy application and agreement, CLICK HERE

  • Home buying ambitions high among Auckland renters

    A survey of Auckland renters has found a strong majority maintained their ambition to own a home of their own – with 59% saying they intended to buy in the next two-to-five years.

    The Barfoot & Thompson survey was conducted in August and discovered some surprising results.

    “We were taken by surprise by the positive response around buying a home in the next few years. It’s very encouraging particularly given much of the recent commentary around it has been negative,” says Barfoot & Thompson Director Kiri Barfoot.

    “From the media reports, I would have expected fewer renters to say that they are aiming to buy a home, but perhaps there has been a change in sentiment towards the future of buying a house.”

    A random sample of one thousand tenants (response rate 31%) from its database of 15,000 tenants were contacted.

    Renters were asked what the important factors were in choosing a rental property.

    88% of respondents said price, and 85% said location. The number of bedrooms (67%), and kitchen space (52%) were also important.

    The most popular ‘extras’ influencing renters’ choice in a property included additional car parking spaces (57%) and extra storage space (53%). Outdoor space, a fully fenced section, and pets being allowed were also popular; each considered an influential factor in choosing a property by over 40%. Spa pools proved popular with just 13%.

    When asked who they would prefer to manage their tenancy, 48% of respondents said they would prefer a professional agency, 25% said an owner, and 28% said they had no preference for one or the other.

     

  • Significant Anderson v FM Custodians decision could signal change of tide

    A Tenancy Tribunal Adjudicator in Christchurch has delivered an order that could signal the days of full rent refunds for tenants are numbered.

    The Anderson v FM Custodians High Court judgement from 2013 has caused havoc in the residential rental industry over the past 12 months.

    Following that decision, many tenancies have been rendered unlawful because of non-consented work.

    Consequently, a growing number of tenants have been awarded full refunds of rent, sometimes totalling tens of thousands of dollars.

    But Adjudicator Armstrong has gone against the tide, saying in a Tenancy Tribunal order that the tenants weren’t entitled to a full refund of rent.

    “This order comes as a welcome relief for landlords who have been reeling from the tide of the decision adopting the Anderson approach,” tenancy consultant Scotney Williams said.

    “This decision swims against that tide and casts doubt on the rationale in the Anderson case.”

    Adjudicator Armstrong acknowledged that the tenants, Bethani Edwards and Brett Townsend, rented a dwelling off Wongeoon Vast Limited that had neither a building consent nor a resource consent.

    But unlike other Adjudicators, Armstrong argued Section 137 of the Residential Tenancies Act 1986, has been misinterpreted.

    “I would find it very difficult to accept that Parliament intended that the Tribunal must order a landlord to repay to a tenant all rent paid by the tenant in every case where, for whatever reason, the premises could not be lawfully occupied by the tenant,” Armstrong wrote in this order.

    Section 137 

    Section 137 alludes to the fact that you cannot enter into a contract that contravenes the provisions of the Act, and that any money paid under the contract is recoverable to the tenant.

    Armstrong argues that Section 137, subsection 4, refers to money paid provided by the tenant “for the tenancy”.

    “The conclusion that I have come to is that the expression “for the tenancy” is intended to refer to payments such as premiums for a tenancy or other payments not in the nature of rent.”

    “Rent is generally regarded as payment for the use and occupation of the premises rather than for the “tenancy” as such.

    “Payment “for the tenancy” is more apt to refer to payment for the granting of the tenancy rather than payment in the nature of rent.”

    As a result, Armstrong ordered the bond of $1,180 to be paid to the tenants.

    “Only a further appeal from either side will clarify the uncertainty which now exists”, Williams, from the Tenancy Practice Service, said.

    Multiple tenants have been awarded full rent refunds over the 12-18 months.

    The most infamous case involved Dunedin landlord Vic Inglis, being ordered to pay back his former tenant Natalie Parry nearly $11,000

    Inglis has appealed the decision to the District Court, in a judgement that will be eagerly anticipated by the tenancy industry.

     – Report by Chris Matthews 

  • Rent-to-own-home scheme offers big boost to first home buyers

    The new Labour-led Government will launch a rent-to-own home scheme.

    The Green Party policy, that Prime Minister elect Jacinda Ardern announced as part of a confidence and supply deal, will be a massive boost to thousands of Kiwis who have been locked out of homeownership.

    “Rent-to-own was a strong policy platform for the Green Party, and we agreed it was something we should incorporate into KiwiBuild,” Ardern said.

    Green Party leader James Shaw said that a specific model hasn’t yet been agreed and that the policy had been designed to work alongside Labour’s KiwiBuild programme, which is promising 100,000 new houses over 10 years.

    “What we’ve said is, there is a commitment to a rent-to-own scheme of some description, and we’ll work through that with the Labour Party as the KiwiBuild programme unfolds,” Shaw said.

    Ideally the Greens want the policy to take no more than 30% of someone’s weekly income. They believe the plan will save New Zealanders $100 a week compared to commercial mortgages

    Ardern said the new Government would look at a number of options to get people into their first home.

    “For us it’s about using a range of mechanisms to make sure people get into home ownership,” she said.

    “Some of the subsidy schemes the government have introduced don’t necessarily help home owners, because the proportion of a deposit they’re expected to accrue is still just too high.”

    The Labour-NZ First Government also announced yesterday that they would ban foreigners from buying existing homes, and set-up a comprehensive register of foreign-owned land and housing.

     – Report by Chris Matthews 

  • Rental industry set to be shaken up by new Labour led-Government

    A big-shake up to the residential rental industry is imminent under the newly-formed Labour led Government.

    Within the first 100 days Prime Minister elect Jacinda Ardern, New Zealand First leader Winston Peters and co have a mountain of initiatives to tick off.

    Labour will hit the ground running in Government, with a programme of work across housing, health, education, families, the environment and other priority areas.

    As far as the rental industry is concerned, passing the Healthy Home Guarantees Bill, which will ensure that all rental properties will meet a minimum standard of insulation and heating, is top of the list.

    This Bill is awaiting it’s Third Reading and should be passed into law by the end of the year.

    The Residential Tenancies Act Amendment Bill, which is proposing changes to tenant liability, unlawful tenancies and methamphetamine, should also be passed into the law at some stage.

    Only the Greens voted against National’s Bill in its First Reading and unless Labour and New Zealand First flip, these changes should come into effect.

    However, with the Bill currently at the Select Committee stage, don’t be surprised if there are subtle changes before it’s Second Reading.

    Scrapping Letting Fees

    The biggest changes that Labour have proposed face a lengthier wait.

    Labour’s rental policy include scrapping letting fees for tenants, extending notice periods to 90 days abolishing “no-cause” terminations and limiting rent increases to once a year.

    All these changes, particularly the adoption of the Australian model for letting fees, where property managers bill the landlord for the cost of the finding a new tenant, will create a fair amount of disruption to the industry.

    Tenancy consultant Scotney Williams believes these proposed changes reflect the current state of flux in the industry.

    “Landlords and property managers will have to accommodate significant changes to their business model,” Williams said.

    “With the new Government promising to abolish the requirement for tenants to pay letting fees, property management firms will have charge their owner clients a fee to replace the abolished letting fee formerly paid by tenants or suffer reduced income.

    “Property managers and landlords will also find terminating periodic tenancies much harder with the removal of the “no cause terminations, involving the use of the 90 day Notice”.

    Labour’s rental policy isn’t a priority in their first 100 days in office.

    But that doesn’t mean it won’t happen and there is a possibility that the Greens’ initiative of a compulsory Rental WOF could be added to the mix.

    A lot will depend on New Zealand First.

    Sound familiar?

     – Report by Chris Matthews 

     

  • Election 2017 – Where NZ’s political parties stand on housing/tenancy issues

    In the tightest election in living memory, we layout where the parties stand on two of New Zealand’s most divisive issue. 

     

    National

    The big question most voters will ask is – what have National done in the past nine years to stop the crippling house prices and the ever-growing rise of Generation Rent?  Under their watch, the gap between the haves and the have nots has grown so wide that a large portion of the population will realistically never own a home.

    But don’t worry… Bill has a plan. National, in a fourth term, will create special housing areas across New Zealand to fast-track the building of houses. They will do this with a $1 billion Housing Infrastructure fund and by speeding up the consent process.

    National will also tighten rules to ensure people buying and selling property for profit pay their fair share of tax and remember the Residential Tenancies Act is currently being amended to clarify the situations around tenant liability, unlawful tenancies and meth.

    As National say on their website: “There are no quick fixes – these issues are longstanding…“

    Labour

    So what exactly is the Jacinda effect?  Will the new Labour leader’s headline grabbing charm conjure a centre-left Government? Only time will tell but once the honeymoon period has faded, we should be able to isolate Labour’s polices for what they really are.

    And that’s the way Jacinda would want it. She is forever fending off the same dribbling questions from factions of the media but here, at tenancy.co.nz, we will provide her with some dignity by presenting Labour’s housing and rental policies without worrying if Jacinda is going to increase income tax. For the record – she’s not.

    So here we go… Labour want to crack down on property speculators, build 100,000 more affordable homes over 10 years, grow the building workforce and remove barriers that are stopping Auckland growing up and out.

    As far as Generation Rent is concerned, Jacinda has them covered. Letting fees will be scrapped, notice periods extended, rent increases limited to once a year and Labour will abolish “no-cause’ terminations.

    Labour are also pushing forward with their Bill for all rental properties to meet proper standards in: insulation, heating, and ventilation.

    Ironically, former leader Andrew Little was the inspiration for that Bill.

    Greens

    The Greens head into the election with their future in serious doubt and if they fail to hit the 5% threshold, it might just be the biggest capitulation in New Zealand political history.

    Even if their demise is realised come September 23, the Green Party legacy could live on.

    Labour’s rental policy owes a lot to the Greens’ vision. Their Safe and Secure Rental Bill, which has many similarities with Labour’s policy, failed to pass its First Reading in 2016 after the conservative block of National, United and Act voted against it.

    NZ First

    Winston Peters first entered politics when the Government loaned home buyers’ money at a low interest rate. Ahh how times have changed!  The only constant it seems is Winton himself.

    So other than deciding the next Government, what does he want to do?

    Mr Peters wants to encourage private investment in upgrading rental housing through the taxation system. Under his policy, owners of rental houses could invest in home improvements and be able to claim back part of the expense through income tax. Home insulation, solar heating and heat pumps could all be claimed as an expense. Could be a win-win for both tenants and landlords.

    Act

    If New Zealand First is known as Winston’s party, then Act is most certainly David Seymour’s party. Barring a minor miracle, Mr Seymour will once again be a lone wolf in parliament come October.

    Ironically, for a man who says he can’t afford to buy a house on his $190,000 salary, albeit in one of New Zealand’s most expensive electorates, his party has little to no policy affecting landlords or tenants.

    Mr Seymour does have some good ideas around housing affordability though, with his objective to scrape the Resource Management Act a sure-fire way to reduce red tape in Auckland especially.

    Maori Party 

    It’s no coincidence that the Maori Party will most probably look to form a coalition with the left leaning parties if the numbers stack up.

    After giving National their vote of confidence in the most recent Governments, Marama Fox and Te Ururoa Flavell have indicated those days could be numbered.

    And it makes sense. The Maori Party want to eliminate homelessness, address the over representation of Maori and Pacific living in severe housing deprivation, improve the rights of renters, enforce a compulsory annual warrant of fitness for all rental homes and introduce options for ‘rent to buy’ for first time home buyers.

    All left leaning polices indeed.

    TOP

    Not left. Not right. Just common sense – says Gareth Morgan.

    And for a man who’s probably worth more than all the other political leaders combined, he could never be accused of making policy to serve his own self-interest.

    Mr Morgan wants to tax asset rich home owners so he can drop income tax for hardworking tenants and he also wants to match the German approach to tenants’ rights.

    Under this model, a landlord would only be able to evict a tenant if the property was damaged or rent was not paid. His overall goal is give families the security of tenure that homeowners enjoy.

    He’s also keen for a rental WOF. However, there’s still no word on whether cats will be allowed in rental properties.

    By Chris Matthews

  • RTA Amendment Bill Training summary

    A snapshot of what content is covered in the RTA Amendment Bill Training with Scotney Williams.

     

    Osaki and Tenant Liability 

    • The position before the Hollar v Osaki Court of Appeal decision, what the court case was all about and the effect of it is explained.

    • An outline of what happens to the Tenancy Tribunal when a Court, superior to the Tenancy Tribunal makes a decision like this.

    • An explanation on how the government rectified the decision.

    • What the Amendment Bill says about future tenant liability.

    • When a tenant will be liable under the new law is explained.

    • What and who is covered by the Amendment Bill.

    • An explanation on whether a tenant can repair the damage in satisfaction of the claim.

    • Outlining why insurance companies can’t benefit from limited tenant liability.

    • Explanation on how it’s unlawful for a tenant to demand, request or accept from the tenant any amount which exceeds the prescribed amount.

    • An example of what facilities that could be included under the new Amendment Bill.

     

    Unlawful Dwellings

    • An outline of what the notice period is in an unlawful dwelling.

    • The definition of ‘unlawful’ given.

    • An explanation on how you can terminate an unlawful tenancy.

    • Some varied examples of unlawful dwellings are provided.

    • How you can rent out a major and minor dwelling out if the latter doesn’t have a building consent.

    • Examples of Tenancy Tribunal orders relating to unlawful dwellings.

    • An answer on whether a tenant must pay rent in an unlawful dwelling.

    • An explanation on why a landlord can’t apply for compensation, damages or rent arrears if they have rented out an unlawful dwelling.

    • A description of what work orders the Tenancy Tribunal can make against a landlord who rents out an unlawful property.

    • A comparison with how property managers in Australia have to check the lawfulness of properties.

     

    Methamphetamine

    • An outline of the basic changes that will be made to the Residential Tenancies Act relating to methamphetamine.

    • A description of what circumstances a landlord can terminate a tenancy in the case of the methamphetamine contamination.

    • The definition of ‘abatement’ in a rental context defined and an example provided.

    • A description of what the landlord’s obligation is to the tenant in the case of a 7-day notice.

    • An explanation of how a landlord can commit an Unlawful Act if they rent out a contaminated property.

    • A answer on whether D.I.Y yes/no swab tests will be sufficient to terminate a tenancy in a meth contaminated property.

    • An outline of what the new meth testing standards are.

    • An explanation of what the difference is between a high use area and a limited use area.

    •An explanation of why the new standard deal with an area by area approach.

    • An answer on why the Amendment Bill has authorised landlords a specific period of notice to conduct methamphetamine inspections.

    • A discussion on whether tenants will have their peace, privacy and comfort adversely affected by the inspection law.

    • An answer on whether landlords will have to disclose the results of methamphetamine tests.

    • A discussion on whether a landlord/property manager should involve the police if they suspect methamphetamine use.

    • An explanation on whether you can make a tenant liable for contamination where they satisfy you didn’t do it.

    • A discussion on whether a tenant can sue for rent back if they discover if the property is contaminated.

    • A discussion on how the Amendment Bill relates to Boarding Houses.

    * An answer of what is regarded as zero on a methamphetamine report.

    * A discussion on what are the easiest markers to indicate that the dwelling might have been used to manufacture.