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September mid-month newsletter - 18th Sep 2017

September mid-month newsletter

Building, Code of Compliance sign-offs:  Do you own a rental property that has had unconsented building work done to it?  If so, then you are at risk of serious financial implications should the tenant become aware and lodge a Tenancy Tribunal application against you.  A Dunedin Landlord recently discovered this to his detriment.  The Landlord concerned had lived in the property and then rented it.  A dispute developed between the landlord and tenant which resulted in the tenant lodging a Tenancy Tribunal (TT) application against the Landlord for renting an unconsented residential property.  The Tenancy Tribunal found in favour of the tenant and ordered that the Landlord repay ALL of the rent the tenant had paid (approximately $10,000).  Thankfully this wasn’t a property we manage, but in the last month we have had to deal with two separate issues involving unconsented building work.  Be warned, the law is very clear in this area.  A property which does not have code of complicate sign off does not meet the requirements of the Residential Tenancies Act and cannot lawfully be rented to a tenant.  Any rent paid by a tenant will almost certainly be awarded back to the tenant along with the possibility of exemplary damages. 

Profession processes beat DIY processes day in – day out.  An Invercargill landlord has been ordered to pay in excess of $38,000 dollars in exemplary damages for failing to lodge rental property bonds with MBIE.  This is a big NO-NO and it’s amazing the number of times we come across bonds that haven’t been lodged within the required timeframe when we take over the management of rental properties from private Landlords.  Gone are the days when a private Landlord (or Property Manager for that matter) would receive a light dressing down from the Tribunal and be sent on their way for none compliance with the Residential Tenancies Act.  At Propertyscouts we are experts when it comes to the legal requirements around renting properties, and we make sure we have proven best practice procedures in place to ensure compliance.

Election update:   73% of Landlords have said that they will increase rental prices if Labours policies become law after this year’s elections.  The introduction of a capital gains tax for Landlords seemed to be the biggest concern.  Labour are also proposing abolishing tenant letting fees.  At last week’s Propertyscouts NZ conference, David Faulkener, a leading NZ investment commentator, said that this would result in increased costs to landlords which would flow on to increased rents for tenants.  Labour will also aim to introduce minimum standards for rental properties, probably by way of a rental WOF.  This probably isn’t such a great concern provided a pragmatic and sensible approach is taken.  The idea of setting a minimum indoor temperature for a rental property is however, in our view, totally unrealistic.    

Propertyscouts 2017 NZ conference:  This year’s conference was held in Wellington.  We had a full turn out from each of the franchises throughout NZ (ten in total now) and were lucky to hear presentations from a wide range of industry experts.  As a result leading up to this year’s general elections we could sum up the present situation in property management as being ‘FLUID’ – but don’t panic, one of the presenters told us that 87% of the day to day issues we Kiwis are stressing about never come to fruition!  Phew that’s a relief… now where did I leave my election voting form J.

FAQ:

Q:  When is a boarding house not a boarding house? 

A:  The Residential Tenancies Act states that a property which caters for a minimum of 6 tenants is deemed to be a boarding house.  The rules around tenancy agreements for boarding houses are quite different than they are for ‘normal’ residential properties.  For example fixed term tenancies are not permitted and a boarding house tenant only has to give 48 hours’ notice of his/her intention to vacate.  The intent of the Act with regard to boarding houses was to protect a venerable section of society who often tend to live in these types of accommodation.  Of course the problem is, the way the Act has been worded a lot of properties (such as student rental properties) fall under the ambit of the Act. 

Insulation reminder:  2019 is just around the corner and we have already started hearing reports of insulation prices increasing.  If your rental is not fully insulated by the time its compulsory then it will probably cost you twice as much.  Get in and get it done now before the price rises.

New Propertyscouts franchises:  We are really pleased to announce that Stuart and Courtney Belgrave will be starting their Propertyscouts franchise in New Plymouth within the next couple of weeks.  They are a lovely couple.  Stuart has recently left the Police and will be working in the Propertyscouts business fulltime, assisted by Courtney on a part-time basis to begin with.  If you know of anyone looking for a property manager in New Plymouth then look no further.  Watch this space for an announcement on a Christchurch Propertyscouts franchise by the end of the year.  Our aim of being the most trusted and recognised name in property management in NZ continues to become more and more realistic and the benefits to our landlords of a true NZ wide network are very identifiable. 

Disclaimer:  Given the opinions expressed in parts of this email it’s important that we make it clear that the contents of this email are opinions and observations and made in good faith.  We suggest that in all cases independent legal and financial advice is sought.  

 

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