Monthly Landlord Newsletters

 

Welcome back to the Propertyscouts Monthly Landlord Newsletter, where we update you on all things New Zealand property market, investor insights, seasonal reminders, and more.

Cabins and Sleepouts on Rental Properties - What Landlords Need to Know

We had a call the other day from one of our investor clients. They’d found a potential property to buy.  It was a three bedroom house plus a cabin out the back – about 12m² – and wanted to know if that meant they could market it as a four bedroom rental.

On the face of it, it sounds tempting. Slap “four bedrooms” on the ad and hey presto – more rent, right? Well, not so fast. A cabin only counts if it’s fully lawful and compliant. That means it has to tick all the boring but essential boxes: built to the Building Code, insulated, ventilated, dry, safe exit, smoke alarm, the lot.

If it doesn’t? Then the cabin isn’t a legit bedroom. In fact, it’s not really anything from a tenancy point of view. You can’t legally include a cabin as part of the “habitable spaces” of a rental at all – not a rumpus room, not a study, not even a place to stick the teenager. It’s just a shed with nicer curtains.

So in this case, we had to burst the bubble and explain that unless the cabin passed muster, it was still a three bedroom property. Our advice to any landlord looking at a place with a “bonus” cabin is simple: do your homework first. If the cabin stacks up, great – you’ve got an asset. If not, treat it like it’s not there.

For those curious, we’ve put together a quick checklist of what makes a cabin compliant – you can find it here

The Latest Ask An Expert from Within the NZ Property Investor Magazine

Propertyscouts is a designated property management expert in the popular magazine - NZ Property Investor. Our Managing Director, Ryan Weir, recently entered a response to their recent 'Expert Advice Q&A'. Read our November entry below:

Question: My tenant was recently arrested for drug dealing and is now in custody. Prior to this I had already served a termination notice and the tenancy is due to end in a couple of months. I’ve been in contact with their barrister who has said it’s unlikely the tenant will be bailed back to the property – they’re likely to remain on remand and eventually receive a prison sentence. So, it’s looking very likely the tenant won’t return to collect their belongings before the tenancy ends. What should I do if there’s still a house full of stuff when I take possession?

Answer: This is one of those situations where planning ahead will save you a lot of headaches down the track. The Residential Tenancies Act (RTA) sets out a clear process for dealing with abandoned goods, even in circumstances like this.

You have two options:

1. The safer approach is to file an application with the Tenancy Tribunal now (under section 62B of the RTA), asking for an order authorising disposal of any goods left behind. Filing now gets you into the queue early, though if the Tribunal can’t serve the tenant due to them being in custody, the application might get delayed or parked. This is the recommended path, as it gives you the strongest legal footing if your actions are ever questioned later.

2. The self-assessment approach allows you to make a call yourself. If you assess the goods and reasonably believe they’re worth less than the cost to store, transport and sell, you’re allowed to dispose of them immediately under section 62A. If they’re worth more, you store them offsite for 35 days before selling.

A very good first step - before any disposal decisions are made - is to try contacting the tenant’s family to see if they’re willing to collect the belongings. This shows you’re taking reasonable steps to preserve the tenant’s interests, and often results in a faster and cleaner outcome.

One word of caution: don’t overestimate the value of household contents. I recently cleared out a fully furnished 8 bedroom house and, after selling 34 items, only netted $2,500. Unless there are vehicles or high value items, most contents aren’t worth much.

Be aware that personal documents must not be discarded. These need to be securely stored and handed to the Police if the tenant doesn’t collect them.

Whatever route you take, documentation is your safety net. Take photos, document valuations (supported by Trade Me listings), estimate disposal costs, and keep records of any attempts you’ve made to contact family. Having a solid paper trail will protect you if your actions are ever challenged.

Meth Rules, Finally With Numbers

After years of guesswork, panic, and landlord headaches, the saga of meth in NZ rentals is finally getting a little clarity. 

Now, thanks to the Ministry of Housing and Urban Development, we have two numbers to remember: 15 and 30.

• 15 micrograms per 100cm² - the new bright line between “clean enough” and “needs work.”

• 30 micrograms per 100cm² - the red flag. Exceed this, and section 59B of the RTA kicks in, giving tenants or landlords the right to walk away from the tenancy with short notice (2 or 7 days).

While the new limits have been confirmed, they won’t become operative until around 2026.

Want the full lowdown on meth rules and what they mean for your properties? Read the full article here

Quote to Ponder

“The secret of getting ahead is getting started.” - Mark Twain

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Disclaimer

Given the opinions expressed in parts of the email, it’s important that we make it clear that the contents are opinions and observations and made in good faith.  

Propertyscouts NZ (2020) Limited, trading as Propertyscouts, and its associated parties (including directors, agents, employees, officers or otherwise) have attempted to provide   this information to the best of their ability but do not make any representations or warranties of any nature (intended or implied) as to the accuracy of the information on this communication. All recipients of this communication should conduct and rely on their own enquiries in relation to the information on this communication.

The information available on the properties listed for sale, rent or otherwise, has been obtained from the vendor or landlord of the property and the appropriate professional service providers. We do not and cannot verify or guarantee the accuracy of the information obtained in relation to the properties.

The information and/or materials available in this communication are intended to be general information only and may be changed at any time, without notice to you. The information and/or materials in this communication should not be relied on under any circumstances as a substitute for legal, financial, real estate, or other professional and/or expert advice. To the maximum extent permitted by law, Propertyscouts and its associated parties disclaim all liability, responsibility, and negligence for any direct or indirect loss or damage suffered by any person arising from the information and/or materials presented in this communication or any information and/or materials that arise from it.