Case Update: Property manager with history of failing to lodge bonds, fails to lodge bond again

The tenants in this case claimed that the property manager failed to lodge the bond of $2,040 with the Bond Centre within the required time.

Law:
Section 19 of the Residential Tenancies Act 1986 provides that a landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received.

If this obligation is breached then it may be considered an unlawful act for which the Tenancy Tribunal may award exemplary damages of up to $1,000.

Where a party has committed an unlawful act intentionally, the Tribunal has the power to award exemplary damages, where it is satisfied it would be fair, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party and the public interest (section 109(3)).

What happened?
The bond was paid 7 May 2019 to the property manager who failed to lodge the tenant’s bond.

The tenants confirmed at the hearing that they were not seeking exemplary damages or compensatory damages and still wanted to reside at the property however, either have the bond refunded to enable them to lodge it themselves or have the property manager lodge it.

Finding
The Tribunal made an order advising the property manager that if he failed to lodge the bond within 23 working days then he would be in breach of the order and would be liable for a fine of up to $2,000. The find would be in addition to exemplary damages which would be highly likely if he failed to lodge the bond immediately or refund it in full to the tenants.

Click here for the decision.

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Whangarei Rental Update

REINZ recently spoke with Debbie Beazley, the Business Owner of Optimize Realty Ltd and a member of REINZ, to discuss the Whangarei rental market.

Debbie says the 2019 year has seen the median advertised rent in Whangarei sitting at $450 per week. These increase in rents could be due to the substantial escalation in property prices over the last five years as well as the ongoing requirements around ensuring that rental properties meet the correct compliance standards. We are noticing that most properties should have a rent increase every 180 days in order for the rent to keep up with the current advertised median rent.

Vacancy rates have sat at 1.00% for the past 12 months which is a fair indication that there is not enough accommodation for everybody. Whangarei is still experiencing a housing shortage.

People relocating from around New Zealand or from overseas to Whangarei tend to rent for a period of time and then purchase a property. This is likely due to the increasing work opportunities arising in the area and the increasing infrastructure. According to the 2018 Census, Northland had the largest annual increase of population (3.4%) and the change in population from 2013 - 2018 is more than 15%. Population estimates incorporating 2018 Census results will be available by March 2020. Stats New Zealand reported that Whangarei’s population grew by 2,000 people in 2017 and the bulk of those people were moving into the area from other regions. While this has been great for Whangarei, the building economy has not been able to keep up with the demand for housing, which has contributed to the housing shortage.

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Refresher on the statements required in tenancy agreements

Insulation Statement
The Insulation Statement has been required in tenancy agreements since 1 July 2016 and covers whether there is insulation in the rental home, where it is, what type and what condition it is in, to enable tenants to make informed decisions.

Healthy Homes Statement
Since 1 July 2019, landlords/property managers have been required to include a separately signed statement confirming intention to comply with the healthy homes standards in all new tenancy agreements.

Insurance Statement
The landlord/property manager will be required to provide insurance information in any new tenancy agreement. It will need to include a statement which:

• sets out, for each insurance policy, the amount of each excess that is relevant to the tenant’s liability;
• informs the tenant that a copy of the insurance policy is available to the tenant on request; and
• states that the landlord is not insured, if this is the case.

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SAVE THE DATE - 2020 REINZ Residential Property Management Conference

Friday 7 August, 2020

Auckland

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REINZ Residential Rent Review

The September REINZ Residential Rent Review is now available here.

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Stuck on something? Check out our information sheets!

Click here for our Information Sheets on:

• Insulation
• Healthy Homes Standards
• Privacy Act Guidance
• Asbestos
• Mould and Dampness in rental properties

Keep an eye out for the following Information Sheet that will be coming soon:

• Residential Tenancies Amendment Act 2019

Any questions/suggestions you have, feel free to contact advisory@reinz.co.nz

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Finding the right tenant - what can I collect when someone applies for a tenancy?