In The Know - Property Management
20 November 2019
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Key Update: Proposed changes to the Residential Tenancies Act 1986
The Government has announced a suite of proposed changes to the Residential Tenancies Act 1986 (RTA). PLEASE NOTE: The proposed changes are not law yet and are still subject to change.
The proposed changes will be drafted into a Bill to amend the RTA which will be introduced in the first half of 2020. REINZ will file a submission on the Bill, once it is released for public consultation. REINZ will request to appear before the Select Committee to ensure that the view of our members is heard.
The key proposed changes include:
- Limiting rent increases to once every 12 months instead of once every six months
- Banning rental bidding
- Ending no cause terminations to end a periodic tenancy agreement. Currently, periodic tenancy agreements can be terminated without cause as long as the landlord gives 90 days’ notice. The RTA will now have a list of reasons for termination which will include new provisions to respond to antisocial behaviour
- Landlords will need to give tenants 63 days’ notice if the property is to be vacated for family use, and 90 days if the property has been sold. This is an increase from the current 42 days’ notice
- Increase in financial penalties and providing the Tenancy Compliance and Investigation team with new tools to take direct action against parties who are not meeting their obligations
- Require fixed term tenancy agreements to become periodic tenancy agreements upon expiry unless: both parties agree otherwise, the tenant is not meeting their obligation or specified grounds for the tenancy to end apply
- Anonymising complaints to the Tenancy Tribunal where a party has been wholly or substantially successful when taking a case to the Tenancy Tribunal
- Allowing tenants to add minor fittings such as brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells, install washing machines and dishwashers and hang pictures.
Remember the proposed changes are not yet final and we will be given the opportunity to comment on them again with the guidance of industry feedback, once the Bill is released for consultation.
Case Update: Landlord refused to replace broken heat pump
The tenants in this case claimed that the landlord refused to replace the broken heat pump.
Law:
Under section 45 of the Residential Tenancies Act 1986, a landlord must provide and maintain the premises in a reasonable state of repair.
The landlord’s obligation is to maintain the premises with all features and systems in good working order. This applies to any appliance that was part of the tenancy at the time the tenancy agreement was concluded.
What happened?
The tenancy began on 3 February 2019 with a functioning heat pump which was heating most of the rooms in the property.
The tenants discovered that the heat pump was no longer working and notified the landlord on 7 April 2019 and requested that the heat pump be repaired.
The landlord informed the tenants that the heat pump could not be repaired, and the replacement cost was an estimated $7,500. The Tenancy Tribunal acknowledged that this was a significant cost and could understand why the landlord hesitated to make the unplanned outlay. The tenants also understood the costs to replace the heat pump were high and found a replacement unit at a cheaper price however, the landlord later decided the cost was “prohibitive and refused” to replace the heat pump.
The landlord then supplied two 2400-watt radiant fan heaters.
The dispute continued and the tenants applied to the Tribunal for compensation and exemplary damages claiming that the landlord committed an unlawful act.
The Tribunal stated that the heat pump was an important asset and it was designed to give good heat output and the cost to run the heat pump was lesser than other forms of heating.
The Tribunal found that the landlord’s refusal to replace the heat pump was an unlawful act. The landlord intentionally failed to maintain the heat pump. The effect of the failure was that the tenants lost a major feature of their rental property during winter. The continuation of the disputed affected the tenants’ enjoyment of the premises as well. The tenants were in a powerless position and therefore, exemplary damages were ordered as per section 109 of the Act.
The tenants also claimed compensation for the loss of rental value that resulted from a non-functioning heat pump and additional costs for having to heat the house using an alternative means. The Tribunal allowed a reduction in rent to be 7.5% over the 25-week period.
The tenants were also granted compensation for extra charges for power.
Useful tips for tenants at Christmas time
As property managers, the more helpful information you can provide tenants with, the better prepared they can be.
Tenants often go away over the Christmas holidays and leave their homes vacant for a period of time. It can be helpful to remind them how they can prepare for this to avoid any issues that may arise unexpectedly.
Water: Turn the water off at the main, this will limit risk in the event of a burst water pipe, or even a tap being left on accidentally.
Electrical: Unplug smaller electrical appliances (i.e. Christmas lights) to avoid fire risks.
Security: Ensure you have locked all doors and windows to prevent easy access to your home. Do not announce on social media that you are going away and the home will be vacant.
Insurance: Consider your insurance needs, as a tenant you may want to look at Contents Insurance that could cover the cost of the possessions you own, should there be a break in.
Health & Wellbeing Survey
In July we surveyed our members on general aspects of health, wellbeing and workplace performance. Based on general findings we identified a significant number of people were concerned about work/life balance and stress in the workplace. REINZ is currently developing a 6-month programme to help address these, alongside other wellbeing issues, so that you can optimise your performance in 2020.
We need your feedback to help shed more light on the issues identified in our earlier survey and to help shape our new 6-month programme. We’d appreciate you taking some time to complete our survey. You’ll also go into the draw to win a $150 Prezzy Card.
Click here to complete the survey.
Webinars for Property Management
Are you looking for content to keep your property managers up to date: REINZ has developed a series of webinars that you can use to keep yourself informed and up to date with various topics.
Click here to see the webinar packages, including "Property management essentials".
If you have any questions, ask the Education Team
The New Zealand Certificate in Property Management
In order to be flexible and meet your needs we are moving to monthly intakes in 2020! The next intake is 3 February 2020.
Registration and information here or contact Kirstin Brown for more information.
Congratulations!
The following members completed their Property Management Qualification in October: Sarah Chaplin (Vision Real Estate Ltd), Julie Cunningham (PGG Wrightson Real Estate Ltd), Christine Young (Auckland Property Management Solutions) and Warren Young (Auckland Property Management Solutions).
Capital Gains and Rental Yields Report
The Southland region is currently the strongest performing region for investors with residential property with the second highest capital gains and second highest yield according to new research from REINZ.
REINZ Residential Rent Review - October 2019
The REINZ Residential Rent Review for October 2019 is now available and can be read here.
SAVE THE DATE - 2020 REINZ Residential Property Management Conference
Friday 7 August, 2020
Auckland
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
Finding the right tenant - what can I collect?
