Squeeze on rentals

Ray White Whanga­mata prop­erty man­agers Chris­tine Fletcher and Tr­ish Mor­ri­son say they have a huge list of po­ten­tial renters. Mean­while one land­lord is sell­ing up ahead of pro­posed reg­u­la­tions the Govern­ment wants to im­ple­ment.

Coastal News - - Front Page - By ALI­SON SMITH [email protected]­news.co.nz ■ In­for­ma­tion about the Act re­form is at www.mbie.govt.nz/rta-re­form

Some land­lords are drop­ping rental prop­er­ties in frus­tra­tion at leg­is­la­tion they say will force them to spend more while los­ing rights and pro­tec­tions for their prop­erty.

Pro­posed leg­is­la­tion will drive up rent and put a fur­ther squeeze on an al­ready crit­i­cal short­age of rental prop­er­ties on the Coro­man­del, say prop­erty man­agers and land­lords. One land­lord with 14 prop­er­ties is sell­ing each of them as the leases end, af­ter 25 years in the busi­ness.

“We’re just wait­ing for ten­ants to move out now. We’ve had enough of it,” says Danny Boeglin, a for­mer Tairua res­i­dent who owns sev­eral flats, units and rental houses in Te Aroha. “We’ve al­ways looked af­ter peo­ple but what the Govern­ment is do­ing now is tak­ing the fi­nan­cial free­dom away over what we want to do with our money. It’s scary.

“If I drove a $200,000 Lam­borgh­ini I would be ner­vous let­ting some­one take it, but we are ex­pected to hand our keys over to a ten­ant, and say ‘I hope it ends on a good note’.”

He says he does not know what rules will be im­posed next.

“I’ve got no prob­lem pro­vid­ing qual­ity homes to ten­ants long-term, but there’s just so much in­ter­fer­ence with it. So far the Govern­ment has been a pretty dis­mal ex­am­ple of how it has looked af­ter their [state] houses.”

Claire Leadbetter, MBIE man­ager ten­ancy and rental hous­ing qual­ity, says ob­jec­tives of the Govern­ment’s re­form of the Res­i­den­tial Te­nan­cies Act­in­clude pro­mot­ing good-faith re­la­tion­ships in rent­ing, and en­sur­ing there are ap­pro­pri­ate pro­tec­tions land­lords.

Pro­pos­als are open for com­ment un­til Oc­to­ber 21. Any changes are likely to come into force in 2020. Among the pro­pos­als are:

■ De­mand­ing spe­cific and jus­ti­fi­able cri­te­ria for a land­lord to ter­mi­nate te­nan­cies.

■ Set­ting the amount of no­tice a land­lord needs to give to ter­mi­nate a ten­ancy to 90 days un­der all cir­cum­stances.

■ If a ten­ant con­sid­ers their rent sub­stan­tially ex­ceeds mar­ket rates they can ap­ply to the Ten­ancy Tri­bunal for an or­der re­duc­ing the rent.

■ Tak­ing away a land­lord’s right to say no to pets.

■ Healthy homes stan­dards will set min­i­mum re­quire­ments for heat­ing, in­su­la­tion, ven­ti­la­tion, mois­ture and drainage, and draught stop­ping in res­i­den­tial rental prop­er­ties.

Whanga­matā Ray White prop­erty man­ager Tr­ish Moris­son says land­lords need to be aware the law is com­ing down heav­ily on the side of the ten­ants and if peo­ple do the wrong thing, they can be forced to pay all their rent back or be fined.

“A lot of this leg­is­la­tion is wellmean­ing but it isn’t thought through. It will come at a big cost to land­lords. The whole thing is quite com­plex and be­com­ing more com­plex with ev­ery new rule that comes out. Think care­fully about rent­ing out your prop­erty, be­cause there are lot of pit­falls you can get into and it’s quite dan­ger­ous.”

The av­er­age rent has dou­bled in 12 years and Whi­tianga is more ex­pen­sive than Whanga­matā. Rent rises are pre­dicted as land­lords are faced with meet­ing ad­di­tional costs on heat­ing, in­su­la­tion, get­ting un­per­mit­ted work signed off with coun­cil, in­creased in­sur­ance and meth test­ing costs, and los­ing the right to ban pets.

“Ev­ery week there’s a new thing they would have to be aware of as prop­erty man­agers,” says Mrs Moris­son.“We’ve got ten­ants who have been in a prop­erty for five or six years and they are a de­light but if we get one rogue, we have to watch them care­fully, be­cause a rogue ten­ant can cause a land­lord a lot of cost.

“Even though peo­ple are say­ing for them the rents are high, ac­tu­ally for the value of the prop­erty, the rate of re­turn in Whanga­mata¯ [and the Coro­man­del] is quite low. Some peo­ple pre­fer leav­ing it empty than risk hav­ing ten­ants that will trash it.”

She says costs in­clude:

■ Pay­ing for meth test­ing be­fore each ten­ant moves in to pro­tect them­selves against con­tam­i­na­tion costs.

■ Work must be per­mit­ted or land­lords risk los­ing all rent.

■ Land­lords can be fined heav­ily over in­su­la­tion.

■ Split­ting power bills will be il­le­gal, and charg­ing a ten­ant more to cover win­ter use when charg­ing a set fee.

■ In­sur­ance not be­ing valid when proof of three-monthly main­te­nance checks isn’t shown.

Last week’s Coastal News fea­tured a crit­i­cal rental short­age.

The num­ber of rental prop­er­ties could re­duce un­der re­forms.

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