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.
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.