Honesty the best policy
Why do rubbish disposal costs vary around the country? Susan Edmunds reports.
Q. We are planning to put our property on the market in January. It’s an older home and we have done a bit of DIY renovation over the years to help the house fit our family. My brother is a builder so we didn’t think we needed to get the council involved on compliance when we built a playroom for the kids in the garage, but now my wife is a bit concerned that this is going to come back to bite us. We are also a bit worried about subsidence on part of the property, which gets worse after heavy rain. But we really want this sale to go through without any hassles because we’re starting to build a new property early in the new year. Can we take the approach that if they don’t ask we don’t have to tell?
A. You’re not the first sellers who have questioned their obligations to potential buyers. I’m glad you’re thinking about it before you put the house on the market rather than feeling bad after the sale and purchase agreement has been signed.
The real risks that you need to consider are the sale failing at the last minute as these matters come out, or (even worse), you are taken to a Disputes Tribunal or court for not being upfront about any issues.
Research by the Real Estate Authority has uncovered that many people have a very relaxed approach to disclosure when they’re selling. Some people justify not coming clean about the property because they think the onus is on the buyer to do their homework. They reckon that if they can get away with it then it’s okay not to tell the full truth. They can rationalise not disclosing everything because they believe that successfully selling their property is the only thing that matters.
The need to sell, and to get a good price, is sometimes seen to far outweigh the need to disclose all accurate information.
‘‘We didn’t want anyone to not buy our house is what it comes down to,’’ one respondent said.
‘‘We didn’t want to open up a potential problem . . . yeah, so completely selfish.’’
If, like most New Zealanders, you are selling with a licensed real estate agent, they will play an important role here. When you sign an agency agreement (the legally binding document that sets out the contract between you and the real estate agency) you are asked to disclose any known defects. If you tell the agent about a significant problem with a property but ask them not to tell anyone else, they may need to cancel the agreement and walk away.
When you’re talking to an agent about selling, the best course of action is to tell them everything you know about the property, no matter how small you think it is. They’re the experts and their professional reputation is at stake if they mislead a buyer. If you’re still not sure what to disclose, the real test is to put yourself in a potential buyer’s shoes. If you were them, would you want to know about unconsented building work, potential leaks or unstable ground?
In an ideal world, every potential buyer will do all the necessary research about a property (we recommend on settled.govt.nz) because the consequences of not doing so are very real. But sellers must fulfill their responsibilities too. If you don’t, the best you can hope for is that any serious problems will be uncovered by due diligence and you’ll look like a bit of a fool. The buyer will either then walk away or begin negotiations that take these defects into account.
At worst, if the sale goes through and the buyer then discovers that they’ve been sold a lemon, you may end up in the Disputes Tribunal or court. Neither scenario will leave you feeling very positive about the experience and it could have a negative impact on your future.
If you’re upfront with your real estate agent about everything (and you talk to the council about getting any additions or alterations certified), you’ll be on a surer footing when it comes to negotiating with potential buyers. It might seem unfashionable in the era of fake news, but honesty is always the best policy.
Kevin Lampen-Smith is the chief executive of the Real Estate Authority (REA), the independent government agency that regulates the New Zealand real estate industry. If you have a question about buying or selling property, send it to susan.edmunds@stuff.co.nz. For independent guidance and information on buying or selling, check out settled.govt.nz.
For some New Zealanders, rubbish disposal doesn’t take a second thought. You put your bin out on the street each week or each fortnight, and someone comes and clears it away.
But in other parts of the country, getting rid of your waste is a much more complicated exercise. There’s bags to buy or bins to hire, or even rubbish tags to place on council-supplied bins, just to mix it up.
We set out to compare the cost of rubbish around the country and ask: Why the difference?
First – it turned out not to be an easy task, as it is difficult to make clear comparisons. A ‘‘rubbish bag’’ varies in size around the country – either 40 litres or 60 litres can be standard, and rubbish bins can be 120 litres, 140 litres or 240 litres, typically.
But let’s have a go. Auckland is perhaps the most confusing of all the regions, but a good example of the varying approaches taken to waste around the country.
All Auckland ratepayers pay a basic rate of $100.39 a year, including GST, for ‘‘waste services’’.
In the former Auckland City and Manukau City parts of Auckland, collections are ‘‘free’’ beyond that because those households also pay a targeted refuse collection rate of $123.78 a year, which gives them a 120L bin. They can opt to upgrade to a 240L bin for an extra $58.18 a year.
The rest of Auckland is on ‘‘pay as you throw’’. Rubbish tags are purchased from local supermarkets and other outlets and then attached to kerbside refuse wheelie bins.
Wheelie bins are available in three different sizes – 80, 120, and 240 litres. The bin tags cost $2.60, $3.80, and $5.50 respectively. In these areas, Auckland Council is only one of the options that households can use for rubbish removal, as other commercial operators also provide services in these areas (and, some residents would say, provide a better service).
It is planned that all Aucklanders will be using this systems by 2021, as part of the council’s move to standardise rubbish collection. And yes, there is nothing to stop someone swiping your paid-for tag; but some have found creative ways of dealing with the issue.
In Wellington, rubbish is completely user-pays – households pay $2.80 for a standard bag, or $1.80 for a small bag and can also hire a bin that’s collected weekly, for a fee. Council provides a recycling service.
In Christchurch, $33 a year from the household’s rates goes on rubbish collection. There is also a targeted rate of $146.24 for ‘‘waste minimisation’’, which covers recycling and organic rubbish.
In the Coromandel district, households pay between $100 and $117 as a targeted rate, depending on where in the region they are.
Whangarei and Dunedin pay per bag – in Whangarei it’s $2.80, in Dunedin it’s $3 for a 45-litre bag or $3.20 for a 65-litre. Up north, you can also hire a wheelie bin that’s collected weekly for up to about $250 a year.
Brad Olsen, an economist at Infometrics, said there were a number of reasons why the cost of rubbish would vary around the country.
One of the most important was the cost of getting rubbish to the facility, he said.
‘‘Some rubbish is moved to a dump within the local area, and other places sometimes ship their rubbish outside their area. Another reason is the cost of maintaining the rubbish facility – there’s a big focus on ensuring that rubbish sites don’t leach into the local environment, so depending on the dump site, it may be more expensive to maintain and keep sufficient barriers between the rubbish and the local environment.’’
There would be an element of general cost recovery, too.
‘‘A larger area and/or a new dump site would increase prices in some areas, as the coverage, or install cost for a new site, would push council costs up, and hence push up rubbish prices. One other difference might be whether the dump site attracts the government waste levy. Those sites which doesn’t attract the fee would likely be quite a bit cheaper at times.’’
He said some councils might try to encourage people to use less rubbish by charging more.
‘‘However, from what I’ve heard, it seems like any difference in price due to incentivising people to reduce rubbish volumes just sees the rubbish shipped elsewhere.’’
In some cases, pay-as-you-throw systems have led to increased illegal rubbish dumping. Earlier this year, Auckland Mayor Phil Goff announced a crackdown on people dumping rubbish illegally because ‘‘they are too bloody lazy or too bloody tight’’ to pay disposal fees in areas where rates do not cover the cost.
Goff committed an additional $200,000 to manage the issue, which
In Auckland, cleaning up illegal dumping costs almost $1 million a year.
included increased surveillance and investigations.
Illegal rubbish dumping has been a longstanding problem for Auckland, with clean-up costs increasing to almost $1 million a year. However, the discovery in January of 28 steel drums dumped in the ecologically sensitive Waita¯ kere Ranges raised the profile of the issue.
Possible changes could also see businesses picking up more of the cost of managing rubbish.
Associate Environment Minister Eugenie Sage has flagged a potential increase in the waste disposal levy at landfills.
New Zealand has more than 420 known landfills and the government’s waste disposal levy applies to only 11 per cent of them – largely the metropolitan landfills accepting household waste – and it applies to only an estimated 30 per cent of the waste stream.
‘‘According to surveys done in Auckland, construction and demolition waste accounts for an estimated 85 per cent of the waste stream. Yet the levy applies to very few landfills where this material ends up. The levy needs to be applied to more landfills so that it provides an incentive to encourage materials recovery and divert waste from landfill.’’
Sage said that when the Waste Minimisation Act was introduced in 2008, it was intended that the levy would rise.
‘‘However, nearly a decade later the levy remains set at the introductory price of $10 a tonne. We will consult with the public about the levy expansion and any potential increases next year. The levy currently generates around $30 million annually.
‘‘Half of that goes to councils to help them fund their waste minimisation activities. The balance goes into the Waste Minimisation Fund and its grant scheme to help progressive businesses and community organisations reduce waste.’’