Readers respond: Changes to RTA

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Tuesday, February 24th 2009, 10:40PM 2 Comments

by Philip Macalister

In one of the more significant moves for property investors, the government is planning to change to Residential Tenancies Act (RTA). This act is considered the bible of property management and affects everyone, investors, landlords and tenants. What do you think of the proposed RTA amendments?

I have read about the proposed changes to the act and am relieved that the present government is considering amending some of those proposed changes that were unfair to landlords...

Just one thing that I believe the government is now thankfully considering to leave as the status quo: letting fees charged by agents. I endorse the status quo for a number of significant reasons, especially the huge implications it could have on the letting market with regard to landlords, especially in a tenant's market. The issue runs far deeper that a new financial cost to landlords.

Without going into lengthy detail..quite simply, it would dramatically skew the residential rental market and empower letting agents and property managers at the expense of landlords, especially those private landlords such as myself who do all their own letting.

I wish the status quo to remain, without me being 'forced' to enlist the services of a letting agent during a 'rental downturn' in order to find a tenant. Quite simply I would not be able to compete with letting agents and the increasing numbers of private landlords like myself who have come to the realisation that they have to now enlist their services.

I have excellent, stable long-term (fixed-term) tenants and through my selection processes want it to remain that way. That has frequently not been the case when I have enlisted the services of letting agents (and property managers) and I want the freedom of choice to remain.

Were landlords required to pay the letting fee, I would envisage a number of them would exit the market, once the full implications of this change was apparent in the marketplace.

Let's hope the NZPIF is strongly supporting the status quo, and its largely private landlord base, with regard to this proposed amendment..
Regards,
RAG

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I do not agree with the idea that letting agents cannot charge a fee for their services rather than the current situation where tenants usually pay.

Having to pay another letting fee should deter tenants from just up and leaving one place and moving to another one especially if the rental is furnished. In theory people could keep moving round as often as they liked, just transferring their bond as they go.

However, having said that, I believe market conditions will determine whether the tenant or the landlord pays the letting fee. I rely on my letting agent to advise on the response to advertisements for any vacant properties and whether the fee should be negotiable.
BKD

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Having seen the goal posts move rapidly because of Tenancy Tribunal clerks’ differing interpretations of the tenancy act, prompts me to advocate a standard set of rulings for common disputes.

There needs to be standardisation of decisions. From our experience, one clerk will require the tenant to honour the signed contract between the tenant and the landlord, another will require the landlord to carry the weight of costs with tenant being obviously favoured.

A common experience for us has been the condition of a property at the final inspection. Generally the tenant is expected to leave the property in the condition it was in when taking up the tenancy, minus fair wear and tear (the accepted amount of fair wear and tear can be subjective of course dependent on the property manager’s experience).

One tenancy clerk advocated the tenant honour the signed tenancy contract as required under the Contracts Act, the next took the position that the RTA took precedence over all other acts and that the landlord had to bear the majority of costs to bring the property up to the expected condition for new tenancy.

The landlord also had to put in the equivalent of six hours of cleaning per property. We were not sure where this interpretation came from, however that was just one example.

I’m sure there are other investors and property managers out there who have many more and differing examples to share.
DB

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I think the law should be changed to make the landlords less disadvantaged than they are now. Some more equality please.

Ie, max four weeks’ bond, but the tenant has to be three weeks behind before any approach to the tribunal for eviction, and then how long does that take? Maybe the tribunal should pay the weekly rent from the three weeks until the property is re-tenanted, or at least until the current tenant departs.

With four weeks bond, if the tenant is one week behind, then the landlord should be able to give three weeks notice to evict.

Similarly, if damage has been done to the premises, then the tenant should be able to be evicted quickly so that the bond left can cover repairs.
David

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I think tenants who do a runner without paying their rent should be charged with theft – they are in effect stealing the landlord’s money.
Alan

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Landlords should pay for agent finder fees. This means that more renters will go through agents, and landlords can get better quality tenants faster/sooner. Renters are scared off by agent fees.

If a tenant damages property directly/indirectly (or anyone else they allow in the house damages property) the tenant is responsible for the damage and should pay for damages (they can reclaim damages from the person who did it).

What humane system would not want this to happen. Landlords should ensure their houses, tenants should ensure any contents they own. If tenant damages the house, the insurance company pays for it to be fixed and claims it back from the tenant (tenant pays excess).

If the damage does not involve an insurance company, the tenant must pay the landlord.
KT

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In France, tenants have to give a three-month bond, which is closer to covering potential repair costs than the meagre NZ legal bonds.

On the flip (cohesive) side, I would argue that landlords not be allowed to install cheap inefficient appliances into their property under the pretext that tenants will pay the bill.

The country's energy supply is too stretched for that kind of short-sighted nonsense to be tolerated any longer. And for the solar water heating installation grant to be bumped up, for the same reason.
This would actually be a great economy-boosting "infrastructure" item (infrastructure as in: equipment that will be benefiting the country for many years).
CG

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Hope Sue Bradford has a tenant or two to manage, and she has to go through what some of us have been through. Then she'll realise what is fair.
R

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Tenants do a runner, this could be time-consuming and frustrating to chase the money.

From the current system, you can get an order from the Tenancy Tribunal for more than one month. To enforce the order, you need the service address, while if the tenants is a beneficiary or tax payer, you need another one month to find the address.

Since the Department of Justice, the department of Work and Income and Inland Revenue are all government agencies, can’t they exchange the necessary information to enforce the law?
Charles from Howick

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As a tenant in Dunedin and a landlord in Auckland, my experience of property managers has been quite an eye opener.

There is a strong case for a legally enforceable code of conduct for property managers.

I might add I have never been in default in either sector so there is no chip on the shoulder. My view is purely driven from the quality of service provided which could be summed up as the old “she'll be right” maxim and really abysmal.
Peter

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Have your say below - let us know what you think should be in the bill.

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