Take care with water charges: MoBIE
Landlords must be careful if they try to recover new water costs by adding them to the rent they charge, says the Ministry of Business, Innovation and Employment.
Tuesday, August 28th 2012, 12:00AM 
1 Comment
by Susan Edmunds
National industry liaison manager Troy Churton’s comment comes in response to the Auckland Property Investors Association telling its members to pass on to tenants the new annual Watercare fee of $190 per year
President David Whitburn says he is telling members to charge for water and wastewater pro-rated at the 52c per day rate, which is $190 including GST divided by 365 days per year.
Churton said the law did not expressly allow for that.
The Residential Tenancies Act says that landlords are responsible for all charges that exist regardless of whether the property is occupied. He said the Association had “extracted that a bit” to come up with its guidance.
He said some landlords, when they got the chance to increase rent, were taking into account the new charges.
“It’s a subtle difference there, landlords need to be careful they are still getting a fair market rental.”
Allan Galloway, acting deputy chief executive for the Ministry’s building and housing group said landlords must follow the correct process if they wanted to recover charges via rent
“For periodic tenancies, the landlord must give the tenant at least 60 days’ written notice to increase the rent, and the rent cannot be increased within 180 days of the beginning of the tenancy or within 180 days of the last rent increase. Rent can only be increased for fixed-term tenancies where provision for this is written into the tenancy agreement. Rent increases should not be significantly higher than rent charged for other similar properties [in an attempt to incorporate other fixed charges they are responsible for], and if a landlord increases the rent to an excessive level, the tenant could apply to the Tenancy Tribunal to have the rent reduced.”
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As every Landlord in the Watercare area is being charged the $190 then obviously over time every Landlord will seek to recover that cost in increased rent. Thus eventually the 'rent charged for similar properties' will be higher than otherwise would have been the case so you and I can also increase our rents to that level without fear of a TT-imposed reduction.
Do these bureaucrats live in the real world?