Ray White Warkworth
Investor Gate Property Management Report - April Issue
April has been quite a busy month for our property managers and rental department. Inquiry has been up and a lot of tenants have been looking for properties, although they are being very selective and many are wanting to negotiate on the weekly rental figure.
Lower priced rentals are being let very easily while the more expensive properties are often having to ‘sit’ a little longer. Obviously, a sign of the country’s domestic economy.
Numbers:
Total Lets 30
New Managements added April 4
Handy Hint
The Residential Tenancies Act states that tenants, when they vacate, should leave the property “in a reasonably clean and reasonably tidy state”. The interpretation of what is ‘reasonably clean and tidy’ is very broad and often depends on whether you are the owner, property manager or the tenant. The Tenancy Tribunal, if the matter gets that far, is fairly liberal with its interpretation and probably has a far lower expectation than a property owner. Property managers, unfortunately have to work with the knowledge of the Tribunal’s history of rulings and compromise as much as they can and sometimes more than they would like to.
Our recommendation, to keep these problems to a minimum, is for the property to be given a good ‘spruce-up’ at the end of each second tenancy, at least. This should involve commercial cleaners (generally costing well below a week’s rental) going right through the dwelling and, if necessary, contractors tidying up chipped paint etc. or any other minor cosmetic touch-ups.
Renters Trying Scams By Bridget Jones (NZ Herald)
New Zealand's real estate institute is advising property managers to double check prospective tenants after some would-be renters have lied about being from Christchurch in order to queue-jump in competitive rental markets.
Some institute members have been approached by people who claim to have left damaged buildings in Christchurch, but standard pre-tenancy checks have revealed that to be a lie and, in some cases, the applicant had never lived in Christchurch.
Institute chief executive Helen O'Sullivan said it was not unusual for this type of thing to happen in the wake of an event like last month's quake. "They are looking for priority consideration for rentals. But you get that kind of stuff every time. New Zealanders are generally being extremely compassionate about what the people of Christchurch are facing, but every now and then you do get people trying to take advantage of that."
The institute issued a reminder to its members to be vigilant when carrying out checks on prospective tenants.
A Week’s Notice Breaks the Rules
Rent increases must adhere to tenancy act regulations. By Diana Clement (NZ Herald)
If your landlord says he’s going to put the rent up, is that legal? And how much is too much? These are questions many tenants ask.
There are rules in the Residential Tenancies Act about when landlords can increase rents and about excessive rents. Stories abound on online forums about landlords giving tenants one week’s notice of a rent increase. They can’t just do that.
If it’s a fixed-term tenancy the rent cannot be increased until the tenancy agreement expires, unless there is a provision in the document to do so. And even if your fixed-term tenancy agreement has a rent increase clause you still need to be given 60 days’ notice in writing and it can only be increased on the specified date. If it is a periodic tenancy then the landlord must give 60 days’ written notice of a rent increase. After that it can’t be increased again within 180 days.
If you think the rent increase is price gouging, or unacceptable, you can apply to the Tenancy Tribunal to have it reduced on the grounds that it isn’t in keeping with market rent. A good starting point to find out the market rent in your area is the Department of Building and Housing’s market rent database at: www.dbh.govt.nz/market-rent.
Determining the correct market rent isn’t exact science. The DBH tables show the median rent for an area. You might rent a property that is better or worse than the median. So don’t expect to argue that your property should be charged at the median rate and no more.
Nor is there a fixed percentage or amount that the rent can or can’t be increased by, says Jeff Montgomery the DBH’s manager client services group. What matters is comparable tenancies in the locality or similar locations.
For a claim against excessive rent to succeed at the Tenancy Tribunal, the amount your landlord charges must exceed market rent by “a substantial amount”. If you have a fixed-term tenancy you need to make the application to the tribunal within three months of the start of the tenancy or the last rent review.
Tribunal orders can be for a specific period of time in the case of a fixed-term agreement, or six months or less for a periodic tenancy. Attempting to obtain more rent during these periods is an unlawful act. After the period expires the landlord can increase the rent again providing he follows the correct procedure.
The RTA specifies that whether the rent is fair or not has nothing to do with the personal circumstances of the landlord or tenant. Losing your income or having personal problems isn’t a reason for your rent to be reviewed.
Flooring Options
For landlords—carpet or vinyl, wood or tiles?
Choosing the right floor coverings for a rental property is really important. Landlords need to get it right or it will cost them in the long run, says Mark Trafford of renovation and maintenance company Maintain to Profit.
Poor quality or worn-out floor coverings are a turn-off for potential tenants and need cleaning and replacing too frequently. When buying carpets for a rental, approach the purchase in a different way to what you would if it was your own home.
Many property managers recommend choosing darker-coloured carpet for a rental - they’re easier to clean and better at hiding stains. It is possible to buy second-hand carpet which helps keep costs down. These may be hard-wearing commercial carpets from a commercial premises. Another way to save is to go for discounted ends of rolls and deleted carpet lines and vinyl.
Not everyone agrees with this approach. Trafford, whose company has renovated more than 200 properties for landlords and property traders, warns that it can be difficult to match off-cuts when another room needs its carpet replaced. Having different carpets in different rooms reduces the property’s appeal.
Trafford believes it’s important not to cut corners on carpets and advises investors and landlords to get carpet from Irvine International because they are wider than most, meaning fewer joins and less potential for wear and tear, because the yarn is solution-dyed and has super UV fade and stain resistance.
“It is rot-proof, shrink-proof, odour-proof with excellent fire ratings and extra heavy duty residential rating,” says Trafford. “You can spill a bottle of red wine on it and mop it up. It doesn’t stain.” Trafford recommends landlords use quality polypropylene carpets, but traders looking to do up and on sell properties should consider wool, which is more appealing to home owners.
Laminates, tiles and polished wooden floors are other options. Trafford doesn’t recommend laminates for rental properties because they are susceptible to water damage. Tiles are good in wet areas providing they are laid well by a professional, he says.
Sanding and polishing wooden floors costs about the same as buying and laying a mid-range carpet, he adds. Polished floors are good for areas other than bedrooms. They are, however, susceptible to damage from furniture being dragged or stiletto heels.
Trafford says most linos and vinyls are good, but you get what you pay for in terms of quality and thickness and, consequently, wearability. Vinyl is of course easier to clean and usually cheaper to replace than carpet. But unless you’re offering a real bottom-end property for rent, tenants usually expect some carpet in lounges and bedrooms.
Tribunal May Not Have Final Say
Not all decisions can be contested but others can be taken to court
Online forums are full of disgruntled tenants and landlords bemoaning Tenancy Tribunal decisions. You can appeal, although appeals are rare.
If you are not happy with a tribunal decision here are some steps you can take.
The first is to apply for a re-hearing, which is possible if one of these occurred:
- You didn’t receive a notice of hearing for the tribunal and feel you didn’t get your say.
- If you believe there was a procedural problem with your original hearing and a “substantial wrong or miscarriage of justice has occurred”.
If you simply don’t like the decision you can appeal to the District Court.
You can appeal against:
- An interim order made by the tribunal.
- If the order from the tribunal is for an amount less than $1000.
The appeal needs to be lodged within 10 working days from the date of the tribunal order, so it doesn’t pay to delay over what you consider to be an unfair decision.
Tenants can’t appeal against an order terminating the tenancy for non-payment of rent and they can’t get a stay of proceedings unless they can produce evidence that the rent wasn’t in arrears at the date of the tribunal hearing.
The District Court has the power to quash the original order and require a re-hearing by the tribunal, quash the original order and issue a replacement, or dismiss the appeal.
Bernard Parker, of Quinovic Property Management, says the big problem with appealing against tribunal decisions is that unlike the tribunal, where parties are not represented by lawyers, you incur legal costs in the District Court.
Wayne Newall, national manager of tribunals for the Ministry of Justice, says that of the 22,000 decisions made each year by the tribunal, about 85 are appealed against and about 70 per cent are dismissed.
That means only about 20 to 25 tribunal decisions in the year are successfully appealed against at the District Court. A small number then go on to the High Court or Court of Appeal.
For example, tenant Philip Joseph Fava took a tribunal decision to the District Court and then the Court of Appeal. Decisions such as this can be read on the Ministry of Justice’s judicial decisions website.
To lodge an appeal it is necessary to complete a “notice of appeal to District Court”, which can be found in section 117(5) of the Residential Tenancies Act. It is possible to access the form on line. Ring your nearest district court or tenancy tribunal for the website address. The form must be filed with the District Court. And a copy of the notice of the appeal must be sent to the other party.
New Standard on Lift Etiquette - Standards New Zealand issued this press release in early April
Standards New Zealand has initiated a new Standard to govern the way in which people behave in and around lifts. The Standard will specify appropriate queuing behaviour and right-of-way rules for those entering and exiting lifts, and - most importantly - define appropriate behaviour when actually travelling in lifts.
“Standards NZ has become aware of concerns amongst the general public about an increasing tendency for rudeness that seems to be triggered by close proximity in lifts,” said Rob Steele, Chief Executive of Standards NZ.
“New Zealanders seem to become downright unfriendly when entering lifts. For some reason Kiwis do not converse with others in lifts. And they seem to be almost paranoid about maintaining equal space between themselves and all other lift occupants.” Lift occupants also typically face the door of the lift rather than look at each other, he says. These problems are said to be worse in larger New Zealand cities.
The new Standard will require those queuing for lifts to actively engage in conversation and to maintain that conversation when travelling in the lift. To facilitate this interaction, people will be required to stand in a circle facing the middle of the lift. Although the committee responsible for developing the Standard was considering requiring those leaving the lift to say “Have a nice day” they concluded this may have been a bit over the top.
Contact Details and Address for Service
The Christchurch earthquake was a reminder about the importance of keeping up-to-date contact details and addresses for service for landlords and tenants.
Email and text messaging has proven to be invaluable during this emergency. Remember, provided an email address has been supplied as an address for service, it can be used to serve notices.
Make Your Rental Property Fire Safe
Installing smoke alarms protects lives and protects your asset.
For 80% of house fires attended last year, smoke alarms were not installed or not working. Most deaths occur when people are sleeping and can’t smell the smoke. A recent example was the tragic death of a two-year-old child who died in a house fire. The rented property did not have any smoke alarms.
Long-life photoelectric smoke alarms are recommended by the Fire Service and are best installed in every bedroom, living area and hallway in the house, on every level.
For more information on smoke alarms and where to install them go to the New Zealand Fire Service website— www.fire.org.nz
Recent Rentals
DBH = Department of Building and Housing - 1/10/10 - 31/03/11
| |
Snells Beach |
Warkworth |
Omaha |
Point Wells |
Mangawhai Heads |
|---|---|---|---|---|---|
|
3 bedroom, single garage, sea views |
4 bedroom, single garage, large section |
2 bedroom, executive, estuary side, no garage |
5 bedroom, 2x garage, waterfront |
3 bedroom, great views, walk to shops |
|
| Our Figure (per week) | $330 | $410 | $450 | $600 | $240 |
| DBH Statistics Median Price | $330 | $400 | N/A | N/A | $240 |
| |
Orewa |
Red Beach |
Orewa |
Dairy Flat |
Mangawhai (Rural) |
|
1 bedroom, 1 bathroom, single garage |
4 bedrooms, 2 bathrooms, double garage |
3 bedroom, 3 bathroom, double garage |
3 bedrooms, 1 bathroom, single garage |
3 bedroom, vast rural & ocean views, refurbished |
|
| Our Figure (per week) | $340 | $480 | $475 | $395 | $302 |
| DBH Statistics Median Price | $300 | $452 | $450 | $400 | $280 |
Disclaimer
In preparing this document we have used our best endeavors to ensure the accuracy of all the information provided. We accept no liability or responsibility for any errors or inaccuracies and recommend that all recipients make their own enquiries to verify any information given.