Ray White Warkworth
Investor Gate Property Management Newsletter - October Issue
Market Report
The rugby is over and people are starting to move on with their lives again.
It may be difficult for our owner/investors living out of the country to appreciate just how the Rugby World Cup (RWC) captivated the country. Even those not particularly interested in rugby were caught up by dramas both on and off the field.
Our roads were full of vehicles of all shapes, sizes and models with flags flying. Some vehicles, obviously owned by resident migrants, had the New Zealand or All Black flag as well as the national flag of their country of origin. You certainly knew when the Tongan team were heading north to play in Whangarei.
The RWC was a time for New Zealanders to take their minds away from the disasters of Pike River Mine, the Christchurch earthquakes and the grounded Rena, spewing oil and containers along the pristine beaches of the Bay of Plenty. It was forced ‘time-out’, which was great relief for the country. The fact that we so narrowly defeated the French and claimed the cup, along with the title World Champions, was also a huge relief to (most of) the country.
As with the past two months, the rental market has been just cruising along. While activity throughout the area has been fairly slow, it has continued to keep ‘ticking along’, consistently.
October did not have quite the lift in activity that we expected, but that it was on a par with numbers of lettings carried out in October 2010 was reasonably encouraging, considering the country has been a little distracted.
Signing Up Your Tenant 
The most important 20 minutes of the tenancy is when you sign up your tenant
But this is the time to set the standard, to explain the ground rules and prevent future misunderstandings. It is extremely important at this time to go through a standardised checklist, to dot the “i’s and cross the t’s”, to explain how your agency operates and what will and will not be tolerated. You hope to have an enduring relationship with these people. They also look after the property that your client has entrusted to you to manage, that can make your life heaven or hell.
Welcome them and congratulate them on a successful application. It is a renter’s nightmare out there in the market place at the moment. They are probably relieved to have that part of relocation madness ticked off. You are their new best friend. But this friendship will have definite ground rules and now is the time to spell them out.
Explain the Tenancy Agreement and any additional clauses or annexures. This is a legal document, and as such, must be impressed upon them. It confers rights and responsibilities on both parties which can be defended in a court of law. Explain the initial inspection process and its importance. Don’t let it be buried in the bundle of papers they take away, something else to go in the bottom drawer of the kitchen. Impress on them that you require a signed copy for your file and that it will be the definitive document referred to at the end of the tenancy.
Explain your rental payment system and your procedures to handle all breaches of tenancy. Spell it out in clear and simple English—no mincing of words, nothing they can’t understand. Payment of rent confers the right to continue the tenancy. That’s where it all begins or ends.
Explain how, why and when you do regular inspections. Let tenants know the notice period. Also clarify that inspections are allowed for in the Residential Tenancies Act, and that it’s useful if the tenants are there, but not mandatory.
Explain the process to vacate. Always ensure the exit strategy is in place at the beginning. Years ago, I remember being very startled when I phoned a tenant chasing rent to hear that they had vacated the property at the lease end and left the keys in the letterbox! No notice, no communication—no rent either!
You want to be remembered as firm, fair and friendly. It is the beginning of a new relationship.
Facts of Life’ as seen by one humorist
Orewa Office
After a short stint away Abigail Bunker is back assisting Robyn at our Orewa office. Abigail is mainly involved in carrying out the inspections on rental properties and organising any required maintenance. Abigail’s direct dial is 09 427 0275.
Remedies for Runner Tenants
Collate enough information and even an AWOL tenant can be found.
It’s a fact of life, tenants sometimes do runners. If they’re in a fixed-term tenancy and don’t give notice, a landlord is entitled to charge rent and the costs of advertising until another suitable tenant can be found.
The other common case when a tenant “does a runner” is to disappear after they have moved out in the hope of evading the debt. Not all landlords bother to chase.
The best thing to do is to take comprehensive contact information for them in application forms when they move in, says Roger Clist, author of Working Landlord, Happy Tenants. Ask for the name of (a close relative) who owns their own home, if possible. This information is a bit of simple insurance in case they leave owing you money, and you want to find out where they are living.
“I’ve recently proved the help of my own advice. I was successful in a tribunal application in terminating a tenancy where the tenant was in arrears.”
“After moving out, the tenant started paying back a certain amount each week, then the repayments ceased,” says Clist. “I looked up his original application form and a brother’s contact details were given. I phoned the brother … and was given the new address. As a result, repayments have restarted.”
Keeping up-to-date contact information is really useful, adds Scotney Williams of The Tenancy Practice, which carries out debt collecting on behalf of landlords.
There are many ways to track down a tenant who has done a runner. In some cases, landlords can do a bit of sleuthing themselves.
One found his tenant on Facebook which helped him track down the tenant’s place of work. You could also search the electoral roll, white pages, Companies Office database or other publicly available information. Another option is to employ a debt collection agent. Some landlords also place a monitor on a former tenant’s Veda credit record, which will show up new addresses if the person seeks new credit, a new tenancy, or perhaps connections to utilise companies.
If, however, you can’t track down a tenant through these methods the best thing to do is make an application through the District Court’s civil debt enforcement system for a “Confidential Address Request”. If the tenant’s new address is on databases such as WINZ, the Department of Building and Housing, or the Motor Vehicle Register, the court will issue you with a reference number tied to the tenants’ new address, which can be used with other district court enforcement options.
Lies can Lead to Costly Liabilities
Fabrications and exaggerations often end up in the Tenancy Tribunal, Diana Clement (NZ Herald)
A classic case of misrepresentation heard by the Tenancy Tribunal related to a Mr Parsons, who was willing to pay up to $2500 a week for an executive rental in Invercargill.
Parsons was emailed photographs and information about a furnished house by the property manager. He agreed to rent the property sight unseen and paid $60,000 rent in advance and a $10,000 bond.
When Parsons arrived at the house he found that much of the designer furniture depicted in the emailed pictures had been replaced with inferior furnishings. A large dining table and chairs had been replaced with a smaller table with only two long bench seats and no individual chairs.
The adjudicator in that case concluded that the tenancy had been misrepresented to Mr Parsons and that at $2500 a week he should have received the “very best in furnishings, chattels and household utensils”.
The tribunal awarded him $10,000 compensation for the misrepresentation, the breaches in requirements to lodge bond and over the amount of rent that should be paid in advance.
Scotney Williams of the Tenancy Practice says in this type of case, Section 78 of the Residential Tenancies Act allows you to apply to the tribunal for termination ab initio (from the beginning). “You can say: ‘I only took it because it looked lovely and had lovely furniture and they have changed all the furniture. I want out of the tenancy’.”
Tenants can also be accused of misrepresentation. In Watt v Kettle, the tenant paid by cheque, knowing it would bounce, and moved in.
The tribunal concluded that the tenant induced the landlord to enter into the tenancy agreement by fraud or misrepresentation.
One case Williams dealt with involved a house where the “telephone jacks” turned out to be empty boxes. “The landlord said, ‘If you want wires you are going to have to pay Telecom $900 to put them in’.”
The tenant won that argument on the basis of misrepresentation. A property manager that “didn’t know” the jacks weren’t live wouldn’t be excused by the tribunal, says Williams.
In another case, a tenant asked for a Sky TV dish on the roof of a property to be wired up, but the landlord refused. “I say: ‘If it looks like a duck it should quack like a duck,’ says Williams.’ “Tenants are allowed to rely on what they are seeing being what it purports to be.”
Terminating Tenancies Takes Time
There are very few ways to successfully cut short 90 days’ notice. By Diana Clement (NZ Herald)
When landlords want tenants to leave a rented property, it can be tempting to look for ways around giving 90 days’ notice to terminate the tenancy.
One option is for the landlord, or a member of his or her family, to move into the property—which reduces the notice period to 42 days.
However, this shouldn’t be done dishonestly. If the landlord or a member of his or her close family isn’t moving in, the tenant could be justified in claiming compensation through the Tenancy Tribunal or asking for the notice to be set aside.
Moving in short-term isn’t always a good idea. If the tenants find out that the landlord has moved in and moved out after a short period of time, they could take their case to the tribunal.
Many landlords attempt to use 42-day notices to get tenants out in order to renovate the property. This is not acceptable under the Residential Tenancies Act (RTA).
Where landlords often make a mistake is that they or their relatives or employees will need to “ordinarily reside” at the property, says Scotney Williams of The Tenancy Practice.
“You can have a bach, a ski chalet and a boat. If you want this house back you have to be saying to the Tenancy Tribunal, and the world at large, you are going to live there and make it your family home and live in it more than any other place you own.”
“We get owners saying: ‘Can I give 42 days’ notice to renovate it?’ I say—of course, if you are going to live there,” says Williams.
“The tribunal will ask for evidence that you lived there, such as furniture removal receipts,” says Williams. “Have you got any photographic evidence that you moved in? Otherwise the tenants can expect compensation because you cheated on the notice.”
The definition of family under the RTA is quite broad, says Lisa Sargison, team leader at Crockers Property Management, and can include:
· The owner’s spouse, defacto, or civil union partner and any of their children
· Any parent of the owner, spouse or partner
· Any other person who is related by blood or marriage to the owner or his/her spouse or partner, providing that relationship is of a “domestic or family nature” rather than commercial.
A 42-day notice can also be issued when the landlord customarily uses the premises, or has bought the premises for occupation by employees of the landlord, says Sargison. In the case of a family trust, it is not possible to use the 42-day notice. Family trusts aren’t people and don’t have relatives. They are legal structures and 90 days’ notice must be given to tenants.
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WARKWORTH $298,000 WAR21445
Larger than the usual. 2 bedroom unit, full bathroom with separate toilet,
2 double bedrooms, level internal access to garage. Enjoy the warmth of
the wood fire in the Winter. Superb location for teachers or students
being close to Mahurangi College. Easy care garden with mature
shrubbery, paving, all fenced with storage in garden shed.
Spacious and roomy, all one level and built in brick and tile - a sound
investment if you have a rental investment in mind or easy living for elderly.
Expected rental return $330.00 p.w.
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OREWA $269,000 ORW20984
“Super for Singles”
Very affordable solid brick and tile one bedroom freehold unit, opens out onto a nice private garden area, easy walking distance to the shops, beach and the bus stop. One allocated parking space right outside your front door, plus additional visitor parking available.
Expected rental return $250.00 p.w.
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Recent Rentals
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Mahurangi East |
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Warkworth |
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| Our Figure (per week) | $500 | $380 | $340 | $300 | $320 |
| DBH Statistics Median Price | $450 | $380 | $350 | $300 | $330 |
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| Our Figure (per week) | $1,200 | $650 | $465 | $400 | $130 |
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