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Understanding the Residential Tenancies Act
Beginner’s guide to property management
Understanding the Residential Tenancies Act
RTA Changes On 11 February 2021, the second phase of the Residential Tenancies Amendment Act 2020 came into effect, reflecting the fact that more people are renting than ever before. The final changes, regarding ending a tenancy due to family violence or physical assault, will take effect by 11 August 2021 at the latest.
Some of the key changes include: 90-day notice Landlords and property managers can no longer give a no-cause 90-day notice to terminate a tenancy. To end a tenancy based on anti-social behaviour, the tenant must have been issued three written notices for anti-social behaviour within a 90-day period and an application must be made to the Tenancy Tribunal with evidence of this behaviour. There are a number of other valid reasons for terminating a periodic tenancy after 11 February 2021, which include but are not limited to: the tenant has been at least five working days late with their rent payments on three separate occasions within a 90-day period; the property is going on the market or has been sold with vacant possession; or extensive alterations, refurbishments, repairs or redevelopment of the premises are to be carried out; or the landlord requires the premises as a principal place of residence for themselves or a family member. A tenant can still terminate a periodic tenancy by giving at least 28 days’ notice (up from the previous 21 days). Additionally, all requests to assign a tenancy (or pass on the lease to another tenant) must be considered, and the landlord cannot unreasonably decline. If the tenancy agreement was entered into prior to 11 February 2021 and prohibits assigning another tenant, this agreement will still stand. Fixed-term to Periodic Tenancies Fixed-term tenancy agreements now convert to periodic tenancies unless a landlord gives notice using the reasons listed above or in the RTA guidelines for periodic tenancies; a tenant gives notice for any reason at least 28 days before the end of the tenancy; or both parties agree to extend, renew, or end the fixed term tenancy. Minor changes to the property Tenants now also have more freedom in making minor changes to the premises, as landlords must not unreasonably withhold consent for any minor renovations or alterations. Minor changes could include; shelving, baby gates, picture hooks, curtains or window coverings, securing furniture or appliances to protect against earthquake risk or to make a property child safe. If the landlord consents to the changes, they can impose reasonable conditions, for example moving the shelf slightly to avoid wiring behind the wall. Landlords must respond to requests in writing within 21 days. These minor changes must be remediated to substantially the same condition when a tenant leaves the premises at the end of a tenancy. Other changes Other changes that came into effect on 11 February 2021 were fibre broadband installation, ending rental bidding, annual rental increases, privacy and access to justice, assignment of a tenancy, landlord records, enforcement of the RTA and changes in the Tenancy Tribunal’s jurisdiction and administrative powers. For a full summary of changes, check out the Ministry of Housing and Urban Development and Tenancy Services Summary of Changes Factsheet: www.tenancy.govt.nz/assets/ Uploads/files/residential-tenanciesamendment-act-2020-factsheet.pdf. The next deadline for the Healthy Homes Standards is 1 July 2021 – for more information on these changes, visit: www.tenancy.govt. nz/about-tenancy-services/news/deadlineextended-for-healthy-homes-standardscompliance-statement.
For those new to property management, the Real Estate Institute of New Zealand (REINZ) last year launched a new Beginner’s Guide to Property Management.
The guide provides new property managers with the knowledge and credentials they need to get started and succeed in the profession. The course is designed and written by experts and it sets out simply, the many aspects of the role in an easy-to-use guide, which new or existing property managers can study in their own time using a quiz at the end of each section to test their expanded knowledge. It can also be used by managers as a great induction course for new starters to a team. REINZ chief executive, Bindi Norwell, says property managers who take their role and learning seriously will find that the course will put them in good stead to add value to their customers. It will also arm them with the knowledge they need to ensure their landlords don’t end up being fined for failing to follow and adhere to relevant legislation. “It all comes down to good communication and that’s something we have stressed right throughout the five modules, which make up the course,” Bindi says. “Recently there have been a number of legislative amendments and reforms to tenancy law including the Healthy Homes Standards and the new Residential Tenancies Amendment Act 2020. “This has meant that landlords and property managers have had to continuously keep up with these changes, so to support the wider industry, we’ve put a lot of thought into ensuring these changes are covered in the course,” she continues. Around 35 percent of New Zealanders currently live in rental properties, but the property management profession has had no regulation for the past 12 years, meaning that almost anybody has been able to become a property manager with no training or qualifications. However, as new rules and regulations are potentially going to be introduced at some point in the near future, the need for comprehensively training property managers to understand the current requirements and keep up with the recent changes has become apparent – as has the importance of promoting best practice.
“We feel that a course like this will be well received, given that the roles and responsibility of property managers have expanded so much over the years, and we are confident that people working in the property management industry will see the REINZ name and feel assured that this is a comprehensive and highquality offering. “It is also a perfect lead into the New Zealand Certificate in Residential Property Management Qualification (Level 4). “We really want to assist people in the property management profession because we see that as a big part of our role, and we think it’s time for everybody to lift their standards before regulation comes into effect. “Our aim is for this course to become an industry ‘ABC’, and it will be updated regularly to keep learners up-to-speed with future changes.” CT
A1 Property Managers
Having a good property manager in your corner who is armed with information, knowledge and decades of experience can make a huge difference to your experience as a property investor. They can be a sounding board for your ideas and can help you maximise your returns and opportunities
Since the Residential Tenancies Amendment Act 2020, more responsibilities and regulations have been added to the landlord’s list. Here a few reasons why more people are turning to professional property managers for help.
Advertising for and selecting tenants From advertising, managing enquiries, hosting viewings, selecting and vetting tenants, a professional property manager can help reduce vacancies, ensure you maximise your rental income and secure quality tenants. Property managers meet with potential tenants every single day and having someone in your corner who is experienced in what to look for in a good tenant can make a huge difference. A property manager will also take care of all the paperwork to ensure your tenancy agreement is accurate, lawful and contains detailed terms and conditions to help protect you in the future.
Property inspections and maintenance A good property manager will have a thorough process for ingoing and outgoing property inspections which is essential should there be a future disagreement. Routine inspections can be awkward if you’re not used to conducting them, but for property managers they are everyday tasks. They can also arrange repairs and maintenance and often have preferred relationships and discounted rates with quality contractors which means you’re not left having to organise quotes and secure tradespeople. Rent and bond From ensuring you get the maximum rent at the outset, to gradual rent increases over time to make sure you get the best return on your investment, enlisting a professional to manage your rental property means your investment works hard for you – not the other way around. If you are keen to avoid direct negotiation with tenants and don’t want the hassle of collecting rent or lodging bonds, a property manager will have a robust system to get things ticking over without any fuss and should something go wrong they will have a system to deal with things promptly to ensure things don’t spiral out of control.
Tribunal representation and legal expertise Despite all the hard work, sometimes disputes end up in court. Property managers understand the law, have experience working with the Tenancy Tribunal to resolve issues and can help by defending a case in court – taking the stress off the property owner.
If you’re currently trying to do it all on your own, or you’re with another property manager and don’t feel like you’re getting the level of care or expertise you deserve, perhaps it’s time to make the switch to A1 Property Managers. Transferring to us is simple and won’t cause disruption to existing tenants.
Why you should choose A1 to professionally manage your property
Our Focus:
Choosing a property manager to look after one of your largest assets is essentially to make things easier for you. Our focus is to maximise the return on your investment, while minimising your risk, ensuring you have correct advice and knowledge limiting any stress and added expenses.
Hamish Wilson P. 0212 211 002 E. hamish@a1prop.co.nz A. 200 Fendalton Rd Christchurch, NZ 8052 www.a1prop.co.nz
A tale of two markets
Targeted policy spanning tenancy reforms, tax changes and tightening credit conditions are aimed at property investors, but is it possible to segment such a hot housing market, and what does it mean for the rest of us?
Clear in its mandate to support more sustainable house price while curbing investor appetites, kiwis are starting to see the effects of new Government policy in action, with the residential market now moving at two speeds. Where property investors' market share has dipped from historic highs, record value growth is still being achieved with the Real Estate Institute's (REINZ) Housing Price Index (HPI) noting a new high in June of 29.8 percent year-on-year. While the lower end of the market may pause to digest recent regulatory changes, top-tier properties continue to sell for sky-high prices, leading some to ask whether the response from policy-makers is disproportionately impacting our national property market? Specialising in the sale of standalone homes across the Christchurch region, salesperson Urszula Bedggood has experienced the wild ride of market dynamics and says extreme conditions require salespeople to scale up their skillset. "Some investors simply can't be bothered anymore but we're seeing the ones that can hold onto their investments are engaging property managers to help them navigate the changing landscape." "Movers are finding it challenging too, and we're seeing some sell their homes to then be priced out of the next tier up, or they can even end up panic buying." "We are finding that both buyers and sellers of all classes are needing extra attention, and it's important to support them in getting their future plans in place before listing their home for sale." Bedggood extols the importance of premium services as the market changes. "The current conditions for sellers, while offering high sale prices are demanding attention to detail and focus on aftercare from salespeople," she explains. "Land is scarce and people are moving to the regions while there aren't nearly enough homes to meet demand." "Heavy competition for virtually every listing results in rising prices and a sense of urgency which prevails despite shifting goalposts," she says. "Investors are bound by numbers, where purchasers buying on emotion are the ones putting more money on the table," she says. The effects of tightening credit conditions for investors was almost instantaneous, with realtime offers scaled back following the announcement of higher loan-to-value ratios, extended bright-line test and interest deductibility reform. "Bank funding matters and there are different assessments according to the risk profile of a property." "We can't really test the market until we understand and fix the issues around supply, until then we keep using temporary measures to curb runaway value growth which comes off in the wash."
BAYLEYS ALL OVER RENTAL PROPERTIES
