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NELSON PROPERTY INVESTORS ASSOCIATION
OCTOBER 2010 NEWSLETTER
UNDERSTANDING THE NEW LAW
Our two speakers will elaborate on the main points.
I have been pouring over the fine detail and am trying to urgently come to grips with what it all means on a day by day basis. Everyone in my company is booked into an expensive training day being run by Scotney Williams LLB. Scotney is New Zealand’s best know expert on the RTA law and provides industry training. He and others will also be speaking at the NZPIF conference next weekend.
So before doing this specialist training what have I come up with? Why bother committing to paper thoughts that might be wrong. Well this is how the world is advanced. We all need to think about the changes and put our own interpretation onto them. If I am right I might get away with it. If more of you start doing what I am doing them I might have a better chance of getting my own way.
I have had some email and voice communication with a few people from DBH and the general advice is we are not sure and you will need to get a clarification of those points from the Tenancy Tribunal Court.
Clearly the loudly trumpeted statements from the Minister of Housing saying that the amendments will make things clearer for landlords and tenants is well off the mark. Sure some of the problems of understanding the changes relate to the fact that we have done things the same way for so long and it always takes time to adjust to changes. The other problem is there are so many changes. There are pages of detail on boarding houses that most of us in a hurry flick over. To some extent that is a mistake (the flicking that is) because there will in time be tenants (and their advocates) who start to recite portions of the boarding house rules and it will be easy to become confused which applies. For instance if you have a five roomed house with a large group of students in it all paying individually which portion of the RTA applies? The other problem is that some amendments to the amendments were tacked onto the legislation at the last moment and are not easy to understand because you need to flick back and forward from one section to the other in order to get the meaning. In other cases the well published changes differ from what is what is actually written.
ONE EXAMPLE IS LETTING FEES.
The minister has said that all property managers including independents can now charge letting fees.
The RTA does not use the term property manager. They have created a new term called “letting agent” This new prescribed class replaces “Real Estate agent” in the section providing for the charging of letting fees and it also replaces “Accommodation Broker” for which there are provisions for DBH to issue regulations covering their activities. A letting agent is defined as a person who holds themselves out to the public for reward as an agent for the granting of tenancies. No mention is made of the person who collects the rent, maintains the property, or who acts as the “landlord”.
Potentially we will see organisations like student accommodation bureaus charging a letting fee for their service. What about those people looking after a friend’s or relative’s house whilst they are overseas and acting as an agent in accordance with section 16A ? Will they be permitted to charge a letting fee ?
THINGS TO TRIP UP ON.
Some really good new things are being introduced but it is not clear how they will work. Cost of collecting debts. Section 102 is amended. This states that if you are successful in your claim the filing fee of $20 can be awarded. Generally only items that have been claimed can be awarded so you need to add $20 to your tribunal claims.
Collection costs for any reasonable expenses or commissions paid or incurred recovering or attempting to recover can be awarded if the tenancy agreement has a clause in it concerning reimbursement. Generally most collection agents charge 20% plus some extra fixed charges for filing of court documents.
You need to add a collection fee clause to all tenancy agreements and add this claim to all tribunal applications.
INTERESTING THINGS
There is a new clause that makes a tenant’s interference or rendering inoperative any means of escape from fire and unlawful act with resultant fine of $3000. For reasons beyond me this does not extend to landlords doing the same. The building act provides for things like $40,000 fines for owners so perhaps they thought they had the ground covered on that count. It is not clear if “means of escape” extends to smoke and evacuation alarms. One Tenancy Adjudicator has described herself to me as technologically challenged. So the chances of her understanding such matters are a guess. As an IQP involved in testing and certification of such facilities I think that it does include smoke alarms. In Australia most states now have a clear law concerning smoke alarm interference. Too bad our legislators did not bother copying our close cousin’s law. I recently had a tribunal case that went in my favour concerning such matters. The insane tenant removed the alarm then tried to set fire to the flat. The following article from my USA sources gives some good pointers.
Smoke-alarm tip
Because there have been a number of fires with fatalities in our area over the past several years, I emphatically advise members of our landlord group to make certain that the smoke detectors are working. It never fails that the tenants will take the batteries out during the holiday season for kids games, toys, etc. I use a "smoke detector alarm" form that I created indicating when the smoke detector was checked and new batteries installed. I write the date on the battery when I install new ones. The next time I do my inspection, I can tell if the tenant replaced the batteries prior to the inspection if there is no date written on the battery. This gives me an indication of just what my tenant is about also. When I replace the batteries, I also give my tenants an extra pack of batteries to keep in the house. If they have the extra pack of batteries, they likely won't take the time to remove the smoke detector batteries. Since I started giving the extra batteries, the majority of the time the original dated batteries are still in the smoke detector the next time I inspect.
NOISE AND NUISANCE TO NEIGHBOURS
I have a tribunal case pending concerning noise. The council has issued a $500 fine to the tenant for repeated infringements. The Minister (both Labour and National) have both been quoted as saying the amendments deal with this matter. I challenge you all to have a read of section 40 (2) (c) and try to figure out how the new law deals with this issue. I think it says I can get a restraining order against the tenant. I wonder if the Tenancy Adjudicator thinks the same thing.
Please note. NPIA is a voluntary support organisation by landlord for landlords. Any ideas advice or suggestions obtained at our meetings or from our newsletters is not intended to replace professional legal, accounting, or valuation advice