Life as a Landlord

[Wayne]

Tax deductible though.

against what?
He wasn't 'working' so how would it be deductible?

[Perry]

Peter - who were the others around the table?

[Davo36]

Peter it's good of you to get the haircuts and represent us landlords

The commonly reported stuff is that we are all bastards, screwing our poor honest, hard-working tenants while going "Mwwaaaaahhhaaaaa"

So good for someone to redress the imbalance in the media.

I reckon you should get some sort of stipend from APIA or somewhere for doing this.

[Perry]

Appearance fee aka haircut money?

(Oh, and a trim of the whiskers, too, perhaps?)

[Micholas]

Peter you look a lot younger post-haircut. Keep up your good work representing us in the media, but mostly keep up the good work with the haircuts.

[flyernzl]

Tenants can be strange creatures. I had a youngish couple move into one of my flats last year. The tenancy initially went quite well – rent paid on time, no rubbish around the place and no noise complaints from the neighbors. What could be better?

Then, as often happens when the honeymoon period is over, things started to turn a bit feral. From my own admittedly selfish point of view the most important change was that the rent payments became rather erratic. They got a few hundred dollars behind, I hassled them about this, and by the end of the year they had caught up again. Come January things started to go from bad to worse. Eventually I issued a 14-day notice about the rent arrears and talked turkey to them on how the fallout from this could affect their rental reputation. By then, of course, I realized that the two lovebirds had now become cat and dog, so I quickly applied for mediation to sort these arrears out.

Sure enough, they let me know that they were short of money and could not afford to keep renting the flat. They needed to terminate the tenancy and therefore handed me the requisite 21 days’ written notice. Nice. Around the same time the scheduled phone mediation came up, but as neither of them were answering their phones on that day no progress could be made. The matter now had to be scheduled for a Tribunal hearing. However, eventually one of them borrowed from the Bank of Mum and pretty much paid up the rent arrears, so that was not so bad.

Their tenancy week started on the Friday and logically finished on the following Thursday. Their move-out date that they had given me was a Saturday, so on that fine sunny day I turned up at the flat for my final inspection fully equipped with their rent summary in my hand and a bright smile.

They had done quite a good job of tidying up and there was no damage, so there was not any problem there.
“That’s all fine” I said, “Now how are we going to settle the final two days of rent that is owing?”
“Two days!!” they said in unison. “What two days? We gave you 21 days notice!”
I tried as best as I could that the 21 days notice was quite a separate calendar event from the rent week, and that while they had paid up (with the help of Mum) to the Thursday, they still owed me for the Friday and the Saturday.

It was like trying to explain Quantum Physics to a six year old. I could not get through to them. In the end, the woman announced “Humph, I will go to Citizens Advice on Monday and ask them”.
I smiled sweetly. I know the CAB, and sometimes help them out. “Fair enough” I replied, and gave them the bond refund form and the copy of my rent summary.

“I have put my address on that form” I told them. You take it, check out wherever you like with whoever you like, and then you sign the form and post it back to me. When I get it I will sign my part and then send it off to the Bond Office”.

Now the reality here is that we have a couple who are on the verge of splitting up. They have already admitted they are short of money. At worst, they were going to miss out on two days of their four-week bond, about 7% of that money, yet strangely I heard nothing more from them for over three weeks. I even sent them a text during that time to check they were sorting it all out, and had no response. Finally, after 26 days I received the form back in the mail. Their part filled out. Wanting all of the Bond.

Of course we still have the TT application running. I had received due notice that the hearing had been scheduled for a few days after Easter. Not good, I was going to be out of town that week. So I immediately got in touch with Tenancy Services to request a change of date. “Ring the District Court” they said, “It’s in their system now, only they can deal with it”. Ever obedient, I did so. “You’ll need to email the Case Manager for that” I was told, and was given the contact. I did so, and later that same day she responded with a new hearing date, now set for early May.

Happy and content, I departed for Easter in the Top of the South feeling all organized. Imagine my surprise when, on returning home, I found in the mail a signed and sealed order from the District Court. The hearing had proceeded on the original day, and since neither myself or the other party had appeared, I was told that the application had been dismissed.

So, back to emailing the Case Manager. This now leads to some questions, I told her. Is the application still open? Is the hearing still set down for the new date? Given that my request for a change of date (and the rescheduling) took place more than a week prior to the original date set down, why was court time wasted on the original hearing rather than being usefully employed in clearing the usual backlog of other claims?

Of course, today I received a response. Just a curt note confirming that the application has been rescheduled. No reaction or response to my other questions. No apology for their apparent wasteful incompetence in holding a court hearing when they had already been told, well beforehand, that nothing was going to happen at that time on that date. Presumably the Adjudicator, the Court Clerk and anyone else involved sat around and drank tea and chatted among themselves for the hour or so that had been allowed.

Am I going mad, or is the world really full of incompetents from top to bottom?

[mrsaneperson]

Its a lousy Justice system and an incompetent one at that. Ultimately the Crown and we as taxpaying robots are being short changed and alienated by all of this. No apology rankles even more.

I know exactly what you mean by the tenant not being able to comprehend simple addy-ups on the rent owed , even when clear summary's are given .
Another great post though - thanks Flyernzl.

[Davo36]

Yep Peter, I often find myself asking the same thing.

My mother used to say something like "All the world is a stranger, except me and thee, and I'm starting to wonder about thee"

To be fair though, the courts are over run and all the staff are basically on minimum wage, with higher paid employees (who kept things running) having been removed some time ago. So it may not be the fault of the staff, but more about 1) A lack of funding and 2) The courts being overloaded by the underclass we now have in NZ.

[Perry]

Delightfully informative - if lightly satirical post - Peter.

At least you got a re-schedule, rather than being told 'no.'

Oh, yes - you are going mad. But be consoled. You are in good company: many of the rest of us are, too.

[flyernzl]

In order to exist as a civilized society, we must have laws and customs. A lawless society is an uncivilized society. Hence, over many years, we have built up a great pile of rules and regulations, customs and expectations. These largely allow us to live in comparative peace and harmony within our society.

Well, that is the intent. However you only have to pick up the daily newspaper or watch the television news to see it doesn’t actually always work out like that.

Most of us, you and me, do our daily best to conform to these requirements and expectations. We pay our rates and taxes, do not rob little old ladies in the street, and are kind to dogs and small children. Unfortunately there are also a number of people who do not, either willfully or through ignorance, conform to these norms.

The business of residential tenancy is governed by the Residential Tenancy Act. This Act was, of course, devised and written by good and true men (and women) with the best of intent. The underlying logic is that these are the rules of the business, this is how you play the game, and that everyone involved will obey the rules.

But as we all know, not everyone follows the rules. Landlords rent out unsuitable properties and fail to repair things that break, tenants misbehave and don’t pay the rent. Sometimes this is because they have not read and understood the rule book, but quite frequently they are just standing there staring down the rest of society. “The rules are for fools, I’ll do it my way and to hell with you” is the unspoken (and sometimes the spoken) message.

I have a tenant who has been in my property for five years. At the time she went in tenants were a bit hard to find so I took a bit of a risk For the first year or so she wasn’t so bad, a few quirks but we all have those. However, since then she has steadily been getting madder and madder. Rent has become erratic, the phone calls and text messages have become weirder than weird. One night I had had five text messages from her between midnight and 1am. At a recent inspection the house was a tip, and any suggestion that she should tidy up was pretty much ignored.

So enough was enough. In mid-December I issued a 90-day notice, and then went happily on my way thinking that, come mid-March, I’d be rid of the crazy bat.

The weirdness continued over the following months but I took comfort from the prospect of her immanent departure. This property is one of my older ones, not in the best of condition, and I’m planning to totally redo the bathroom, carry out a less drastic renovation in the kitchen, tidy up the rest and put in new carpet throughout. I’m even saving my sixpences to pay for the work.

Some hope. As March loomed I reminded her that we were about to part ways, but I never really got a lucid answer. Instead, she became quite adamant about her intention to stay.

“But you can’t” I explained, “We’re going to pull the bathroom right out. You can’t live in a place with no bathroom”.
“Yes I can”, she replied, “I’ll pop next door and use theirs”.

So for the few weeks after D-day we were still left arguing. She would vary from texting sweet-talk one day to sending threats the next.
“I am not moving and I will fight you in court” was one response from her.
So she was planning to stay there and stare the Law down.

Having tried and failed to reason, I eventually applied for a Possession Order. This was new ground for me, in 25 years of Landlording I’d never had to go that far. Persuasion and reason had previously won through, but not this time. Perhaps I am losing my persuasive touch.

I kept it simple. Sure, she owes me money. Sure the place is not reasonably clean and tidy. Sure there are two unregistered motor vehicles on the property in contravention of the TA. But I ignored all that and kept my application clean and simple. The tenant is on a periodic tenancy. A 90 day notice was given. There were no 14-day notices from the tenant to me at the time I sent the notice, so it can’t be classed as retaliatory. The time allowed was actually 101 days from delivering the note to the date of termination. The termination date has now passed and she is still occupying the property. End of story.

I got my hearing. The tenant did not turn up. “Are you sure you don’t want to claim any money?” the adjudicator asked, in a rather puzzled way.
“That’s a different argument for a different day” I replied. I learn't years ago that when you are involved in any negotiation, take the time to think what is the outcome you really really want. In this case I want her out. Anything else is ancillary. Some monetary recompense would be nice, but that’s secondary right now. So I got my Possession Order. Immediate Possession on that day. Satisfied, I went home.

Next morning, back out to the property. Tenant – now ex-tenant - not home. I entered the property and photographed everything, all rooms, all contents, inside and out. If there is any damage done I can now prove that it didn’t exist prior to the termination of the tenancy. I then pinned a copy of the Possession Order to the front door and departed.

Well blow me down, she still wouldn’t move. So the next step, according to the book is the Bailiff. This entails taking your Possession Order to the District Court filling out the form and paying $200. Kerr says its free, but free no longer applies, $200 thank you very much. You can add the $200 to the debt the tenant owes you but you’ve got a snowballs chance of ever getting that back.

I must admit the Bailiff thing is fairly rapid. I filed the form on Monday, the Men in Black visited the tenant on Wednesday and they acted today.

So there we have it. The property back in my hands, locks changed, and presumably an unhoused person sitting on the roadside kerb in the dark somewhere, the words of the 1977 song I Fought the Law and the Law Won running through her mind. She had five and a half months to find somewhere else and chose not to do so.

[Perry]

You mean, cruel, heartless b*****d.

[Davo36]

I was going to say that Perry

But it's just so hard when the person you're dealing with is basically a bit mental. You can't reason with them.

A family member had a tenant like this recently, on a farm actually. She'd filled 2-3 sheds with stuff. She was a total hoarder and just couldn't get her head around the fact that she had to leave and take all her crap with her.

She was actually given a year rent free on the basis that she left by a certain date. My family member is clearly a lot softer than I. That was last November. Took until mid march to get her physically removed. So she took the year's rent free, then argued and ground another 3-4 months out of the landlord. Lying about when and how she was moving the whole time.

Not even her family would take her, as she's burned up any good will she may have had with them.

Oh and of course, she left the sheds full of rubbish behind too. So large lawyers bills and rubbish removal bills to pay.

It was handled badly by my family member of course, but they are someone who thinks if they act reasonably, the other party will too, and sometimes they don't.

[eri]

What he said

Everyone expects each party to be "reasonable"

But as we've grown a society when greedy, lazy, unreasonable people have been able to thrive + prosper {the full range from hopeless hoarders to trump}

We now need years to grind them out over their screams of unfairness + persecution over being held, often for the first time in their lives, to a reasonable outcome for all

[portofolio]

Very hard to manage 6 residential property and 1 commercial property by myself. Still have a full time job and two business to run.

[flyernzl]

Early in June, on a Sunday, I had arranged to call at one of my rentals for the tenants to complete some paperwork. Quite unusually for Auckland, although it was now early afternoon the morning fog had not cleared. So it was quite definitely chilly and the air was very damp.

The tenants were home, sitting inside the house bundled up in jackets and blankets. Visible moisture was running down inside the windows pooling on the windowsills that had recently been painted. All in all, a picture of misery and discomfort.

Now this was at a house where just 18 months ago I had paid out quite a substantial sum to have new ceiling and underfloor insulation installed up to current standards and also had a heat pump installed. I am talking a multiples of thousands of dollars invested here, and now there were my tenants squatting and shivering.

This should not be. According to Dr Roger Tuck and Prof Howden-Chapman all I had to do was to put my hand deep into my wallet to pay for all this work to be done and my tenants would then, for all time, be living the life of Riley in a cosy warm house, their children happy and healthy and no longer being a burden on the public health system and the taxpayers pocket. I am told that this must be true, as Phil Twyford agrees with them.

So why has this utopian dream failed so dismally? When in doubt, ask the tenants, so I did. “Oh, we can’t afford to run the heatpump, it costs too much” they replied. So there you have it. Contrary to the often stated and firmly held myth, when you insulate a cold house you then actually have a cold insulated house. Think of a Thermos flask, it will keep cold drinks cold just as efficiently as it will keep hot drinks hot. To retain the heat inside the insulation you first of all must create it. No heat supplied means no heat retained.

Therefore what am I, the Landlord, meant to do about this? I am supposed to supply my tenants with a warm dry home. Do I then camp out in their living room with my packet of sandwiches and a water bottle so that I can make them turn the heat pump on and stop them turning it off? Do I lockwire the off switch and hide the remote? Am I truly my brothers keeper?

One of the greatest failures of Rogernomics was the dismantling and privatisation of the New Zealand electricity distribution system. What was supposed to create a competitive and low-cost market according Max Bradford has, instead, seen the retail price of electricity skyrocket. Each of the energy companies must charge enough to fund their own executive MBA packages, their own golden parachutes and their own prestigious head office in the most up-market part of town. Then of course, by producing substantial profits they pass a significant part of those profits back to the Government coffers by way of tax. Behind it all the Government itself still owns most of the actual generation infrastructure.

We now have a system where electricity costs form a substantial part of a low-income family’s household budget. Old age pensioners spend the winter huddling over a one-bar heater or go to bed at half past six to try and keep warm without spending a king’s ransom. Who benefits from all of this? The usual suspects, I suppose – consultants, accountants, merchant bankers and others of that ilk. Not your average kiwi family to be sure.

One of the pillars of the economic reforms of the 80s was the drive to remove all discounts, subsidies and special allowances from the market. No longer would pensioners, the unemployed and the sick qualify for special pricing on their phone, their public transport or their power. Everyone would pay the same rate and all incomes and benefits would be adjusted to allow this. That may have been the case at the time, but I am certain over the following years the prices of those services have been ramped up at a much greater rate than the related incomes of those at the lower end of the economic ladder.

Running counter to this argument is the idea that those who qualify should be issued with some sort of electricity payment vouchers. Last year I attended a Social Housing Workshop where this idea was floated. Normally, I am against such selective welfare but I struggle to see any other available options. Simply upping benefit payments would most likely not do the trick, as this extra money would probably not flow through to the intended result. Given the propensity of this Government – or any future Government – to jealously protect its tax base I do not see much prospect of a market-wide lowering of power prices, which would seem to be the only supply-side option.

In the meantime, my tenants (and very likely many others) sit and shiver inside their well-insulated but unheated home harbouring their sniffs and coughs and adding to the belief that all Landlords are callous and uncaring about the welfare of their captive clients. And my windowsills will continue to suffer.