This post is partly getting something off my chest and partly posing a question to someone who may know..
I regularly come across Property Managers and Real Estate Salespeople that are unaware of the Residential Tenancies Act 1986, but are still quite confident in giving incorrect advice. e.g. Today I was called by a tenant who was quering her rights when the property she is in was put on the market for sale. She is on a fixed term tenancy until the end of March 2013. The Property Manager is quite confident that all she needs to do is give the tenant 90 days notice for the tenant to vacate...which is of course, wrong! The Property manager has also told her Landlord this, so he is rest assured that he can sell the property with vacant possession. He has now apparantly sold the property conditionally (through a Sales person) and was upset after I tracked him down and informed him that he has been misinformed. The tenant is not going anywhere. Obviously the salesperson was unaware of the law as well as she knew of the fixed term tenancy and accepted that the 90 day notice would fix it by providing vacant possession.
The Property manager (and afterwards the Owner) told me that the Tenancy was over anyway because two of the signitories on the Tenancy Agreement had left. I told them that there was however still one signitory in the premises and she was paying the rent, so the Tenancy is still valid. They both disagreed. Good god! What do you do? This sort of thing happens often and I believe it is so for the following two reasons:
1. Real Estate training at the authorised schools allows for a very small percentage of the course to be attributed towards the Residential tenancies Act 1986 (RTA). I would say less than half of the Real Estate salespeople in NZ are familiar with just the basics of the RTA ie amount of notice to be given under different circumstances. If the REAA were able to test this under exam conditions, my money would be on 'well less' than 50%.
2. There are no qualifications needed to become a Property Manager. My high school daughter could set up a Property management company tomorrow and hold millions of dollars of landlords money in trust if she chose to. The industry was partly regulated prior to 2010 where only members of REINZ could receipt letting fees, however even then, anyone could collect property management fees on behalf of owners. Back then Property management companies had compulsory auditing every four months and monthly reports on the money they were holding had to be sent into REINZ. If a Property manager took off with the rent money the REINZ had a fidelity fund, the purpose of which would be to pay back the landlord for the money that was lost.
People had been talking for years about more regulation in the Property management arena, but nothing was done..until the Big Blue happened...ie Blue Chip. Along with deposits, many landlords lost their rents on investment properties managed by Blue Chip.
There was a huge uproar and the Govt was woken up and decided to do something about it.
The result - REINZ have been stepped down. REAA (Govt dept - yae) was born and decided that forthwith anybody can collect letting fees. The word spread quickly and very soon Property management companies starting popping up like mould spores on aged cheese. With the added incentive of letting fees added to the property management fees and zero regulation, the game was open for everyone. And guess what, unsuprisingly, most of them have no idea what they are doing.
My question is this:
After the Blue Chip debarcle occured and after the Govt looked at the never ending list of consumer complaints due to mostly ill-informed property managers, I would have thought that they would have done two things: Compulsory education to enter the Industry (A lawyer has to have a qual to hold funds in trust) and compulsory reporting for ALL Property Mgmt companies to a Govt body (or REINZ)
This is what the Govt did - 2010 ..FORTHWITH...NO eductaion is required, NO reporting is required, ANYBODY can hold millions of dollars of rent money in trust, NO indeminity fund if the property manager takes off with your money. This is their answer to Blue Chip...Again...Good God!! Why on earth when people were screaming for more regulation, the Govt, not only did not regulate further but they cancelled the little regulation that was already in force?
Mark my words...right now as we sleep there are dozens of little blue chip's spawning around the country and when they grow bigger it will all happen again, this time in spades. I will then be old and grey(er) and in my rocking chair shaking my head and saying I told you so.
I regularly come across Property Managers and Real Estate Salespeople that are unaware of the Residential Tenancies Act 1986, but are still quite confident in giving incorrect advice. e.g. Today I was called by a tenant who was quering her rights when the property she is in was put on the market for sale. She is on a fixed term tenancy until the end of March 2013. The Property Manager is quite confident that all she needs to do is give the tenant 90 days notice for the tenant to vacate...which is of course, wrong! The Property manager has also told her Landlord this, so he is rest assured that he can sell the property with vacant possession. He has now apparantly sold the property conditionally (through a Sales person) and was upset after I tracked him down and informed him that he has been misinformed. The tenant is not going anywhere. Obviously the salesperson was unaware of the law as well as she knew of the fixed term tenancy and accepted that the 90 day notice would fix it by providing vacant possession.
The Property manager (and afterwards the Owner) told me that the Tenancy was over anyway because two of the signitories on the Tenancy Agreement had left. I told them that there was however still one signitory in the premises and she was paying the rent, so the Tenancy is still valid. They both disagreed. Good god! What do you do? This sort of thing happens often and I believe it is so for the following two reasons:
1. Real Estate training at the authorised schools allows for a very small percentage of the course to be attributed towards the Residential tenancies Act 1986 (RTA). I would say less than half of the Real Estate salespeople in NZ are familiar with just the basics of the RTA ie amount of notice to be given under different circumstances. If the REAA were able to test this under exam conditions, my money would be on 'well less' than 50%.
2. There are no qualifications needed to become a Property Manager. My high school daughter could set up a Property management company tomorrow and hold millions of dollars of landlords money in trust if she chose to. The industry was partly regulated prior to 2010 where only members of REINZ could receipt letting fees, however even then, anyone could collect property management fees on behalf of owners. Back then Property management companies had compulsory auditing every four months and monthly reports on the money they were holding had to be sent into REINZ. If a Property manager took off with the rent money the REINZ had a fidelity fund, the purpose of which would be to pay back the landlord for the money that was lost.
People had been talking for years about more regulation in the Property management arena, but nothing was done..until the Big Blue happened...ie Blue Chip. Along with deposits, many landlords lost their rents on investment properties managed by Blue Chip.
There was a huge uproar and the Govt was woken up and decided to do something about it.
The result - REINZ have been stepped down. REAA (Govt dept - yae) was born and decided that forthwith anybody can collect letting fees. The word spread quickly and very soon Property management companies starting popping up like mould spores on aged cheese. With the added incentive of letting fees added to the property management fees and zero regulation, the game was open for everyone. And guess what, unsuprisingly, most of them have no idea what they are doing.
My question is this:
After the Blue Chip debarcle occured and after the Govt looked at the never ending list of consumer complaints due to mostly ill-informed property managers, I would have thought that they would have done two things: Compulsory education to enter the Industry (A lawyer has to have a qual to hold funds in trust) and compulsory reporting for ALL Property Mgmt companies to a Govt body (or REINZ)
This is what the Govt did - 2010 ..FORTHWITH...NO eductaion is required, NO reporting is required, ANYBODY can hold millions of dollars of rent money in trust, NO indeminity fund if the property manager takes off with your money. This is their answer to Blue Chip...Again...Good God!! Why on earth when people were screaming for more regulation, the Govt, not only did not regulate further but they cancelled the little regulation that was already in force?
Mark my words...right now as we sleep there are dozens of little blue chip's spawning around the country and when they grow bigger it will all happen again, this time in spades. I will then be old and grey(er) and in my rocking chair shaking my head and saying I told you so.
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