Opinion

Critical Summary of Changes to the RTA 2020

Residential Tenancies Amendment Bill

The Residential Tenancies Amendment Bill was listed on the agenda in Parliament on 4th August 2020. This becomes the date it was passed even though the actual date the Bill was passed was the 5th of August. The changes come into effect in six months, except for restricting rent increases to once a year and the ability for a tenant to give 48 hours’ notice they are leaving a tenancy as a result of domestic violence, which is effective immediately.

 

Fixed Term and Periodic Tenancy Agreements

  • Landlords will not be able to end a periodic tenancy without a specific reason (see reasons below).
  • Fixed-term tenancies will become periodic tenancies at the end of the fixed term unless both parties agree that the tenancy will end. Fixed-term tenancies now expire as opposed to ending, effectively just minimum term tenancies.
  • If the landlord doesn’t want the tenancy to continue at the end of the fixed term, but the tenant does, then the landlord must use one of the periodic tenancy grounds for ending a tenancy and give 63 days or 90- days notice depending on the reason for termination.
  • If the tenant doesn’t want the tenancy to continue at the end of the fixed term, but the landlord does, the tenant must give notice between 28 days and 90 days before the end of the fixed term period.

 

Termination Grounds for Periodic Tenancies to end:

These grounds are in addition to the existing provisions that allow termination following a tenant breaking their tenancy condition, such as being 21 days behind in the rent.

  • the landlord or a family member is moving into the property (63 Days notice) and the family member must move in within 90 days and then stay for at least 90 days.
  • the landlord requires the premises to be used for an employee (this must be stated in the tenancy agreement).
  • the landlord has an unconditional sale and purchase agreement for the property (63 Days notice).
  • extensive alterations, refurbishment, repairs, or redevelopment of the premises are to be carried out by the landlord or owner (90 Days notice).
  • the premises are to be demolished (90 Days notice).

 

Removing a tenant for anti-social behaviour:

  • If the tenant, engages in anti-social behaviour that is more than mild on 3 separate occasions within a 90-day period; and
  • on each occasion the landlord gives the tenant written notice describing clearly which specific behaviour was considered to be anti-social and who engaged in it; and
  • advises the tenant of the date, approximate time, and location of the behaviour; and
  • states how many other notices (if any) the landlord has given the tenant under this paragraph in connection with the same tenancy and the same 90-day period; and
  • advises the tenant of the tenant’s right to make an application to the Tribunal challenging the notice and
  • the landlord’s application to the Tribunal must be made within 28 days after the landlord gave the third notice.

If the tenant disagrees with the notice to end the tenancy for antisocial behaviour, they can appeal the notice to the Tenancy Tribunal. It is up to the landlord to prove that the tenant engaged in the antisocial behaviour and that it was more than mild antisocial behaviour. This means that other tenants or neighbours will probably have to become involved and provide evidence

 

Tenant commits assault

If a tenant physically assaults the landlord, the owner, a member of the landlord's family, or the landlord's agent, the landlord may terminate a fixed-term or periodic tenancy by giving at least 14 days’ notice to the tenant.

To do this, landlords must lay a complaint with the Police who must have sufficient evidence to charge the tenant with the assault.

 

Other changes

  • Tenants will be able to add minor fittings to their premises where the installation and removal of the fittings are low risk.
  • The Regulator (Ministry of Business, Innovation and Employment) will have new compliance tools to take direct action against parties who are not meeting their obligations.
  • Increased powers of the Ministry of Business, Innovation and Employment against landlords include:
    • Criminal Acts
    • Infringement Offences
    • Infringement Fees
    • Pecuniary Penalties
    • Improvement Notices
    • Enforcement Undertakings
  • The penalty amounts will be increased to a maximum of $50,000.
  • As a general rule of thumb, fines increase 70%-80% on what they are now with some additional new fines (see attached spreadsheet).
  • Advertising a property without a rental price will be prohibited.
  • The minimum period between rent increases will now be twelve months.
  • A party who is successful in the Tenancy Tribunal can have their identifying details removed from the Tribunal’s decision.

 

New supplementary Order regarding family violence:

  • A tenant under a fixed-term or periodic tenancy may withdraw from the tenancy by giving at least 2 days’ notice to the landlord if accompanied by qualifying evidence that the tenant has been a victim of family violence.
  • The victim does not have to pay any rent after the two days’ notice period.
  • Rent reduction is a percentage of the number of people who have been offended against divided by the total number of people living in the house. So, if there are 4 residents and one is leaving as a result of violence, there would be a 25% reduction in rent. If the occupant is a solo occupant, then the tenancy ends.

Please note that this is only an extract of the Bill and these should be read alongside the legislation to get the full understanding of landlords' requirements.

http://legislation.govt.nz/bill/government/2020/0218/latest/LMS294929.html

 

With all these changes and increased implications to getting it wrong, it is more important than ever that you look at your investment as a business that requires professional management to ensure legal compliance, quality maintenance and the maximum possible returns from the asset.

To learn more or to sign with Quinovic Mt Eden call Jay on 021 836087 or Barry on 027 561 4448


Real Client Feedback from "Customer Monitor" (Aug 19)

Our CX (Customer Experience) client satisfaction program is called Customer Monitor

Customer Monitor sends out a survey to a random selection of our clients monthly using the NPS system. The Net Promoter® Score (NPS®) is a proven, powerful metric used globally to measure customer engagement and advocacy levels. It establishes the likelihood of a customer to recommend your product or service on a scale of 0-10.

Harvard Business Review calls Net Promoter Score (NPS) “the one number you need to know to grow your business”.

The NPS® survey asks your customers: “How likely are you to recommend this company, product or service to a friend or colleague? ” The response options range from 0 (not at all likely) to 10 (extremely likely). The responses are then grouped into the following three groups:

To calculate NPS®, subtract the percentage of customers who are detractors from the percentage who are promoters. This returns a score between -100 and +100, which is your NPS®.

So what makes a good score? In NZ any NPS score above 0 is “good“. It means that your audience is more loyal than not. Anything above 20 is considered “favourable”. Above 50 is excellent, and above 80 is world class. … As a general rule in New Zealand,  you should aim for an average NPS of 30.

Believe it or not the NPS Industry Benchmark score for Property Managers in New Zealand is a lowly 4. 

Quinovic Mt Eden prides itself on our client relationships and this is shown with over 90% of our business coming from referrals. As it currently stands Quinovic Mt Eden has a NPS score of 65 and we’re building on that every year. This is significantly  higher than our competitors and the industry average of 4.

So with that said here are the last client reviews we received. Pasted word for word straight from our “Customer Monitor” report.

[table id=1 /]

Whether you’re a new property investor or been around since before bread if you want better service from your Property Management Company maybe you should give us a call.

We service all of Auckland so if you have a townhouse in Albany, a villa in Ponsonby, an apartment in the City or a house in Manukau we cover it all. Call Jay on 021 836087 or email [email protected] to have a chat and see if we are the right fit for you.


10 SIGNS YOU NEED SERIOUS CHANGE: PROPERTY MANAGEMENT

How to identify poor property management

INTRODUCTION

Successful property investing starts when you buy a sound property that is well managed so it produces regular, reliable income, with maintenance and tenancy issues attended to smartly. When managed correctly, your investment property can become a sustainable long-term profit that grows over time. Success doesn’t usually happen by chance. Your property manager significantly influences the success level of your property. A great property manager will have the management skills and market expertise to ensure you remain informed and in control, but have minimal time input. In contrast, a poor property manager may not communicate or respond, may delay in organising maintenance, avoid maintaining market rent levels, and may be slow to let the property to good tenants. This results in more steps and time involved than necessary.

It’s fundamental you’re able to tell the good from the bad if you want your rental income and property value to be maintained and grow. With the help of this guide, we’ll show you exactly what to look out for to determine whether you should consider switching property management companies.

Rent Stays Put

The rental property market is constantly changing, and lucky for many property investors, rents have been on the increase over the past 6 months all over New Zealand - a trend that is likely to continue in the coming decade.

If your investment property’s rent hasn’t changed over the past 6 months then you should consider approaching another property management agency to get a free rental appraisal for a comparative rent value. This will give you a good understanding of what your property should rent for on the current market.

You Rarely Hear From Them

Every month your property manager should be sending you a detailed report showing your rental income and expenses related to your property. The report should list how much rent was collected, how much was deducted in property management fees and maintenance expenses, plus other relevant information.  These reports are fundamental to keeping you in the picture, and helping you understand the success level of your investment. Like clockwork, our team sends this email at the beginning of every month to ensure our owners are always in the loop.

They Only Offer Trade Me Advertising

Trade Me is a great platform for advertising rental properties, but with so many listings added every hour, your listing can easily get lost, reducing tenant enquiry, and causing you to potentially miss out on finding great, reliable tenants.

Along with advertising on Trade Me and the Quinovic website, we also promote properties directly to our tenant database of over 3,500 tenants actively searching the property market. Plus, we integrate flyers and oversize signs with our online strategy to draw more attention to the property and generate maximum enquiry so we can find the best tenant for the property.

You Don’t Have Great Tenants

Tenant screening is a fundamental part of a property manager’s role. A property manager shouldn’t just put anybody into your property, a thorough screening process must be followed to get you a reliable tenant who’ll pay rent on time and look after your property. Our Quinovic team carry out careful tenant selection, with all applicants triple reference checked and credit checked to make sure only the best tenants are selected.

Your Tenants Are Being Ignored

Great communication is key to keeping tenants happy and content, reducing tenant turnover, avoiding vacancy periods, and maintaining a constant rental income. People generally expect their enquiries and requests to be answered and resolved in a timely manner, if your property manager is constantly slow in communicating with you, they’ll also be slow in dealing with tenant enquiries and following up on issues that require dealing with.

They Rarely Conduct Property Inspections

Conducting regular property inspections is crucial to ensuring your property remains in good condition, and that the tenants are taking good care of it. Plus, your insurance policy may require quarterly inspections. At these inspections, your property manager should provide a report on the property’s condition, and what repairs are needed, if any.

A good property manager will conduct an inspection every 3 months, plus an inspection at the beginning of the tenancy and another at the end. When conducting the first pre-tenancy inspection we photograph the chattel to record pre-tenanting property conditions, even taking up to 500 photos per property.

They Have Poor Follow Through

An investment is like any other real estate, repairs need to be carried out every now and then to maintain the property. If these repairs aren’t kept on top of, you risk causing significant damage and de-valuing the property. It’s important your property manager maintains a good relationship with tenants so they report any repairs required in the property, plus your property manager should be checking for any repairs needed during their regular property inspections.

Not only this, your property manager should be resolving these issues in a timely manner. If your property manager isn’t on top of any repair work needed in your investment property, it may be time to change property managers before their negligence begins causing extensive damage to your property.

Compliance Issues

It’s your property manger’s job to keep up with law changes and ensure your property and their management remains compliant with New Zealand law. If you’re starting to notice compliance issues, it’s definitely time to look elsewhere for property management services before they get into trouble with the Tenancy Tribunal.

Poor Financial Management

Rental properties require comprehensive financial management to ensure your rental property remains profitable. Your property manager should be able to handle expenses such as rates, insurance, maintenance and other costs, while ensuring your property remains profitable by seeking the best rent for your property. If you don’t believe your property manager is fulfilling this duty successfully, you may want to consider switching property managers.

They’re Hard To Contact

Both you and your tenants should be able to easily contact the property manager. If not, issues can easily start snowballing in the near future, and can cause tenants to start calling you with their complaints if they have your contact details, plus it makes it difficult for you to stay up-todate with your investment property.

Bottom Line

If after reading this article, you’re not satisfied with the management of your investment property, or have a feeling something is wrong, it may be time to look elsewhere for a great property manager. We are more than happy to provide free rental appraisals, plus we can provide customised advice on how to cost-efficiently increase your rental income. If you’ll like more information about our company and management systems visit our website


Make yourself heard! RTA Reformation - Submit your Comments

Whatever your thoughts are on the proposed changes we suggest you make them known by filling out the Governments survey below by the 21/10/18.

 https://www.research.net/r/RTA-reform-survey

 

According to the Government Release by Hon Phil Twyford on  27th August 2018. https://www.beehive.govt.nz/release/government-make-life-better-renters

We have collated a summary of the changes and a downloadable Q&A document which attempts to answer some of questions around the important changes that have been proposed.

The Residential Tenancies Act 1986 (RTA) regulates New Zealand’s rental market.

 

DOWNLOAD THE FULL Q&A SESSION HERE