Ask an Expert

Question:

I live overseas and have a real estate company to manage my only property. I recently found out that the tenant hasn't paid rent for seven weeks. I was not informed of this by the rental department of the real estate company. Their only response has been "we will look into it". What are my options regarding the lack of management from this company and the lack of communication? Legally, what can I do in this situation?

Our expert Bernard Parker responded:

The Residential Tenancies Act gives a landlord the opportunity to apply to have a tenancy terminated if the rent falls into arrears by 21 days. If your property manager is unaware of the rent status you have good reason to be concerned.

You need to establish whether the person to whom you spoke has followed up and established the state of rent payments. It may be that the company’s frontline staff were handling the matter adequately.

However, there seems to be a gap in communication between the company and you. If you consider that the company has not acted in your best interests you may look to the possibility of ending the management, either by agreement with the management company or by application to the Disputes Tribunal.

Question:

This is a question about fences... We are owner occupiers and looking at renting our property out. Currently the neighbouring property is tenanted and the tenants are altering the existing fence, including removing planks from our side and popping it back on their side of the fence structure. We're concerned that if we leave the property to be tenanted, the property managers won't report further and future alterations and could leave us with quite a lot of repairs to share with the other owner. What are our options as owners to mitigate any losses please?

Our expert Bernard Parker responded:

You have raised two issues: the next-door tenants changing the boundary fence, and the fear that your property managers won’t report to you about such changes.

The second issue is most important – you should select a property manager who is thorough, accurate and reliable in their regular inspections, who reports to you fully on the findings of the inspections, and who has a full pre-tenancy photographic recording of the property. The pre-tenancy evidentiary photos, along with a detailed chattel list, allow the property manager to track any damage within a tenancy.

If the damage is caused by next-door tenants, that is a conversation for you to have with that property’s owner. Their tenants should similarly be held to account.

Question:

I currently have a property manager managing my rental and I'd like to manage it myself in the future. What should my property manager hand over if I take over? Can you please list them? And what happens with the existing Tenancy Agreement: will it be handed over to me to uphold or I can change what's in there?

Our expert Bernard Parker responded:

Your management agreement will probably define the circumstances under which you can terminate the management agreement. Assuming that you are able to terminate the agreement, your property manager will need to hand over to you their copy of the tenancy agreement, a Change of Landlord form (specifying that you are now the landlord in respect of the bond), a full rent statement, and keys to the property. Current contact details for the tenant are also essential.

This process should be in two parts: firstly, the existing property manager notifies the tenant of the impending change and that they should expect a call from you, and secondly you call the tenant to introduce yourself and then arrange for them to pay their future rents to your nominated account. The existing tenancy agreement continues and is not affected by a change of property manager. You cannot change the tenancy agreement without the consent of the tenant.

Question:

We wish to change property managers, our current one does not wish us to move as we have a fixed term agreement with our tenants. They have brought to our attention clause 9 in the property management agreement which basically means that we have to stay with them until the tenancy contract has ended. How do we get out of this contract?

Our expert Bernard Parker responded:

You acknowledge that you have a contract with your property manager which requires their management to continue to the end of the current tenancy. However, you have not said why you want to change property managers. Simply wanting to break your contract is not good enough reason. You will need to establish that the property manager has failed in its duty to you as your agent. This is possibly an issue that the Disputes Tribunal will hear.

However, if you cannot establish a serious failure on the part of your property manager you will be unlikely to succeed in terminating the management contract.

Question:

I understand that as a landlord I am required to provide potable water in the kitchen. I’m curious as to what level of filtration from a tank supply is required by law to meet the potable standard.

Our expert Bernard Parker responded:

I suggest that you contact your local authority to enquire about water quality standards. Also, you may like to contact a local water filter supplier to obtain advice and a quote for supply of an appropriate domestic water filter.

Question:

What type of doors are considered not to be compliant in a rental property please?

Our expert Bernard Parker responded:

Many local authorities have different regulations regarding doors and windows. I recommend that you contact your own local authority’s building inspectors.

Question:

I have an investment property which I have always managed by my self. But I am now planning to go overseas for more than three months. Can I ask a friend to look after the property for me or do I need to engage a property manager?

Our expert Bernard Parker responded:

Yes, you can ask a friend to look after the property. You do not have to hire a professional. The Residential Tenancies Act requires (section 16A) that a landlord must have agent if he/she is or will be out of New Zealand for longer than 21 consecutive days. The purpose is to have a local representative who can carry out your duties while you are overseas. You will have to notify the tenant and the Bond Centre about the change of contact. (The friend will have to be empowered to sign off the tenant’s bond if appropriate.) I suggest you look at Section 16A and ensure you complete all the necessary notifications.

Question:

Can our property management company let their supplier charge us for labour costs - on top of travelling costs - for coming on site to give a quotation without doing any job or repair work?

Our expert Bernard Parker responded:

It has been common in the past for tradespeople to provide free quotes for work. Some still do.

However, the cost of travelling to sites in order to inspect and then provide a free quotation has become prohibitive for many small operators. For example, when there are three people quoting and only one successful bidder, two will have incurred costs that they cannot recover.

To overcome this, many tradespeople have a policy to charge for their time and costs in providing a quotation for a job that they may not win. (Some may not charge for the quotation if they eventually win the job.)

Question:

The tenants in my property have used a drier in the laundry, un-ventilated for three months. This has led to a great deal of mould and peeling paint. Prior to this, the three-monthly inspection reports for this tenant were clear that there was no damage/mould anywhere in the house. The reports covering the six years before (for the previous tenants) also confirm this.

But, unknown to me, the EQC painting in this area seven years ago was substandard - so when there was excess unventilated moisture, mould grew and paint peeled. There is a strong communication trail from the property manager showing requests that the property be ventilated. There are also neighbour reports that the curtains and windows were never opened. And mould has also appeared in other very sunny rooms.

I accept the painting of the laundry is a contributing factor and my responsibility. But my property manager tells me that the tenants are not liable for anything at all. That’s because they “didn't understand” what they were doing and the initial paint job negates them fully. Yet they initially admitted liability. I’m very confused.

Our expert Bernard Parker responded:

It is curious that for six years there were no mould issues and then in the last three months there has been a mould problem. I am surprised too that a paint job seven years ago can last six years and then fail in three months.

The common denominator seems to be the current tenants using a drier in an unventilated room. The suggestion that the tenants are not liable for their actions because “they didn’t understand what they were doing” is rather facile and sounds like a fob-off.

The correspondence trail from the property manager and the evidence of neighbours should help to establish the cause of the mould. I don’t think the initial paint job can absolve the tenants from the responsibility of acting with due care and attention to prevent mould.

Question:

We have a property manager who has advised us through an email that we have a lease till the end of the year. But a few months ago we saw that our property is available for lease. Our property manager has gone AWOL and we cannot contact them. If they have told us we have an agreement are they liable if there is no actual agreement in place?

Our expert Bernard Parker responded:

I’m not sure what you mean when you say the property manager has “gone AWOL”. The property is being advertised for rent. Sometimes a tenant will request to break a fixed term tenancy. If the property manager has the authority to find a replacement tenant it is reasonable for them to advertise on the basis that the current tenant pays rent for the period up to the day the new tenancy starts.

Is the rent still being paid? Is the current tenant still living there? For what period does the advertisement say the property is available? It seems the basic problem is that you cannot reach the property manager to discuss your questions. If you are not happy with your property manager you should check your management agreement to see whether you need to end the agreement and appoint an alternative property manager.

Question:

My property manager has recently changed ownership and the new owner has sent me an 'Instructions to Act as Property Manager' form to sign.

It contains terms that were not in place under the previous owner - eg: a one off charge of $500 (plus GST) in the event of sale of the property. Is this a government requirement or can property managers set their own terms?

It is my intention to sell the property in the near future.

Our expert Bernard Parker responded:

The Sale of Property fee is not uncommon in the industry. It reflects the additional work that a property manager has to do when a tenanted property is placed on the market for sale. Interactions between tenant and real estate salesperson can very quickly become tense, especially when negotiating terms for access to show prospective purchasers through the property. Often what is convenient for a salesperson is not so convenient for a tenant.

The main purpose of a Sale of Property fee is not to generate revenue for a property manager but to make a landlord think about when they place the property on the market for sale. Close to the end of a tenancy is a time when tenants can be more relaxed about viewings, as they are possibly getting ready to move on. That is when the property manager is less likely to charge the fee. I suggest you speak with your new property manager and come to an understanding about your sale plans.

Question:

I have just had my home fully insulated to comply with the new regulations. I currently pay 12% management fees to a property manager to manage the property which I assume covers managing maintenance and works. I have just received a statement with the invoice for insulation and also on the statement was fees of $800.00 as well. When I questioned them they said that was their commission for organising the work. Is this legal - given they already charge me a management fee?

Our expert Bernard Parker responded:

The agreement that you have with your property manager will specify whether the manager can charge you a commission on arranged maintenance. Generally, the standard management fee covers tenancy matters, rent collection and day-to-day management of the property. This does not usually include maintenance, which is additional to the regular duties.

It is easy to understand if you think of the difference between “property management” (normal, day-to-day management) and “project management” (additional projects). I suggest you look at your agreement with the property manager. If it specifies a commission rate for arranging and paying for maintenance, then the manager is entitled to do so.

Question:

Who is responsible for bottled gas supply to a tenancy? I understand that we have to pay the bottle hire fee and that the tenant pays for the gas consumed. If the account is in my name and I on-charge the tenant for gas every month I can claim the hireage portion as an expense. The problem is that the tenants want to do a bundle discounted deal with power, phone, internet and bottled gas and then on charge me the annual bottle hireage fee. Any advice?

Our expert Bernard Parker responded:

Normally, a tenant is responsible for the cost of utilities. So the tenant pays for the gas usage. Generally, the owner is responsible for the regulators and piping costs. If you wish to make an arrangement with the tenants to bundle the gas, internet, power and phone facilities for an agreed cost, that should be fine as long as you both agree on the formula.

However, there may come a time when either you or the tenant thinks it’s not such a good idea. That’s when such bundling deals come unstuck. Be prepared to revise the formula if usage becomes one-sided.

Question:

Our tenants changed the showerhead in the bathroom. We found out that they changed it after the hose connected to the shower head burst. We suspect that their shower head was not designed for specific water flows and PSI of the hose as the old one which is why the hose burst. They did not have consent to change the showerhead. And now our property manager is saying that we as landlords are liable for the damage irrespective of the fact that the tenants made unconsented alterations. How can it be considered fair and reasonable wear and tear when the damage was done to the unconsented altered state?

Our expert Bernard Parker responded:

You have not said why the tenants changed the shower head (and hose). Had the previous one broken? Also, you say you suspect that they installed a wrong shower head and hose for the water flows. (Once again, you have no confirmation.) Perhaps they were trying to get it repaired and save you money at the same time! In any case, the issue of unauthorised alterations may not be as it seems. I think it is a good idea to ask the tenants why they changed the shower attachment.