“There has been a notable increase in fines and penalties against property owners if they don’t meet their requirements so it’s important to get things right.”
As a property manager, I’ve always favoured fixed-term tenancies. A fixed-term provides security for both the property owner and their rental customers. An owner has peace of mind that they won’t need to fill the property in a difficult time like over the Christmas holidays. And rental customers have the certainty of a defined term at a set price, enabling both parties to plan and budget accordingly.
In the past, renewing a fixed-term tenancy has been as simple as both parties confirming the extension of the term in writing. However, the recently passed Residential Tenancies Amendment Bill has significantly altered how residential tenancy contracts can be renewed and terminated.
So what does this legislative change mean for rental property owners? My observation is that the increasing complexity of compliance requirements is turning the industry towards a much more professional environment. As such, it’s essential that owners have the know-how and confidence to effectively manage their properties and navigate tenancy agreements. Here are a few key pieces of advice to help you get started:
The Tenancy Services website is an incredible resource for rental property owners. You’ll find clear guides that share any legislative changes and timelines you need to be aware of. Before you start, renew or terminate a tenancy agreement, you should check Tenancy Services first. Quinovic’s Knowledge Centre is another great destination for property owners to find helpful content.
There has been a notable increase in fines and penalties against property owners if they don’t meet their requirements so it’s important to get things right. From 11 February 2021, penalty levels for exemplary damages and fines will increase between 50 and 80%. Do your research and if you’re unsure about any details, reach out to a professional and ask for help.
It’s hugely important that you find a good fit for your property. This means taking the time to do reference and credit checks before signing a tenancy agreement and discussing the property conditions and neighbourhood with the prospective tenant. Choosing the right fit for a property is also a two-way street so it’s important to be transparent with prospective rental customers to help them make their own decisions. A young family might not want to live in a property if it is located in a high traffic area. Similarly, if a rental customer is hoping to adopt a dog within the next year and you don’t allow pets, they might choose to live elsewhere. It can be tempting to make a decision on the spot to fill your home faster, but it’s important to slow down and do your due diligence.
A periodic tenancy may not always be the preference of your rental customer. In my experience, people renting appreciate the security of a fixed term. The choice is in their hands but property owners should always give them the option. When your fixed term is coming to an end, give your rental customer a call, discuss the different types of tenancies and ask if they would like to extend the tenancy for a fixed term.
Look at engaging a professional property manager who is competent in all of the requirements surrounding residential tenancies. Adding a professional to your team is a guaranteed way to ensure your best interest is always protected and your requirements as a rental property owner are being met.
Bernard Parker has been the Principal of Quinovic’s Kapiti-Mana office since 2002. Bernard’s experience in managing his own investment properties is bolstered by previous business ownership and management. He is also a qualified lawyer specialising in tenancy matters.
