Under the Residential Tenancies Act, landlords must comply with all legal requirements relating to buildings, health and safety that apply to the premises. They must also ensure that the premises can legally be lived in at the start of a tenancy.
In practice, this means landlords need to be broadly aware of health-related and safety related requirements in the following laws:
• Building Act 2004 and the Building Code
• Health Act 1956
• Housing Improvement Regulations 1947
• Bylaws made under the Local Government Act 2002. These are set by individual councils.
The Residential Tenancies Amendment Act 2019 strengthened the law for holding landlords to account if they rent out unsuitable properties.
The Act has amended the definition of ‘residential premises’, so that regardless of whether premises can be legally lived in, they will be considered ‘residential premises’ under the Residential Tenancies Act if they are lived in or intended to be lived in. This amendment gives the Tenancy Tribunal full jurisdiction over cases concerning premises that are unlawful for residential purposes. It also means that tenants living in unlawful residential premises will be protected by the minimum requirements in the Residential Tenancies Act, such as landlord responsibilities for complying with building, health and safety laws, cleanliness, maintenance and repairs, smoke alarms, insulation, bond lodgement, rent increase notices, and notice periods for ending a tenancy.
Tenancy Services will be able to enforce the Act against landlords who breach it, regardless of whether premises are lawful for living in or not. In cases of unlawful residential premises, the Tribunal can now order:
• the landlord to repay the tenant all or some rent, depending on the circumstances of the matter
• that the tenant is not liable for rent arrears, compensation or damages unless it would be unjust not to make the tenant liable
• the landlord to make the premises lawful and comply with relevant legislative obligations, such as fire safety requirements under the Building Act 2004, within a specified timeframe
• exemplary damages (a financial penalty payable to the tenant) for failing to comply with this work order
• the tenancy be terminated
• any other order in favour of the tenant that it may currently do under the Residential Tenancies Act.
Tenants will be able to give two days’ notice to end a tenancy in an unlawful residential premise if the premises were unlawful at the start of the tenancy and are still unlawful. Both the tenant and the landlord can apply to the Tribunal for an order terminating a tenancy on the ground that the premises are unlawful.
What are unlawful residential premises?
Unlawful residential premises include dwellings within a property which have been constructed for another purpose, such as a garage or a commercial building, or properties which do not comply with relevant building health and safety legislation. Many “granny flats” may fall under these criteria.
It is an unlawful act not to include a statement that details the current level of compliance with the healthy homes standards in any new or renewed tenancy.
Tenants either need to give a minimum of 21 days’ notice (fixed-term tenancy granted prior to 11 February 2021) or 28 days’ notice to end a tenancy. For landlords that have not had their property assessed for the healthy homes standards, this does not allow a lot of time.
Landlords must get the property assessed and have this information included as part of the tenancy agreement, for any new or renewed tenancy. There are no exceptions. Landlords cannot rent a property without knowing the current level of compliance.
Failing to include a current level of compliance statement can result in exemplary damages of $750. Landlords then have just 90 days to meet all the standards, or risk exemplary damages of up to $7,200 payable to the tenant, or a fee payable to the Crown.
It is imperative that landlords act now or risk a lengthy vacancy period as the wait time for getting properties assessed is increasing as demand increases, particularly in regional New Zealand.
Tenants are aware that if they leave their current property, their new rental will meet the healthy homes standards within 90 days. If you lose your current tenant and a new tenant moves in, and your property has not been assessed, you risk a vacancy period while waiting to get the property assessed, and you will still need to meet all the standards within 90 days.
Harcourts advice to landlords has been, and continues to be, don’t delay meeting the healthy homes standards. The earlier you meet the standards, the more likely you are to retain your current and valued tenant. The result being fewer vacancy periods with happy tenants, greater financial returns, and a warm dry healthy investment property.
Everyone knows just how hard it is to compete in New Zealand’s red-hot property market at the moment, so are there ways to make your offer more attractive and appealing to sellers than all the rest?
Here are five ways that just might tip the balance in your direction.
Tip 1: HAVING THE MONEY UPFRONT:
Getting preapproval for a mortgage before you make any offer on a house is very important. Mortgage lenders can offer fully underwritten pre-approvals, so your credit has been checked and finances verified before you make an offer. Pre-approvals give sellers confidence that you are a safe bet and will complete the property purchase without difficulty.
Tip 2: WAIVING ANY CONTINGENCIES:
Taking away any difficulties that sellers might have will highlight your offer to them. Finance contingencies mean you can back out of the deal if your mortgage falls over, inspection contingencies relate to inspections of the property, and sale contingencies are when you have to sell your existing home before following through with the sale. Waiving contingencies can be risky but can often be completed before an offer is written up so talk to your Harcourts sales consultant about the risks and rewards if you are considering this.
Tip 3: UP THE DEPOSIT:
A deposit on a property is a ‘good faith’ deposit that reserves your right to buy but means you will lose the money if you back out of your contract without reason. If you really want to stand out, increasing your deposit is a good way of doing so and shows the seller that you want the property now!
Tip 4: OFFER BEYOND THE ASKING PRICE:
Cash buyers often come in with lower-than-asking-price offers because of the benefits to sellers. If you have another cash buyer that is low-balling a seller, offering beyond the listing price may be a way of being very noticeable amongst the bidders.
Tip 5: MAKE IT PERSONAL:
How about writing a personalised offer letter to the sellers telling them what you love about the property and why it is perfect for your family and/or pets? You could i nclude photos of your family, differentiating you from other buyers and pulling at the heartstrings of sellers.
Remember, talk to your Harcourts Cooper & Co sales consultant about any questions or ideas you may have on making your offer stand out.
FOMO is beginning to reappear in buyers, according to a New Zealand licensed real estate agent survey released this week. The results show that more than 60% of Kiwi agents have evidence that the ‘fear of missing out’ trend is starting to reappear in the market once again.
The REINZ & Tony Alexander Real Estate Survey for July has reported an upswing in FOMO activity, following a high in February and distinct drops in April, May and June.
While the extent of FOMO is down from the “frenzied” period of activity late last year and through to March this year, the survey says the recent Government tax changes and return
of Loan to Value Ratio rules seem to have increased angst of buyers unable to purchase appropriate property in the current market.
“There is no doubt that the industry is still in a sustained period of price growth, and buyer interest is still high,” Harcourts NZ managing director Bryan Thomson says. “Fear of missing out is a very real issue, particularly with the market pressure of Kiwis who have been based overseas returning with their families to settle back in a safe corner of the world.
“With evidence that property investors have not flocked onto the market with investment properties as threatened after the Government rule changes, the low number of stock for sale will be worrying those wanting to buy property immediately, and FOMO will once again be an issue for buyers.
“This is where the skill and experience of Harcourts sales consultants will be noticeable in the market, working hard to list the best properties so buyers have a good selection to choose from and won’t miss out on opportunities to buy.”
Broken down into districts, those regions with buyers most displaying FOMO tendencies as reported by agents are Queenstown Lakes, Nelson/Tasman, Canterbury, Northland, Bay of Plenty and Wellington.
For two months in a row, more than 80% of agents say their buyers are concerned about a shortage of listings, with other concerns including interest rates falling after making a purchase, jobs and incomes, and high debt.
Other findings are:
• More than half of agents are reporting rising prices on average in their locations – up from 32% in May, meaning prices have not been majorly affected by the combined effects of the tax changes and return of Loan to Value Ratio rules.
• Around 3% of agents report they are seeing fewer investors stepping forward to sell properties (compared with 12% in April), indicating there is no wave of investor selling warned about after the Government rule changes.
• More than 50% of agents say there are fewer investors in the market, with Reserve Bank influence cooling the fervour of investors.
• Around 20% of agents reported less buyers are attending open homes and auctions, although that is tracking upwards on earlier months this year.
• There is a noticeable stepping back of offshore parties interested in buying property
• The highest-rating factor for investors remains low interest rates, the hope of buying a bargain, and investing for retirement.
The REINZ & Tony Alexander Real Estate Survey gathers together the views of licensed real estate agents all over New Zealand regarding how they are seeing conditions in the residential property market in their areas. Topics include activity levels, first home buyer and investor views, and factors which are affecting them.