Compliance Warning for All Landlords

February 2, 2018

In late November 2017, Andrew King, executive officer for The New Zealand Property Investors Federation (NZPIF), warned landlords to check the legality of their investment properties.

 

The warning followed a Tenancy Tribunal ruling in April 2017, instructing Dunedin landlord, Vic Inglis to repay nearly $11,000 in rent to his tenant, Natalie Parry, after it was discovered his property contained unconsented work during Parry’s tenancy.

 

Judge Kevin Phillips later overturned the ruling – which was based on a 2013 High Court decision –during an appeal in the Dunedin District Court, ordering the money be paid back to Inglis and saying the ruling overlooked principles of justice and fairness.

 

King said he hoped that Judge Phillips’ decision would set a new trend for the Tenancy Tribunal, and that adjudicators could apply justice and rationality to similar cases, to keep landlords better informed about their position and to help prevent them from having to pay back large sums to tenants.

 

Despite the favourable overturning, King told the NZ Herald the NZPIF warned landlords to inspect their rental properties’ consents by checking them with their local council. He noted the issue could affect even the most unsuspecting landlords as the unconsented work may have been carried out prior to their purchase of the property.

 

He advised that if unconsented work is found, the work needs to be assessed to see if it meets the current building laws. If so, a certificate of acceptance should be applied for. If it doesn’t meet the requirements, any necessary work should be carried out to become compliant.

 

The scary part for landlords, the NZPIF warned, is that if achieving certification isn’t possible, “your tenant could make an application to the tenancy tribunal and you will have to pay them their rent back up to the tribunal's limit of $50,000.”

 

King and NZPIF were set to meet Housing and Urban Development Minister, Phil Twyford at the end of November 2017 to discuss the legal issue, and hoped for a suitable alteration to the Residential Tenancies Act. Twyford declined to comment on the ruling, but told the Herald, “I look forward to meeting the federation on the issue of unconsented rentals. Landlords, tenants and other parties will have the opportunity to advocate for this and other law changes during the law reform process. I do not wish to prejudge the outcome of that consultation.”

 

While no details of the meeting relating to the compliance issue have come to light yet, in the same week, Twyford commissioned an independent stocktake of the housing crisis, which would encompass the 617,000 NZ rental properties in New Zealand (as of September 2017, according to Statistics NZ data).           

 

If you’re a landlord concerned with the compliance of your rental property, please don’t hesitate to contact First Avenue Property for some friendly and professional advice.

 

 

Image:

 

Building site by John Keogh under CC BY-NC 2.0

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Filed under Landlord Information

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