NELSON PROPERTY INVESTORS ASSOCIATION
OCTOBER 2016 NEWSLETTER
PO Box 198 Nelson
Our seventh meeting of the year is being held at the Nelson Suburban Club Tahunanui Drive on Tuesday 11 October. This meeting commences at 7:00 pm. Please note we are not having a pre meeting dinner and this meeting is starting earlier than normal. We are running a joint MBIE and NPIA meeting and sharing the costs for this. It is a few years since the Ministry has run a landlords meeting in Nelson. These meetings commenced about 20 years ago as a result of my suggestion to them and they are always well supported. With the recent changes to the RTA with many serious retaliatory penalties now being imposed on landlords for noncompliance we all need hear what MBIE have to say and take note of their advice.
All attendees need to register in advance. Ctrl-Click on this link to secure your seat. https://mbie.wufoo.com/forms/landlord-seminars-2016/
THE MARKET
Well I told you all many times in earlier newsletters that things are heating up. On the selling side of the industry there is a new player on the ranks giving us up to date sales information such as contract prices, dates, GV, and historical sales data along with continuously updated electronic estimates on property values. This web site is provided curtesy of Trade Me. Here is the link. www.Homes.co.nz . I have been watching a home I grew up in Devonport Auckland. Four weeks ago they said it was worth $1.8m. That is $40,000 increase each and every year since I left it’s warm nest 45 years ago. Last week the value changed to $1.9m so it looks as if the rate of increase of its value is increasing! For those of you completely addicted mobile geeks they also have an iPhone App. This app has positional GPS functionality to allow you to click and read what the earth below your feet is worth! You can instantly see what properties have recently sold close to where you are standing, what price they sold for and there are promises of adding a function to tell you which agent did the deal.
Meanwhile back here on earth, out of the cloud, winter was cancelled this year. The traditional winter oversupply of Nelson rentals just did not happen this time round. We now have less than 90 rentals to let in the city. Hold onto your hat when the annual summer migration starts up in October / November. The newspapers, on line forums, coffee meetings and agent newsletters all have their opinion about what is happening. My guess (which is not worth much) is that the annual dumping of holiday homes onto the rental market in March did not happen this year. We have had a couple of good summers with high tourist numbers. During the GFC years tourist accommodation providers struggled. Tourists are now coming all year round and it is possible to make lots more money out of furnished holiday homes than regular residential rentals. I have just booked my family into a pre-Christmas summer holiday modest home at St Arnaud. The cost of this is way more than the best executive rental in Nelson.
THE RTA AMENDMENTS of 2016
A lot has been written about the new law that has been passed. MBIE will talk about it at our next meeting. They might even mention about some things that should have been included in the amendment such at the Meth contamination isues and the Osaki case that is letting tenants get away with blue murder.
In writing this newsletter I have spent a wet Saturday morning reading the difficult to understand 2016 amendments to the RTA. In the past the writers attempted to make the RTA reasonably easy for a layman to understand. Not that the judiciary and I always agreed on what it means. Well in my opinion such well-meaning intent to write clear plain English has been abandoned. To complicate matters for the first time the law writers have produced both an amendment and a set of regulations. The complete amended RTA is available on line which sort of helps to understand things but it is easier to work out what has changed by first reading the amendment to the act.
As everyone should know the main issue is we now have to provide insulation to ceilings and floors. The regulations go into detail about this and provide for some complicated descriptions of your obligations. This obligation extends to needing to specify in the tenancy agreement what kind, quality, and condition the insulation is but strangely not it’s R rating. The RTA differs from the Regulations in that you also need to specify in the tenancy agreement the insulation in the walls even though there is no requirement to provide insulation in the walls?
You also need to provide smoke alarms with a problematic issue of tenants being obliged to replace batteries of unspecified alarms but not all. I can see some interesting cases developing with tenants tampering with mains operated and monitored units and claiming they thought they were obliged to do this.
The notice requirements re right of entry by the landlord has been changed to 24 hours from the normal 48 hours but only for insulation and smoke alarms. What a mess this will cause with tenants and landlords getting mistaken ideas what their rights and obligations are. At least they have at long last fixed up the mistake that was made in 2010 re a penalty for tenants who would not permit access.
A half-hearted attempt has been made to make things easier to regain an abandoned property. Nick Smith told me it was because HNZ had lots of empty abandoned properties. Once a tenant is 14 days in arrears (three missed rent payments) you need to serve a 24 hours notice of inspection (not the normal 48 hours) on the tenant then apply to the court for a non attendance hearing. To do this you must have an email address for the tenant to permit official notice of procedure to be given. Alas the RTA still does not define what an abandoned property is. No mention is made of dogs or even other (non tenant) people in a property. No mention is made of mains power dis-connection. No mention is made of what to do when the water is flowing out the door from overflowing sinks. No mention is made of what to do when there is a rotting body in a property (not necessarily the tenant). No mention is made of tenants who are imprisoned or have left the country (perhaps by being deported). These are all things I have faced and dealt with.
There is another fascinating requirement that to my knowledge has not been in media releases. All tenancy records now must be kept during a tenancy and for 7 tax years after it finishes. These records are defined as tenancy agreement, amendments to the agreement, inspections, records of all correspondence, notices, letters, emails, all maintenance records and photo graphs and other forms of communications. I guess other forms of communications mean text, face book, snap chat, and maybe even phone call records. These are to be for all communications with the tenant or any person acting on the tenant’s behalf. They do not define or limit the definition of what is regarded as a person acting on behalf of a tenant. Could this be parents, partners, lovers, Police, neighbours, flat mates, or plain old busy bodies?
A little bit has been published about changes to the retaliatory notice provisions. My understanding of what was being said in the media varies somewhat with what I read in the amendments. I am sure I heard that the rules around giving of retaliatory notice had been tightened up to stop abuse of it by landlords. To me that means the narrow definition of retaliatory notice has been widened. In fact all that appears to have changed is the tenants have now got longer to appeal / make an application to the tribunal to have it struck out. Times have changed from 14 to 28 days. The tribunals would often accept applications over 14 days so nothing has really changed here. However the penalty on landlords has been ramped up to a maximum of $4000 which makes it one of the larger fines that can be imposed. I have noticed frequent abuse of the 42 day notice provisions so perhaps this might give the tribunal a bit more power to deal with such cases.
This next meeting will be the last for the year.
I trust you will all have a wonderful summer. Watch your email inbox for news from Nelson PIA. I already have one good speaker promised for next year.
Regards
Glenn
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