Canterbury landlords warned about excessive rent rises

Thursday 16 September 2010

Canterbury landlords are being warned not to raise rents excessively due to the increased demand for rental properties after the earthquake.

By Maddy Milicich

Landlords must give tenants 60 days' written notice of intentions to raise rents and cannot make subsequent increases within 180 days of the last increase.

Department of Building and Housing client services manager Jeff Montgomery is predicting some increase in rents in Canterbury, which is to be expected when demand exceeds supply, although only for the short term.

"Rents might go up a little bit, but they will settle down. There are little bumps all the time, for example when the America's Cup was in Auckland, rents rose as a result. The same is bound to happen for the Rugby World Cup."

DBH is not expecting landlords to raise rents to an extent as to end up at the Tenancy Tribunal, as it would need to be proved that the rent being asked for was considerably outside the scope of market rent.

However, market rent can be hard to define, for example an area may have market rent for a three-bedroom house between $200 to $400 - double from one end of the scale to the other - and therefore it is difficult to prove what constitutes market rent.

"The Tenancy Tribunal is unlikely to make a ruling unless [the situation] gets way out of hand or the landlord misled the tenant in any way," Montgomery says.

Montgomery says there is currently debate around what extent a house is damaged and if that constitutes for the tenancy to end.

The law says where properties are uninhabitable, or where there is minor damage but no water, either the tenant or landlord can give notice to terminate a tenancy.

Tenants must give two days' notice, while landlords must give seven days.

If a house is partially damaged and is fixable, the tenancy will continue. If part of the dwelling needs repairs and those repairs can be done within a reasonable amount of time, the landlord must find alternative accommodation for tenants while the work is being undertaken.

But again, what constitutes reasonable in terms of time is debatable, as it changes from situation to situation.

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