Tenancy Services takes on enforcer role

Saturday 22 October 2016

Only “ratbag” landlords who don’t take care of their rental properties need to worry about the Ministry of Business Innovation and Employment’s (MBIE) new “interventionist” powers, a landlord advocate says.

By Miriam Bell

MBIE’s tenancy services team can now investigate substandard rental properties which run foul of housing obligations under the Residential Tenancies Act (RTA) – even if it has not received a complaint from a tenant.

The new Tenancy Compliance and Investigation team will be running a “targeted risk basked audit programme”, as well as responding to complaints, an MBIE spokeswoman said.

Designed to help landlords meet their obligations, the programme’s ultimate goal is to audit for compliance to give landlords and the Ministry assurance they are meeting their obligations.

The spokeswoman said that if they are not they will then be given an opportunity to rectify any deficiencies although, if there are serious deliberate beaches, compliance action may be taken.

This will help ensure there is a level playing field for those landlords who are meeting their obligations, she said.

“There is no intention to check every landlord or rental property in New Zealand. 

“However landlords are running a business and we expect all landlords will not only want to meet their obligation but will be happy to demonstrate that they are.”

Tenants who are concerned about the condition of their rental property can also contact the MBIE and make a complaint to Tenancy Compliance and Investigations team. 

There have also been changes to what the Tenancy Tribunal can order if a rental property is found to breach health and safety requirements under the RTA and requires work.

The Tribunal can now order a tenant’s rent to be redirected to MBIE to pay for any necessary repairs if the landlord does not carried out those repairs.

“The costs of maintaining and repairing their property are costs that landlords should anticipate and budget for as a normal business expense,” said the MBIE spokeswoman.

“A landlord who meets their obligations, under the RTA, by providing and maintaining their premises in a reasonable state of repair or even a landlord who gets it wrong but complies promptly with any Tribunal order to get work undertaken, is unlikely to find themselves facing such an order.”

Landlord representatives agree that landlords who go about their business in a way which is professional and compliant with the RTA are unlikely to be affected by the changes.

Auckland Property Investors Association (APIA) vice president Peter Lewis said both APIA and the NZ Property Investors Federation (NZPIF) have always advocated that rental properties should be in good condition and compliant with the law.

“These changes are aimed at those ratbag landlords who impose bad conditions on vulnerable tenants and won’t do anything to rectify them.”

While penalties for non-compliance are now more likely, law-abiding landlords who took care of their rental properties should be okay, he said.

However, the ramping up of MBIE’s traditional role from mediator to enforcer with interventionist powers was a significant change, in his view.

“It will have been done because many tenants are unable or unwilling to take action on their own part [about poor rental property conditions] because they are worried about being evicted or having their rent raised.

“We are not against the move as it stands now, but if we ever see a situation where a full warrant of fitness for rental properties is introduced, MBIE might end up with the scope to do a lot more and that could have a big impact on landlords.”

MBIE’s new Tenancy Compliance and Investigation team kicked off their work last week with an investigation of some Dunedin student flats.

Team manager Paul Coggan said the level of non-compliance identified during this operation was concerning, especially in the area of the current insulation statements now required on tenancy agreements.

The Dunedin visit was just the start of these operations and the team will be in cities and towns across New Zealand to carry out such work, he said.

“We will not hesitate to take action for breaches of residential tenancy law. Breaches will be subject to compliance action and potentially exemplary damages of up to $4,000 per breach.”

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