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Property Management Resources

Rental property management can be a difficult business dealing with both the wishes of landlords, the rights of tenants and the housing standards for rental properties. Often it can be tricky trying to find all the information that you need when you have an urgent matter to deal with so we here at Wolfbrook Property Management thought we would share some of our collective experience in managing over 340 rental properties to help landlords and tenants alike so that everyone can have the best possible experience when renting a property without disputes arising. 

Some of the topics we will cover are:

  • Heathy Homes Standard
  • Tenancy Tribunal
  • Private Boarders vs Tenants
  • Property Inspections
  • Bonds
  • Letting Fees

New Healthy Homes Standards

The Healthy Homes legislation passed into law by the Labour government seeks to improve the quality of the nations rental housing stock by setting minimum standards across heating, insulation, ventilation, moisture control, drainage and draughts. 

Although the law was passed into effect on 1st July 2019 there is a lead in period for all parties involved to make the required updates to their properties before the law will be enforced. 

The key dates for the Healthy Homes Bill are:

  • 1st July 2021 
    • After this date all private rentals must comply with the standards in the bill within 90 days of a new or renewed tenancy.
    • From this date all boarding houses must comply with the standard
  • 1st July 2024
    • From this date all private rentals must comply with the healthy homes standards. 

So what are the standards that landlords need to comply with?

 

Heating

Landlords must supply one or more fixed heating sources that are capable of heating the main living area up to the WHO standard of 18 degrees on the coldest day of the year. In Christchurch for instance this figure is set at -4 degrees while in Auckland it will be warmer.

To calculate the required amount of heating capacity you will need to supply in your rental property you can use this tool which takes all the measurements of your property and combines it with the climate in your location to give you a Kilowatt value.

Heating Assessment Tool

There are also some restrictions on the type of heaters which count towards this requirement with open fires and unflued combustions heaters not eligible.

If you believe that this is impractical, impossible or unnecessary to meet the heating standard under the new rules at your property are some exceptions that you can apply for an exemption under.

To see if you are eligible head to General Exemptions to Healthy Homes Standards

 

Insulation

Insulation is important when it comes to retaining the heat generated so a house is efficient to warm and tenants do not choose to leave the heater off due to all the heat escaping.

A well insulated property has many benefits including being more efficient to heat which in turn leads to a drier property that is less prone to moisture issues that give mould a chance to thrive. 

Insulation products such as Pink Batts are measured on the R scale which tells you how much heat energy is retained. The higher the R value the better your insulation is at keeping you warm.

The minimum required amount of insulation depends on what zone you are in:

 

Zone

Ceiling

Underfloor

1 – Upper North Island 

R 2.9

R 1.3

2 – Coastal areas of the North Island below Auckland

R 2.9

R 1.3

3 – The whole of the South Island + Central North Island

R 3.3

R 1.3

This insulation is also required to be a thickness of 120mm.

Ventilation

There has been increasing awareness in recent years of the negative health impacts from poorly ventilated homes that lead to conditions where mould and dampness can thrive. This can lead to a number of respiratory illnesses such as asthma and bronchiolitis.

The key points of the ventilation standard of the healthy homes bill are that all rental properties must have openable windows in the living room, dining room, kitchen and bedroom. 

These windows should be a minimum of 5% of the floor area of the given room and able to be left in an open position. While the new standard doesn’t specify it we would also recommend fixing security latches to any window that could be used to gain access. This is so that tenants have the confidence to leave their windows open and get the benefit of ventilation without worrying about security.

In addition to this kitchens are bathrooms must also be fitted with extractor fans. For any fans or rangehoods fitted after 1st July 2019 they must meet the following specifications.

Kitchens

  • Minimum Diameter – 150mm
  • Exhaust Capacity – 50L per second

Bathroom

  • Minimum Diameter – 120mm
  • Exhaust Capacity – 25L per second

To calculate the ventilation requirements for your rental property under the standards: https://www.tenancy.govt.nz/healthy-homes/ventilation-standard/ventilation-tool/ 

You can also check if any of the general exemptions apply to your rental property:

https://www.tenancy.govt.nz/healthy-homes/exemptions-to-the-healthy-homes-standards/ 



Moisture Ingress and Drainage

While ventilation stops moisture from building up on the inside of your rental property drainage is important to stop moisture from seeping in from outside. To stop this happening your property will need to be able to efficiently remove storm, surface and groundwater. This system must use gutters, downpipes and drains for the removal of water from the roof. Rental properties that have enclosed subfloor areas like a basement must also have a ground moisture barrier (such as polythene sheet) installed if practicable to do so. 

You can check if you property is exempt from the moisture and drainage standards here:

https://www.tenancy.govt.nz/healthy-homes/exemptions-to-the-healthy-homes-standards/ 

 

Draughts

Draughts that allow currents of cold outside air to pass through the house can make any insulation or heating sources that have been installed redundant or lead to high energy bills. Therefore the new healthy homes standard also requires properties to prevent any unreasonable gaps or holes to the walls, ceilings, windows, skylights, floors and doors. This standard also applies to any unused fireplaces and chimneys which need to be closed off.

While there is no set maximum permitted gap size you can find out more information in the technical guidance document which will help you identify any gaps to be fixed.

https://www.tenancy.govt.nz/assets/Uploads/files/healthy-homes-standards-draught-stopping.pdf 

 

Tenancy Tribunal

The tenancy tribunal exists to resolve disputes between landlords / property managers and tenants that haven’t been able to be resolved through talks. 

Both tenants and landlords can take matters to the tenancy tribunal which handles over 20,000 cases per year. Often this is over things like unpaid rent, the property not meeting standards or tenants abandoning the property. 

If you wish to take a case to the tenancy tribunal there is an application fee of $20.44 (including gst) and you can make an application online.

Once this has been submitted you will be issued with a hearing date which is usually around 20 working days after the application.

To compare previous cases at the tenancy tribunal you can look them up here

https://www.tenancy.govt.nz/disputes/searching-tribunal-orders/ 

If you are finding yourself requiring to go to the tenancy tribunal more often that you would like then it may be a good time to consider changing property managers and talking to one of our Christchurch property managers today.

Private Boarders Vs Tenants 

Most people think of boarders as the kids from out of town who attend their high school but boarders are also classed as those who rent a room privately from an owner who also lives at the property.

While there is a clear understanding of the process when renting an entire house out to tenants there is less understanding when it comes to private boarders. 

With many first home buyers struggling with affordability it is becoming a more popular option to rent out a room to a private boarder to help cover the mortgage. Although it might not feel like it at the time when you take in a private boarder you are essentially taking on a part time property management role.

Here are some key differences and things to think about if you are considering this option.

 

  1. Residential Tenancies Act

    1. Unless you are renting out rooms to more than 6 boarders the residential tenancies act will not apply to your situation.
      • This means that as owners/landlords you are largely free to create your own terms and come to an agreement with the person looking to rent a room. 
      • We recommend creating and signing a Flat/house sharing agreement so that everything is agreed and in writing.
  2. Bond

    • It is up to the owner to decide if and how much to hold as a bond and this does not have to be lodged with Tenancy Services. 
    • It is typical for owners to ask for the same 4 weeks rent as many property managers do. 
    • To save disputes later on this should be recorded in writing and the process of returning the bond clearly laid out. If the bond is not returned then it is a matter for the Disputes tribunal and not the Tenancy tribunal.
  3. Services

    • When you write out your house sharing agreement you should decide how services such as Power, Internet, Waste and Water should be paid for. You may decide on a fixed weekly fee upfront or to split each bill as they come through. 
  4. Insurance

    • As private boarders have full access to your home you may find that if anything was to go missing that it would not be covered under your contents insurance. 
    • Likewise you should also check to see if your private boarder has liability insurance just in case they cause any major damage to your property.
  5. Tax

  6. Notice Periods

    • As private boarding is not covered under the residential tenancies act the notice period for ending the agreement or for raising the rent depends on the agreement that is in place.

If there is any disagreement between an owner and private boarder you can reach out to these services:

 

Property Inspections

Property inspections are an essential part of property management for keeping track of the condition of a property and ensuring that it is being well looked after. This is why some property insurance companies make regular inspections a condition in their insurance contracts. 

There are some rules around property inspections however that it pays to be aware of so that you maintain a good relationship with your tenants. 

  • Inspections can only take place between the hours of 8am and 7pm 
  • The maximum frequency is once every 4 weeks (unless you need to reinspect something to ensure it has been fixed)
  • Landlords and property managers are required to give 48 hours notice before carrying out an inspection or a reinspection. Ideally this notice should be confirmed in writing via an agreed channel so that you can reasonably expect that they have received it and have proof of the date. 

Photos are a key part of property inspections and allow you to accurately keep track of the condition of the property. When carrying out an inspection you should try and take care to respect the privacy of the tenants living there and while you should take photos for your records where possible try and avoid any personal belongings. 

 

How to manage bonds

Bonds are collected to protect the landlord and property manager from any damages or unpaid rent that may occur to the property during the lease period. This money is charged upfront before new tenants move in and is returned to them after they have moved out and the final inspection has been carried out minus any deductions. 

Bonds can be up to a maximum of 4 weeks rent which we recommend doing and once collected need to be lodged with Tenancy Services within 23 days. 

If the tenancy is being extended or there are new flatmates being added to the tenancy agreement then you can transfer your existing bond over. 

If the rent is increased after a rental appraisal then the property manager or landlord can ask for an additional top up of the bond so that it remains 4 weeks rent. 

When it comes time to end a tenancy the landlord or property manager will carry out a final inspection and then let the tenant know the cost of any work that needs doing or unpaid rent that needs to be covered. This amount is then stated on the bond refund form.

If this bond deduction cannot be agreed on then both parties will need to go to the Tenancy Tribunal in order to settle the matter. 

Bound Refund Form

Once submitted the bond should be refunded to your account within 10 working days. 

If the bond isn’t claimed within 6 years of the tenancy ending then it will become the property of the Crown.

 

Property management & letting fees

Since the 12th December 2018 letting fees have been banned in New Zealand. Prior to this it was common for property managers and landlords to charge the equivalent of 1 weeks rent to cover costs such as advertising, showing houses and background checks. 

Anyone found to still be charging letting fees to tenants can now be charged with $1,000 however property managers can still seek to charge these fees to the landlord based on their agreement. 

If the tenant chooses to make changes to the tenancy such as subletting or breaking a tenancy early then landlords and property managers can still recover reasonable expenses incurred in this process.

At Wolfbrook we are transparent about our property management fees which we are happy to talk about with you at any time.