Landlord e-newsletter No.6: August 2008

Dealing with tenants who ‘flaunt the process’

Imagine you are a landlord who serves a 10 working day notice to remedy on your tenant who has fallen into rent arrears or committing some other breach. On the final day in the notice period the tenant pays the arrears. Great. But what if you have a tenant who is regularly falling into arrears or committing some other breach and, just as regularly, remedying the arrears or other breach just before the notice to remedy period expires?

Some landlords adopt a ‘three strikes and you’re out’ approach to tenants who breach a tenancy, says Jeff Montgomery. They resolve to terminate the tenancy, but need to be careful about how they proceed.

The tenant has not remedied the breach specified in 10 working day notice unless the tenant has paid all arrears and rent in advance before the 10 working days are up. So you could proceed to seek an order from the Tribunal under s56 of the Act which might include an order for termination or a consequential clause as part of the terms of an order for the payment of arrears.

But what about the case where your tenant seems to be playing you around and there is an identifiable history of ‘eleventh hour’ remedial action. If you have a tenant who pays all the rent arrears within the 10 working day notice period then the breach is remedied. But if you can prove this behaviour is part of a history then you can still proceed to the Tribunal to seek an Order for termination. You would be persuading the Tribunal that the (’repeated’) breaches 'were of such a nature…' that it would be unreasonable not to make an order terminating the tenancy – per s56.

’It is not very common, but seeking an eviction order in cases of recurring breach like this could give a landlord a more effective termination process than just relying on a general 90 day notice to terminate using s51 of the Act,’ Jeff Montgomery says.

A  landlord may give a 90 day notice for no reason under s51. If there are clear surrounding circumstances of a recurring tenant breach which have frustrated the landlord, using a general s51 notice  is not a retaliatory measure. The landlord is acting to mitigate breaches by the tenant. It is the tenant who has been the instigator of a history of breaches

Naming all tenants on the agreement

Landlords should name every tenant they intend letting their property to on the tenancy agreement. If you want to include the names of tenants who are under 18 years of age as legally bound parties to the tenancy agreement, then you need to apply to the Tenancy Tribunal.

Some landlords will insert a clause in the agreement restricting the number of tenants who can live in the property or restricting any sub-letting or assigning under the tenancy.

If one person, or a specified group of people, signs the tenancy agreement and then gets in flatmates, the person(s) who signed the tenancy agreement remains the head tenant. Flatmates who don’t have their names on the tenancy agreement are not tenants and will not be responsible to the landlord for rent or the state of the property.

Specific forms of agreement can be made to cover flatmate and house sharing situations. See an example in the Flat or House Sharing Agreement

Landlords should also review their insurance policy terms and conditions to make sure that the way they are dealing with the naming of tenants, and tenancy agreements generally, do not jeopardise potential claims they may have to make on the policy.

Allowing your tenant to keep pets on the premises

Some landlords strictly refuse to allow a tenant to keep any type of pet on the premises. But what happens when the best tenant for your property asks about keeping a pet?

The answer is that you both need to agree in advance the conditions that the tenant may keep the pet on the property.   This means agreeing at the commencement of the tenancy and writing it into the residential tenancy agreement.

If you let a unit title or cross-lease property, you should also check the terms of the body corporate rules or leases to see what restrictions there may be on keeping animals.

If your tenant wants to keep a dog on the property, some examples of terms you could agree on together include:

• The…….. (insert breed of dog) dog named …. (insert name) and aged (insert age) and registered (insert number of registration) must be suitably kennelled at … (identify location of kennel on property) and must not be allowed to live inside the house.
• The tenant acknowledges that the landlord has agreed to allow the tenant to keep (insert name of dog detailed above) on the property  as a specific term of the agreement and the landlord does not warrant or imply in any way that it will consent to other dogs being kept on the property in the future.
• If the tenant wants to keep a different dog than (insert the one detailed above) the tenant must get the landlord’s written permission first. The landlord is not obliged to consent to any other dog being kept on the property.
• The tenant is only allowed to keep … (insert number) dog(s) at any time.
• The tenant must remedy any damage caused by the dog to the house or grounds immediately.
• The tenant must regularly clean dog fouling from the grounds.
• The tenant must care for the dog properly and comply with general SPCA standards and guidelines for the treatment of dogs.
• The tenant must control the dog so that it is not allowed to roam beyond the boundary section and it is not allowed to create any other type of nuisance to neighbouring properties.
• The tenant must restrain the dog on the days the landlord advises an inspection is due to be carried out.

To avoid any doubt about the significance of the terms chosen from this list, the parties could then state:

“If any of these terms are breached, the landlord may follow standard procedures relating to breach of tenancy agreement.”

New landlord education resource coming later this year

The finishing touches are being made to a new CD Rom designed to help landlords manage their properties better. It contains all the forms and documents that landlords use from the start to the finish of a tenancy as well as useful information sheets.

The CD also features video interviews with real landlords and property managers, who provide tips and insights on all aspects of managing tenancies.

The CD is likely to be available in mid August. Watch this space and our website for more news.

Bill introduced to modernise unit titles law

A bill to help apartment owners and bodies corporate to manage their property more effectively was introduced to Parliament today by Building and Construction Minister Shane Jones. Read the Minister's news release about the introduction of the Unit Titles Bill 

Greater protection for tenants under new RTA bill

The Residential Tenancies Act (RTA) amendment bill introduced to Parliament today will give greater protection to vulnerable tenants and; help both landlords and tenants to understand and enforce their respective rights, according to Building and Construction Minister Shane Jones. Read the Minister's news release about the new Residential Tenancies Act amendment bill

Landlord of the Year

The Department is sponsoring the landlord of the year award at this year’s New Zealand Property Investor Federation Annual Conference.

Closing date for the receiving of entries is 15 September 2008. See the New Zealand Property Investor Federation website for more details.  

Energy Efficiency Consumer Awareness Programme

Download information on the new insulation requirements and the technical details involved in Your Guide to Smarter Insulation

Find out how to lower your power bills, have a healthier home and reduce your household’s impact on the environment in Your Guide to a Smarter Home 

You can also link to EECA insulation subsidy news here (www.eeca.govt.nz) and solar water heating  subsidy news here (http://solar.energywise.govt.nz/

Seminars for New Landlords

Our successful series of seminars for new landlords offers you practical tips and useful opportunities to ask questions. The remaining seminars this year up to Christmas are avilable on our Events and contacts page.