5.3 Health and Safety in Property Management
Overview
The inception of the Health and Safety at Work Act (HSWA) in 2015 put a greater emphasis on workplace health and safety following the tragic events of the Pike River Mining disaster. Being a landlord was no exception.
A landlord is operating a business and is therefore captured under the HSWA. Under the definition of the workplace in section 20 of HSWA, the property becomes a workplace when work is being carried out there.
The definition of a workplace is as follows.[1]
Section 20 Meaning of workplace
- In this Act, unless the context otherwise requires, a workplace—
- means a place where work is being carried out, or is customarily carried out, for a business or undertaking; and
- includes any place where a worker goes, or is likely to be, while at work.
Therefore, working in residential property meant that Property Management companies and landlords have duties to workers and other people to ensure that the property that they manage is safe.
Every time a tradesperson, a Property Manager or a landlord enters a property, the property becomes a workplace.
What we will cover
In this lesson, we will look at the following.
- What is a PCBU?
- The risks of non-compliant tradespeople carrying out work
- Potential fines under the HSWA
- Keeping yourself safe whether you are working in Property Management or working as a landlord
[1] The Health and Safety at Work Act 2015; S20: Meaning of workplace
5.2 Common Issues and Disputes
Overview
With over 20,000 Tenancy Tribunal applications in 2020[1] disputes are unfortunately an inevitable part of working within this industry. Particularly if you are a Property Manager, disputes are part of the territory and dealing with conflict is one of the major contributing factors to burnout and a high churn rate within the industry. If you are a landlord who has to deal with conflict, the emotional burden along with the financial stress can put you off being a landlord forever.
In this lesson, we will look at some of the most common disputes, examining what may cause them and what action you can take to resolve them without heading to the Tenancy Tribunal.
We also look at the psychology of disputes, teaching you what happens when you are challenging or criticised. Having a better understanding of this will help you keep your emotions in check and remain in control.
As you will have realized from our last lesson, Tribunals can be complex and time consuming. It is best to try and resolve disputes amicably and as quickly as possible.
[1] Tenancy Services data and statistics; https://www.tenancy.govt.nz/about-tenancy-services/data-and-statistics/
5.1 Mediation and Tenancy Tribunal
Overview
The vast majority of tenancies in New Zealand run smoothly and without any issues. However, inevitably, there will be disputes between a landlord and a tenant from time to time. Unfortunately, when communication breaks down those disputes may struggle to be resolved.
When parties cannot come to an agreement with regards to a tenancy matter, the Residential Tenancies Act provides a framework for compliance and the dispute resolution. This can result in applications to the Tenancy Tribunal.
Part 3 of the RTA covers the constitution and administration of the Tenancy Tribunal. This is a major part of the RTA, covering sections between 67 and 120.
In this lesson, we will be looking at how disputes are resolved through the Tenancy Tribunal system. Before we start, we want to emphasise the importance of having a positive and proactive relationship with your tenants. Too often, emotions and ego get in the way of resolving a dispute. It is best to try and resolve issues between landlords and tenants through dialogue rather than head to the Tribunal. However, sometimes, applying to the Tenancy Tribunal is the best and only option.
The Tenancy Tribunal works alongside Tenancy Services, the Government-run department that is set up to provide information to tenants and landlords as well as run dispute resolution processes such as mediation. Tenancy Services is a part of the huge Government department Ministry of Business, Information and Employment or otherwise known as MBIE for short.
4.3 The End of a Tenancy
Overview
In New Zealand, the average length of a tenancy is approximately 2 and a half years and at some stage, every tenancy will come to an end. There are numerous ways as to how a tenancy can end. This is covered in section 50 of the Residential Tenancies Act (RTA). With the recent implementation of the Residential Tenancies Amendment Act 2020, tenants now have greater security of tenure and landlords must have a valid reason to end a tenancy. Previously, landlords could give 90 days notice to end a tenancy without any reason.
You can end a tenancy under the following conditions.
- Either party gives notice. However a landlord must have a valid reason to end a tenancy. These are outlined in section 50 of the RTA.
- A fixed term tenancy comes to a conclusion and both parties agree to end the tenancy.
- Tenant acquires ownership of the property.
- The tenant surrenders possession to the landlord and the landlord accepts.
- By disclaimer, meaning any lawful person having power to disclaim.
- A tenancy is ended by order of the Tenancy Tribunal.
Throughout this module, we will look at the many ways in which a tenancy can be ended and relate them to the relevant sections of the RTA. The guidelines will ensure that you remain compliant as failing to give the correct notice can have dire consequences.
We will look at the following situations.
- When the tenant gives notice
- When the landlord gives notice
- Giving correct notice
- Tenancies ending by mutual consent
- Expiry of a fixed term tenancy
- Fixed term tenancies ending due to hardship
- Death of a sole tenant
- Destruction of premises
- Possession orders granted by Tenancy Tribunal
- Boarding house tenancies.
In this lesson, we will not look at Short fixed term tenancies which are covered under section 7 of the RTA, Service Tenancies which are covered under section 53 of the RTA and tenancies granted by an education institution which are covered under section 53a of the RTA. We will also not be looking at the responsibilities of a tenant at the end of the tenancy as they are covered in the inspections section of the module.
Sections 50 to 66 of the RTA covers Termination of tenancies and recovery of possession.
For periodic tenancies, the most common section of the RTA that holds relevance to ending a tenancy is section 51 (Termination by Notice)
This covers all aspects around one party giving notice to the other party in normal circumstances. When giving notice, the party giving notice should ensure the following.
- The notice has to be in writing
- It identifies the property
- Specifies the actual date the tenancy will end
- It should be signed by the relevant party
- If it is a landlord giving notice, they must state the valid reason for ending the tenancy
However, there is no special form that needs to be filled out when giving notice. If you do not cover off any of the above it does not mean that your notice will be held invalid.
4.2 All about property maintenance and care
Overview
The general poor condition of New Zealand residential rental housing has been well documented in recent times. As such, we are increasingly seeing a major overhaul around legislation that greatly impacts the condition of our rental stock. Legislation such as Healthy Homes and the Residential Tenancies Amendment Act 2020 will have a major impact on renting in New Zealand going into the future.
In recent times, we have seen the implementation of the following pieces of legislation that impacts the condition of the rental property.
This bill made it compulsory that all residential rental properties would have smoke alarms located in specific locations throughout the tenancy and set out technical and other requirements that the smoke alarms must meet. It also set out the requirements that all residential rental properties had to meet specific requirements for insulation.
The purpose of this bill was to ensure that all residential rental properties achieve minimum standards in regards to the following criteria.
- Standards for heating and the minimum achievable indoor temperature being 18 degree Celsius in living spaces.
- Standards for insulation, meaning that all residential rental properties must comply with the Building Code 2008 standards for insulation where it is reasonably practicable to do so.
- Standards around ventilation. This means that bathrooms and kitchens must have extractor fans and windows must be able to be opened in the living spaces and bedrooms.
- Moisture ingress and drainage. Moisture barriers are compulsory where it is reasonably practicable to do so. For example, if there is an enclosed subfloor space.
- Draught stopping standards. Unnecessary gaps or holes in walls, ceilings, windows, floors, and doors that cause noticeable draughts must be blocked. All unused chimneys and fireplaces must be blocked.
The standards have come into effect as of the 1st July 2019 and there will be a transitional phase up to the 1st July 2024 when all rental properties must comply with these standards. The standards can be found via this link. Residential Tenancies (Healthy Homes Standards) Regulations 2019.
The table below shows you the key dates around compliance with the Healthy Homes standards. A breach of these standards is a breach of section 45 Landlords Responsibilities and this could mean exemplary damages of up to $7,200.
Take the Healthy Homes tour of our Project Property
This link will take you directly to Housing and Urban Development standards about the requirements around the Healthy Homes standards.
The recent passing of this bill in July 2019 has resulted in the following changes in legislation. This has been influenced predominantly as a result of the Osaki case that led to tenants no longer being held liable for accidental damages. This has now changed. The bill has changed the following.
- Tenant liability for accidental damages. The tenant will be liable for accidental damage to a maximum of 4 weeks rent or the amount of the landlord's excess for insurance held on the property, whatever is less. It is an unlawful act to try and claim more than what you are legally entitled to (See section 49D of the RTA)
- contaminated properties which could be through Asbestos, mould or methamphetamine contamination. It stipulates that landlords cannot rent out a contaminated property and it also stipulates the landlord's rights of entry to test properties for contaminants.
- Unlawful dwellings. Importantly with regards to the compliance of a property or dwelling, Tribunal will now have the jurisdiction to make rulings on tenancies that are deemed to be unlawful. In essence, the Tribunal will have the power to make decisions such as end the tenancy, refund rent or issue work orders to ensure that the property or dwelling has consented. This is stated under section 78A of the RTA.
All of this means that the Property Manager and landlord have to have a far greater knowledge of compliance and legislation relating to residential rental properties. Although a lot of what we do is people management, there is an increasing amount of legislation and compliance relating to property management.
Much has been debated about the conditions of rental properties in New Zealand and where the responsibility should lie. What is becoming more apparent is that renting out poorly maintained and non-compliant properties comes with risk and no Property Manager or Landlord should be managing or renting out properties that fail to comply.
Throughout this lesson, we will look at the following aspects of property maintenance and care.
- Legal requirements around maintenance
- How to select a contractor
- Arranging maintenance work Categorizing the level of urgency
- What we spend on maintenance
- Pre-empting maintenance and troubleshooting
- Future trends and technology
4.1 All about inspections
Overview
Whether you are a landlord or a Property Manager, the property will need to be inspected on a regular basis. There are different types of inspections that you will undertake during the duration of the tenancy.
For Property Managers, this is a major part of what you do. Approximately one third of your time at work will be spent doing inspections.
In this lesson, we will teach you the following.
- The different types of inspections that you will undertake and the purpose of them.
- The legal rights of entry that you as the Property Manager has.
- Who is authorised to carry out an inspection?
- Inspection etiquette, what you should and should not do.
- Reporting and record keeping of the inspection.
3.4 The Tenant Induction
Overview
Congratulations!! You have selected a tenant and they have verbally accepted your offer. Now what do we do?
Having a detailed tenant induction process and spending quality time with the tenant prior to the commencement of the tenancy has many benefits. An investment in time spent at the beginning of the relationship will save time in the long term. It will also ensure that all parties have a clear understanding of their rights and responsibilities plus it gives the tenant an opportunity to ask questions and seek clarification on certain matters.
After the induction, the tenant will sign the Tenancy Agreement and you can then remove the listing from the market as the contract will be signed.
In this section, we will look at the importance of spending quality time with the tenant prior to the commencement of the tenancy along with the actual signing of the agreement. It is not just time that is important, the content in regard to what you will be covering are equally as important. There is no point in spending lots of time with the new tenant if you fail to cover off vital information with regards to their tenancy.
3.3 Selecting the right tenant
Overview
One of the most important tasks you will undertake is ensuring that you select the appropriate tenant for the rental premises. Get this right, and you will hopefully have a long-standing professional relationship with two parties who respect each other and understand what is expected from themselves and each other.
Get it wrong, and you could find yourself on a slippery slope, working with an over demanding tenant, dealing with someone who cannot afford the property or worse still, someone who is likely to damage the premises. Bad tenant selection can be the beginning of the end of what may have been a positive and productive relationship between a Property Manager and a landlord.
Although no individual can guarantee 100% how a tenant is going to perform, you can take some simple steps in establishing the true credentials of a tenant and with experience, it can be a simple process in identifying a poor applicant by just carrying out some simple background checks.
Tenancy selection is complex. You want to select the right tenant but you also have to be aware of legislation such as the Privacy Act 2020 and The Human Rights Act 1993. There are significant consequences for getting this wrong.
Throughout all of this process however, you must remember to treat all applications, successful or unsuccessful with respect and professionalism. You are dealing with human beings and we can be complex creatures who do not always react rationally. You also have to take into account relevant legislation which is not limited to the RTA. You will be dealing with the Human Rights Act as well as the Privacy Act.
In this lesson, we will not just teach you how to select the right tenant, but we will also teach you how to deal with unsuccessful applicants without jeopardising your reputation.
We will go through the following processes that you will follow around tenant selection. These will include the following.
- The criteria you will base tenant selection on
- How to read a tenant application
- What background checks you should undertake
- How long the process should take
- Understanding legal requirements
- Providing feedback to applicants
- Working with the landlord
3.2 How to host a viewing of a property
Overview
You have now successfully marketed the property for rent on multiple websites. You have a For Rent sign on the property that gives it a great local profile as well. Your listing has excellent photography with a professional video that is getting plenty of views. The listing gives the prospective tenants all the information they require including key features about the property and information about local amenities. Prospective tenants are looking at the listing and the enquiries are starting to come in. Now what do you do?
3.1 How to Market the Property
Overview
There are a number of steps and processes that you need to follow if you are to successfully rent out your property for the best achievable rent to the most appropriate tenant in the shortest amount of time. We also now have to take into consideration the impact of the Coronavirus pandemic which has led to a surge in virtual viewings of property. Technology has an increasingly important role to play in how we market a property.
In this lesson we will look at the steps you need to take and the challenges you are likely to face along the way. These steps include the following.
- Ensure the property is compliant
- Ensure you have authority to rent out the property
- Is the property already tenanted?
- Ascertain what the demand for the particular type of property is
- Identify the key features of the property
- Identify any issues or maintenance concerns
- Is there anything that you would recommend to help rent the property?
- What are the benefits of local amenities?
- Who is the most likely target market?
- What else is available that is comparable to your property?
- What will the rent be?
- How do I advertise it?