The following article first appeared in the October 2023 issue of the NZ Property Investor Magazine and is reproduced here with the permission of the owner. Click here to subscribe to the NZ Property Investor Magazine direct or contact us to add the subscription to your APIA membership at a discounted rate.
I don’t want to jinx things, but if the polls are anything to go by we are inching ever so close to interest deductibility and bright-line scale-back.
You can practically feel the buzz in the air, and about time. After the six years we’ve had, our raw nerve endings could do with soothing. A return to common sense taxation should do the trick, but don’t expect rental property ownership to suddenly be a day at the beach.
Things on the tenancy side are far less dynamic in this election cycle.
Sure, the Nats promise to reinstate 90-day no-fault termination, and the Greens have a litany of demands, including a rental WOF and a 3 per cent rent cap. Exciting, but not course-altering.
The constant and sometimes punishing drumbeat calling for landlords to upskill will continue irrespective of who ascends the throne come October. The electoral maths is there plain as day: renters grossly outnumber landlords and rent longer.
A politician who calls renting a hobby sport for landlords carries his valedictory speech in the back pocket. If you are waiting for the 54th parliament to lower the bar of expectation on landlords, you will be sorely disappointed.
Rubber and roads
I’m not trying to be glib. I’m a big supporter of landlords being held to a high standard. And I’m often part of the chorus that calls for raising that standard even further. We are in the business of providing homes.
Such is our power and privilege; the least we can do is take care and be accountable. But the thing about professionalism is that it sounds simple enough when it is not you who has to professionalise.
And now the rubber has hit the road, it’s apparent there are still many growth pains and shifting norms for landlords to grapple with. New Zealand tenancy laws are not so much difficult as they are complicated. The smallest details have the biggest consequences. An incomplete diary note could be the difference between a lawful termination and a retaliatory one. You get a say if your tenant asks to install a spa pool in one spot, but move that spot a few metres? Step aside, it’s now the tenant’s prerogative to have the pool in the first place!
A lack of detailed codification makes much about the rights and wrongs of tenancy circumstantial. There is a certain wisdom to that; renting is as entrenched as it is disparate and ever evolving. It makes sense to have nimble and broad rules that can be applied to most situations.
However, a lack of precision and certainty makes compliance incredibly tricky for landlords. How can we professionalise if there is no clear goalpost?
Fair and just
The most frustratingly problematic phrases in the Residential Tenancies Act for its users are “if the tribunal is satisfied” and “the tribunal may”. Both phrases and their equivalents appear in the act 174 times. That’s 174 reminders of the tremendous power an adjudicator wields. Does she concur with your version of events? How detailed must your paperwork be to meet her satisfaction?
Even if you’ve painstakingly dotted all the i’s and crossed the t’s, it could all be for nought if she disagrees with your view of what is fair and just. Every tribunal application feels like a game of Russian roulette, and I don’t know about you, but most landlords I’ve met have no taste for gambling.
Despite the system’s inherent inconsistencies, clarion calls for landlords to be and do better will continue to surface and drive public narrative and policy. Tenancy education is now critically intertwined with a landlord’s outcome. It’s no longer a nice-to-have but a you-would-be-a-fool-not-to.
Sarina Gibbon is the general manager of the APIA.