Propertyscouts Hamilton

Propertyscouts August 2018 Newsletter - 1st Aug 2018

Propertyscouts NZ Monthly newsletter – 1 August 2018
Providing heating in rental properties compulsory:  Up until recently it was considered sufficient that the living area in a rental property had a power socket which allowed a tenant to plug a heater into.  Unfortunately, it seems that is not the case if a recent Tenancy Tribunal decision is any indication. The property involved in the Tenancy Tribunal case had no form of heating, but it did have electrical sockets in the living area which could be used to plug in a heater.  The Tribunal adjudicator found that this was not sufficient and that the landlord had to supply some sort of heater which could be plugged into the electrical outlet.  The type of heater required was not stipulated by the adjudicator, but it seems that this will now be the stance taken for all similar matters heard by the Tribunal.  To avoid having costs awarded against them, landlords with rental properties which have no form of heating will have to provide a heater of some kind.  Our advice to landlords in this situation is to take advantage of the endless Briscoe’s sales and purchase a cheap heater which can be included on the tenancy agreement chattels.

Market updateLast month we reported that pressure was building on various property fronts, from population growth, the attraction of high rental yields, low interest rates and local gross domestic product growth.  According to an article in ‘’ the fundamentals for residential property investment are slowly improving as rents rise and house prices ease.  Gross rental yields increased in 25 of 56 locations throughout NZ.  According to the article, the latest figures suggest the residential investment market is continuing to turn slowly, with capital gains drying up and rental returns becoming more important for investors.  At the coal face we are seeing a shortage of rental properties right across the country.  This is leading to very strong tenant demand at a time of year when historically the market is normally quiet.   
The ‘bite’ in the bright-line test:  On 29 March 2018 the bright-line test applying to profits gained following the sale of a rental property was extended from two to five years.  An IRD assessment of the voluntary compliance with the bright-line test from its inception in 2015 revealed less than 50% compliance.  Not surprisingly, the IRD take a dim view on tax avoidance and a spokesperson was recently quoted as saying that IRD would take every action available against people who deliberately avoid their tax obligations.

Tenancy Services scam:   Some landlords have been the subject of a scam where they have received an ‘automated phone call’ purporting to have come from the Government agency – Tenancy Services.  Tenancy Services don’t make any automated calls so if you receive a call such as this, hang up straight away.  Scams are unfortunately just a part of life these days.  It pays to be vigilant and suspicious of any calls you haven’t instigated.

Insulation:  Tick tock, tick tock.  As we get closer to 1 July 2019 when it becomes compulsory for ALL rental properties to be insulated we are starting to draw up contingencies for properties that either haven’t been insulated, or where we don’t have the required insulation information.  In situations where these properties become available for rent between now and then we will only be able to ‘fix’ a tenancy up until the 1 July 2019.  Beyond that date it will be an unlawful act to rent a property that is not insulated.

FAQ:  Do tenants have to notify landlords of maintenance they become aware of at their rental property?  The answer to this question is yes.  Where it can be shown that the tenants delayed or didn’t advise the landlord of an issue which resulted in additional damage to the property the tenants may be liable for the additional damage. 

Disclaimer:  Given the opinions expressed in parts of this email it’s important that we make it clear that the contents of this email are opinions and observations and made in good faith.  We suggest that in all cases independent legal and financial advice is sought.

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