Property management

Managing Tenancies

Tenant and Tenancy Problems

One of the main reasons that landlords engage the services of a property manager is our ability to deal with the large variety of tenancy problems that can (and do) arise, and our ability to minimise risk exposure and financial loss relating to these problems. Solving tenancy problems can require a range of skills and knowledge – primarily an intimate knowledge of the legal environment of residential tenancies in New Zealand, particularly (but not by any means limited to) the Residential Tenancies Act. While knowledge of your legal rights and responsibilities is very important, there are also other significant skills needed, such as the ability to negotiate, to communicate effectively, to use common sense and to assert your rights.

Unsurprisingly, the most common tenant issue is failure to pay rent by the date it is due. Failing to keep the grounds up to standard is a fairly common issue, as is wear and tear that falls outside reasonable limits, or outright damage. Noise and nuisance issues are not uncommon, and often relate to music, parties, loud televisions, domestic disputes and the like. Other issues that arise from time to time include unpermitted pets or occupants, unsuitable use of the premises (such as for a business), or such issues as smoking tobacco (or other substances) inside the property, or outside when not permitted. The range of potential issues is endless, but these would cover 99.5% of what we experience.

When issues arise it is often the case that with prompt, friendly action we can eliminate the problem or at least limit it and keep it from getting out of hand. In many cases, however, a firmer response is necessary, and tenants may not always be agreeable. Although tenants can have personal problems that can be contributing factors, breaches of the tenancy agreement and/or tenancy law are not acceptable. While we sympathise with the personal issues tenants may be facing, we will pursue whatever remedies available to us under the law. This is the reality of the world we live in.

Issuing Notices

The Residential Tenancies Act stipulates the formal processes of dealing with breaches of tenancy agreements and/or tenancy law.

If tenants are in breach of their Tenancy Agreement or the Residential Tenancies Act they are issued with a ‘Notice to Remedy’ pursuant to Section 56 of the Act. This gives the tenant 14 days to remedy the breach or breaches, meaning that this notice is often referred to as a ’14 Day Notice’ or similar.

If a tenant has missed a rent payment, for example, and does not respond to our attempts to make contact, a ‘14 Day’ notice will be served. Likewise we issue ’14 Day’ notices for repairs to damage to the premises, noise and nuisance, unkempt grounds, overcrowding, etc.

Tenants must be given this 14 day period to remedy any breaches before further action can be taken – this is a requirement of the Residential Tenancies Act. If the breach is not remedied within this period, an application is made to Tenancy Services for either mediation or a Tenancy Tribunal hearing. The outcome of the Tenancy Tribunal has the legal status of a court order.

Other notices that we issue (unrelated to tenant breaches) may include notice to inspect premises, notice to enter to do work, notice of intention to sell premises, notice to terminate tenancy, change of landlord notice, and notice to increase rent. It is important that the service of these notices, and their content, is correct. If not, there can be legal penalties to the landlord, and the notice will also be void.

Mediation

Should a breach of a Tenancy Agreement or the Residential Tenancies Act not be remedied by a tenant following the issue of a Notice to Remedy, we will sometimes make an application to Tenancy Services to have the matter settled by mediation. An application for mediation costs $20.44 (accurate as of February 2015).

The meeting is usually held in the local Tenancy Services office or by a telephone ‘conference call’ with the tenant, ourselves (as landlord) and the Tenancy Mediator present. It is a fairly informal affair but the issues are thoroughly discussed and the various options for resolution considered. If a solution can be agreed (say for instance an agreement for the tenant to make extra payments on top of rent in order to catch up rent arrears) then the agreement is written up by the mediator as a Mediated Order and all parties sign the document.

It is our practice to ask that all our mediated orders be ‘sealed’ by the Tenancy Tribunal which has the effect of turning the Mediated Order into a Court Order which in turn can be enforced by court bailiffs.

If we are unable to come to an agreement at mediation or the tenant does not show up to the meeting then we can ask that our application be automatically referred to the Tenancy Tribunal for a judgement hearing.

Tenancy Tribunal

We also sometimes opt to skip mediation and request a hearing at the Tenancy Tribunal instead, even for issues that could be resolved by mediation. This results in a final judgement that is not always obtained through mediation. An application to Tribunal also costs $20.44.

If we were unable to come to an agreement with a tenant following a mediation meeting, or should the tenant not attend the mediation meeting, or should the issue be of such a nature that mediation would be inappropriate, then we will automatically take the matter to the Tenancy Tribunal for resolution.

A Tenancy Tribunal hearing is held in a formal court setting with an official adjudicator presiding and with all proceedings being recorded. As we are generally the ‘applicant’ we are the first to put our case forward and it is vital that all the relevant evidence is properly presented and any relevant witnesses called. Evidence may be in the form of photos of the premises, rent records and tax invoices from tradesmen for repairs to damage, cleaning, rubbish removal etc. The other party can then respond and likewise present evidence and call witnesses. The adjudicator will then make a judgement based on what he has heard and this judgement is then written up as a Tenancy Tribunal Order. This order can subsequently be enforced as a Court Order by the bailiffs of the court.

Tribunal Orders may be issued for a variety of reasons including termination of the tenancy, the granting of possession of the premises to the landlord, ordering payment of rent arrears, making compensatory payments for landlord expenses, refunding part or the entire bond to either party, and the disposal of goods if tenants goods have been abandoned.

Debt Collection

Our company is not in the business of debt collection but we do take reasonable measures on behalf of property owners to try to recover as much tenant debt as possible.

Once a Tenancy Tribunal Order has been issued, a tenant debtor can ‘disappear’ with seemingly little hope of any debt recovery. In these cases we recommend placing the debt with TPS Credit Control, who have the capability, knowledge and experience to find and compel debtors to honour their commitments.