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Property Owner Update December 2017

Unlawful properties update:

For those of you who haven’t followed the Dunedin case of Vic Inglis and the case of his unconsented property here it is in abbreviated form. Inglis rented his property to a female tenant after having lived in it for a short time himself. During the tenancy there was an issue with the tenant and Inglis took her to the Tenancy Tribunal. The tenant made enquires with the Dunedin City Council and found that some alteration work at the property had been applied for but had not been signed off once it was completed. The tenant made a claim for all of the rent that she had paid on the basis that the property, by virtue of the fact that it had unconsented work, was unlawful. The Dunedin Tenancy Tribunal adjudicator agreed with the tenant and Inglis was ordered to pay back all the rent that the tenant had paid while in the tenancy. Inglis was able to show that the alterations had all been completed properly and obtained retrospective sign-off but the adjudicator was not swayed by that. Quite rightfully in our view, Inglis appealed and Judge Kevin Phillips overturned the TT decision. Thank God for common sense. In summary Judge Phillips found that the adjudicator took too literal a view on a previous High Court decision. He found that the alterations to Inglis property had been completed appropriately, and that the tenant was in no way adversely affected by the fact that the work hadn’t been ‘officially’ consented. The tenant was ordered to repay the rent and the original TT order was overturned.

Learnings from this decision are many. Firstly, the TT is not always right (well we knew that already). The Tribunal has a duty to ensure fairness to both landlords and tenants and in this case the original outcome was patently unfair to the Landlord. The moral of the story is however – rental properties need to have the correct consents in place. If for example a tenant (or anyone for that matter) is hurt or adversely effected because of unconsented building work the Tribunal has the authority to fine a landlord up to $50,000.


Crystal ball gazing – the changing face of the rental market:

The business of being a landlord is constantly changing, but never more so that the last few years. There’s a lot to negativity around at the moment, particularly from landlords, but having had a good gaze into our crystal ball we don’t agree with all of the doom and gloom. The demographics amongst renters is shifting. Gone are the days when landlords were the wealthy ones and the tenants the poor ones. More and more we are finding that our tenants are wealthy professionals who have made the choice to be not tied down with property ownership. These people want good quality, well maintained properties and they are prepared to pay the appropriate rent for them. Neither are they ‘transient’ so landlords renting to these tenants can expect their properties to be well looked after and for the tenants to be there for the long haul. And while we are at it let’s not dismiss the effect automation in our lives is going to make. For example, it’s been predicted that no more petrol cars will be built after 2025 (that’s only 8 years away folks) and five years after that most journeys will be undertaken in Uber style self-drive electric cars! We’re not quite sure how we feel about that, but moving on – people will be able to live further away from where they work as they will work while being driven by an unmanned electric car on their way to the office (if they even ned or have an office that is). Car parks and home garages will be a thing of the past ….hmmm how many more bedrooms could I fit into that rental if I no longer need the double garage? Yes things are going to change but rest assured the world is always going to need rental properties and landlords.


Market update:

Trade Me have advised that there has been a big drop in rental listings compared with last year. Their rental property index found the number of rental listings last month was down 50% on last year! They reported that they hadn’t seen that kind of drop in advertising previously. So what’s it all about? According to head of Trade Me Property, Nigel Jefferies it has to do with credit restrictions on first home buyers meaning fewer can get into the market and were therefore renting longer. He also said that new legislation on capital gains tax could be scaring off new landlords. He said the average rental property was receiving 28% more enquiries on the auction site in the first week of listing, compared with a year ago. We aren’t sure of the exact percentages here in Dunedin, but there is no doubt that good quality properties, advertised at the right rent are highly sought after and are being snapped up like hot cakes. The other trend we are noticing is the high number tenants opting to sign back on for another year’s tenancy.



Q: Does a fixed term tenancy agreement automatically extend?

A: No, it doesn’t. Where a landlord wishes to end a fixed term tenancy at the conclusion of the tenancy he/she must write to the tenant between 21 and 90 days from the tenancy ending advising the tenant that the tenancy will end on the due date. If the landlord fails to do that then the tenancy automatically reverts to a periodic tenancy and the landlord would need to give the tenant 90 days notice for them to vacate.

Insulation reminder: 2019 is just around the corner and we have already started hearing reports of insulation prices increasing. If your rental is not fully insulated by the time its compulsory then it will probably cost you twice as much. Get in and get it done now before the price rises.


Next Disbursement:

Friday 15 December 2017.



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.


Kind regards,


Ryan Weir
Business Owner

December 15th, 2017