More Flies with Honey…

There’s a clear war of words in the media of late – it’s based on strong held emotive feelings. Some of the sentiment is qualified and understands, from experience, both sides of the ledger. Most of it isn’t…

I am talking about Landlords and Tenants.

Read any article on property, (yeah it could be click-bait, but it still gets an audience) and go to the comments section. It’s highly emotive and divisive.

Having been a property investor for around 15-20 years, I’ve seen a few cycles and I haven’t had any issues or grievances with any tenants or them of me – until last year.

I spent around 6 months in 2016/17 in the tribunal process – both as a claimant and as a defendant – in relation to 2 separate properties in 2 different cities. I learned a lot about how the Tenancy Tribunal and Residential Tenancy Act works.

Given I have been a tenant, flatmate, first home buyer, investment portfolio owner and hence landlord, I can relate to the various views – the strong views – people have.

What is clear is that Tenants and Landlords are more polarised in their views than ever before.

Sadly – I believe the strength of opposing views will only get worse before it gets better.

It is my view that both Tenancy Services and the Tribunal court consistently interpret the RTA (Residential Tenancy Act) in favour of the tenant – at all costs.

Even when the Landlord can prove (or more importantly the tenant doesn’t prove) their case (if the tenant has lodged the case – which is supposed to be the obligation on the part of the party lodging the complaint), the tribunal court seems to begrudgingly err in favour of a landlord but then helps the tenant to find ways of mitigating the penalties that they may be liable for by guiding them to technicalities/different parts of the act.

I have witnessed the tenant being actively coached on how to substantially change their claim so that they can try and catch the landlord on technicalities that would come under completely different areas of the act to those which they were originally claiming under (i.e. the original sections of the act they have stated as being breached were found not to be breached HOWEVER the adjudicator OPENLY GUIDED them to other areas to help them find an alternative option…).

At this point – I need to make it very clear that I have no time for slum-lords. I am in favour of new legislation that is focussed on healthy, happy, rental homes.

I have no respect for landlords that have no respect for their tenants and I agree, entirely, that they should be accountable for their actions (or lack of action) and that tenants have the right of recourse to get action on a property that should meet minimum standards. I have empathy with people trying to afford rent, let alone buy a home and be able to afford the mortgage repayments as well as put food on the table and have the odd bit of indulgence on the side (god forbid!).

Residential Tenancy Act (RTA) changes such as insulation and heating are great initiatives and have been well planned and introduced by the previous and current government – these are the types of initiatives long-term landlords, with plenty of notice, will gladly invest in. It creates happier tenants and, I believe, is an additional cost both Landlords and Tenants (through increased rents) will be glad to wear.

I want my children to be able to live in a society whereby it’s possible to buy your own home without having to sacrifice your family, relationship and health. Of course, to be able to do this, they need to be able to flat/rent at an affordable rate to be able to save for that home.

However, we need to be able to have confidence that legislation, and the agencies that are appointed to enact it, can be relied upon to be fair and to rule within the intent of the act at all times – i.e. to be trusted for their fairness and lack of agenda.

I was a tenant. I am a landlord. I too have bills to pay. Last week I had to find $1200 for unexpected plumbing repairs on my rental. That’s the same property I haven’t increased the rent on for around 3 years whilst the market has probably gone up by 20% or more. I try and keep rent at a level I know it’s easy to pay and in turn, I expect the house to be looked after without resentment that I am ripping them off. But I had to find the $1200. For the record, the tenants are awesome, they look after the house and grounds and we look out for, and respect, one another.

Long-term landlords know that there are good times and bad – they are willing to stay in it for the long run and invest if they can be confident it’s a good investment and that the appointed agencies will rule within the act as it was intended.

Let’s not kid ourselves that a heavy-handed and biased interpretation of the act by Tenancy Services is a good thing. All it does is create a lack of confidence that the appointed agency operates with integrity and fairness to both Landlords and Tenants.

Currently, it costs $20.44 to lodge a claim with the Tenancy Tribunal.

I had tenants “having a crack” for 5 and ½ years of rent based on a technicality they thought they had discovered. This equated to an initial claim of $200,000 against us. The tribunal court can only hear claims up to $50,000. The claimants were allowed to (coached to) reduce the claim to $50,000 upon being told of this upper limit – which in itself should point to the fact that the claim was opportunistic in its intent. It cost us $20,000 to defend. The Adjudicator asked us why we felt we needed to spend the $14,000 we did on a lawyer when, instead, we should have just trusted the tribunal court process and represented ourselves. I think you will understand how we felt about this question being posed to us when for a cost of only $20.44 to the tenant, we had to defend against a potential risk of $200,000 (initially).

If all it cost you was $20.44 to have a crack at $50,000 and you knew the court rarely if ever, penalised opportunist claims – would you have a crack?

I hope sanity prevails in the short term and the focus is on pragmatism versus the witch hunt it seems to be based on currently.

Landlords AND Tenants – remember, “You catch more flies with Honey than you do with Vinegar”

Tips to avoid my recent experience:
Check your prospective tenant or landlord online: https://forms.justice.govt.nz/search/TT/

Landlords
1. Ensure you know the Residential Tenancy Act inside out;
2. Understand your obligations and follow stated processes;
3. Bear in mind, every case is documented and available and Landlords, as much as Tenants should not abuse the Tenancy Services Process unless it’s genuine and with evidence
4. Don’t get complacent;
5. Ensure your properties are safe and sanitary;
6. Communicate often and with clarity with your tenants
7. Continue to treat your tenants with respect – respect gets respect (more often than not)

Tenants
1. Respect gets respect;
2. If you don’t get respect, move;
3. Don’t abuse the intent of the Tribunal Services Application Process – it may cost $20.88 to “have a crack” at anything but, if it’s not genuine, and you lose, there is a record of this and a smart landlord will check this before renting to you in future;
4. Communicate with your landlord or property manager – treat them with respect and you will get respect – it’s only the minority that are sharks;
5. Honour your obligations. Every time, on time, as a priority. This will create good faith and a healthy, respectful relationship with the landlord such that when you need things done/fixed, they are more likely to be responsive and prioritise you;

#pauldowknowhow