How to avoid fines and tenancy disputes

Managing a rental property can often be a complicated task – its not quite as simple as sitting back and collecting rent. There are many rules in place for landlords that are there to protect the rights of the tenants. If the landlord fails to comply with these rules, it may result in large fines and even prosecution. Here are some simple tips on how to avoid mistakes when managing a rental property.

  1. Discrimination
    When screening potential tenants for your property you are not able to base your selection on factors such as gender, marital status, religious beliefs, race, ethnicity, age, political opinions, employment status, family status or sexual orientation. By doing this, you will be displaying discriminatory behaviour in your selection which can result in a tenant taking the landlord to the Human Rights Tribunal if the believe they were turned down due to their race or ethnicity. As a landlord, you have the right to turn down tenants based on personal qualities such as being reliable and responsible.
  2. Unlawful entry
    While you are the owner of your home, if a tenant is renting your property it is their home. Landlords may want to check on their investment to make sure things are running smoothly but need to restrict this to regular scheduled inspections.While it is tempting to swing by if you are in the neighbourhood, you must give the tenant 48 hours notice and can only inspect once within a 4 week period or you run the risk of receiving a $2000 fine.
  3. Cleanliness and Maintenance
    Landlords should “maintain the premises in a reasonable state of repair” while a property is occupied by tenants according to The Residential Tenancies Act 1986. This applies before the tenants move in, when repairing damage, and compensating tenants for damage that’s not caused by breach of the Act.
    In 2013 the Tenancy Tribunal ordered a Wellington property owner to pay $3,757 to four tenants of a Cuba Street flat after it was found he “consciously misled” them about the state of the property’s earthquake damage. Sometimes making repairs or maintenance can be negotiated with tenants, who may be willing to move in for subsidised rent while work is made. Honesty is the best policy in any case.
  4. Supply of Services
    As a landlord you may be tempted to interfere with the supply of gas, electricity, water, telephone services and more if tenants are proving to be difficult or are late with payments in order to make them comply or pay. Section 45 (2) of The Residential Tenancies Act 1986 prohibits this and landlords found guilty of interfering can be fined $1,000 under the Act. The exception to this is when repairs need to be made for example you may need to shut off the water during renovations. The key to avoiding any disputes around this matter is clear communication with your tenants.
  5. Harassment of tenants
    You do have the same right as anyone else to knock on the door and speak to them. If you’re walking by and notice something is wrong, or you have forms for your tenants to sign, you should feel comfortable approaching them, just be aware of how often you do this. Don’t collect their mail or deliver baked goods as the pretext for snooping around the property.Some property owners who want to sell their rental have run into difficulties when potential buyers discover tenants are in for a fixed term. Owners who contact their tenants with sob stories of financial hardship and encourage them to end their tenancy early, constitutes harassment and can result in a $2,000 fine.

When managing your property, it can be worthwhile to have a thorough understanding of the Residential Tenancies Act 1986 to avoid falling into these pitfalls and tenancy disputes. A reputable property manager can help you avoid these five easy mistakes as well as the thousands of dollars in fines that come with it.

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