Business Profiles

Rental housing overhaul long overdue

The landscape of property management is changing and the days of letting your investment property to a ‘mate of a mate’ on a handshake is gone, or at least it should be.

In recent years the industry has undergone massive change and Propertyscouts Hawke’s Bay owner Duncan McLean warns there are more changes on the horizon. He says those who aren’t abreast of the changes can no longer bury their heads in the sand on the matter with the Ministry of Business Innovation and Enterprise working hard at identifying landlords operating outside the law and holding them to account.

A Whanganui property management company was ordered to pay $34,500 in damages for multiple counts of failing to lodge bonds and failure to provide insulation statements on tenancy agreements.

Duncan purchased the Hawke’s Bay franchise in 2016 after spending 18 years as a police detective.

“It’s not so different to policing in many ways. Communication is key, we forge relationships with all walks of life, ensuring tenant and landlord obligations are understood and met, always diplomatically and where possible with a smile.”

Duncan has assisted private landlords through the transition into professional management, often after issues have arisen.

“Often the friendship between the owner and tenant is a barrier to effective management of the investment. Properties are under-rented and inspections are not completed in a timely manner due to a perceived breach of privacy. I really enjoy the positive feedback from landlords who no longer have the stress but are enjoying better yields from their investment, knowing

Rental housing overhaul long overdue

Coming of age for residential rental market that the properties are now compliant with the Residential Tenancies Act. Many private landlords aren’t aware that without recorded three monthly inspections their insurance policies are likely void.”

He says there is no place in the industry for owners not willing to maintain healthy and dry properties, nor property managers not willing to toe the line.

Minister for Housing & Urban Development Phil Twyford makes no secret of the need for change believing proposed changes will “strike a new balance between providing tenants with more secure tenure and allowing them to make their house a home while protecting the rights and interests of landlords.”

Mandatory smoke alarms, minimum levels of insulation (by July 1st 2019) and a raft of proposed changes under the Healthy Homes Bill addressing heating, ventilation, insulation, moisture ingress, drainage and draft stopping are just some of the changes.

Couple this with ring fencing of tax losses and a Capital Gains working group looking at the possibilities of Capital Gains Tax on investment properties and there is a fair amount for property owners to digest.

There is also discussion about regulation of the industry thanks to some rogue landlords. Duncan believes regulation is definitely the way forward.

Licensing and regulation will help ensure that those involved in residential letting are following the rules and increasing standards right across the industry.

Duncan believes the list of ‘reforms’ which were all passed into law by the Australian Victorian Government in August 2018 may paint a picture of what is to come:

allowing animals to be kept in rented premises

allowing renters to make prescribed minor modifications to a rental property

bolstering security of tenure and ending ‘no fault’ evictions by removing the ‘no specified reason’ notice to vacate and restricting the use of ‘end of the fixed- term’ notices to vacate to the end of an initial fixed term agreement

establishing a non-compliance register ‘blacklisting’ residential rental providers and agents who fail to meet their obligations

providing for the early release of bonds with the consent of both parties to the tenancy agreement

restricting solicitation of rental bids by residential rental providers and agents

providing for yearly, instead of six- monthly, rent increases

providing for faster reimbursement where renters have paid for urgent repairs

enabling automatic bond repayments, which will be available to a renter within 14 days where the parties are not in dispute over the apportionment of the bond

requiring mandatory pre-contractual disclosure of material facts, such as an intention to sell the rental property, or the known presences of asbestos

prohibiting misleading or deceptive conduct inducing a person into renting a property.

To contact Duncan for a no obligation discussion regarding the management and compliance of your rental property call 021-850933 or email hawkesbay@