Owner Related FAQ’S
Our goal is to find a replacement tenant within the 3 weeks’ notice period that a tenant would issue OR if there is no tenant at all, then in as little time as possible.
The goal for us here is to ensure that the tenant we select and place into your property meets ALL our criteria before they are given access to the property. We have learnt over many years of experience that this is a critical stage of the tenancy process and if we short cut this process then this can lead to unnecessary challenges during the tenancy.
We can only charge the tenants for water usage provided there is a separate water meter for each tenancy. It is illegal to do so otherwise.
Our company policy is that we commit all tenants to a minimum 12-month fixed term tenancy agreement. We want to know that the tenant is intent on staying in the property which is why we ask for a Fixed Term of 12-months. If they hesitate at this term then we know that they usually have other plans which they have NOT shared with us and are probably only wanting the property short term.
Therefore, asking them to commit to a longer tenancy usually exposes any intention of tenants wanting to rent the property short term and this is the main reason why we don’t use Open Term (periodic tenancies).
Also committing tenants to longer-term tenancies is an assurance of continuity of rent as there is no break in tenancy with a fixed term tenancy.
Our Property Management team knows from the very first day that a tenant has not paid their rent. Our team receives a rent arrears report every morning which highlights to us who has not paid rent and we can then take immediate legal action to recover the rent owed.
After we have issued legal notices, if the tenant has still not resolved the rent arrears, then we will seek termination of the tenancy in Court and can do so after non-compliance of our 14-day legal notice.
Once we have applied to the court, it usually takes approximately 14-21 days for the district court to confirm the termination of tenancy and passing legal possession of the property back to us.
The tenant has the sole legal obligation to pay rent – not Hoverd & Co Property Management. The tenant has a contract to pay rent, not us as Property Managers.
However, we do have solutions for you that will work in your favour where we can arrange to have your rent paid for you (when the tenant does not pay), but you need to be a client of ours for this to happen.
The tenant is responsible for the care of the garden and this obligation is written into our tenancy agreements. However, trees maintenance, hedges and extensive garden work and/or landscaping is the property owners responsibility.
Because we have been managing Auckland properties for almost 20 years and now have huge numbers of properties under our care, we have an extensive database to source comparison properties from to calculate a market rent for your investment property.
Additionally, as a professional Property Management company, we have additional resources available to us that are not readily available to the public which allows us more data from which to form our opinions on rental rates.
It is often suggested in our industry that an investor allocate approximately 1% of the value of the property towards property maintenance each year. However, this can be quite misleading because you have a brand new property then the maintenance in this home will vary considerably with a 40-year-old property.
We have a strict policy regarding the maintenance of our client properties. If there is maintenance that is required, we always discuss this with you first, prior to authorising any expenditure.
We are mindful that this is your money and therefore we all need to be clear on what is being spent and when. Our Management programme that we use (to control all our property maintenance) is excellent in ensuring open lines of communication between yourselves, the tenants and ourselves so that you are always informed at each step of the maintenance job.
Hoverd & Co Property Management use a huge array of forms, templates, and contracts to ensure that your interests are protected. Today, we must operate under continually tighter government restrictions and need to have fully documented processes and procedures to ensure we remain fully compliant and meet all our obligation under the Residential Tenancies Act (RTA). This means that having a Management Authority in place, Tenants Application form, tenancy agreement, Inspection Reports, Insulation Reports, Smoke Alarm certification, Methamphetamine reports and so much more is required to ensure that you as the Landlord meet all your legal obligations under the RTA. If your property is audited by the Ministry of Business, Innovation, and Employment (MBIE) and does not meet the criteria then you risk fines for non-compliance which is why a robust paper trail is required.
Unless the tenant confirms that they have damaged a chattel (for example – broken a light fitting) then it is the property owner responsibility to repair the damaged chattel.
Initially, we will offer our opinion of where we see the rent rate for your property (bearing in mind that every property is different and therefore the rent can be different) and will offer our reasoning as to why we recommend a rent rate. However, it is your property and can, therefore, set the rate at whatever level you wish.
Be careful though, for if you set it too high, then we will not receive any enquiry whatsoever from prospective tenants, as they will see better value properties elsewhere.
The Fencing of Swimming Pools Act needs to be complied with – so ensure you have a compliant pool fence around the pool. There are substantial fines that can be imposed on the property owner if the pool fence is not compliant.
The tenancy law states that it is the owners responsibility to provide a safe and secure home for your tenants. However, there is no legal requirement to fit a burglar alarm.
Hoverd & Co Property Management need to hold two sets of keys to the property. One set to give to the tenant and the other set we retain so that we can complete the routine inspections or access the property in an emergency.
We strongly advise tenants to get their own insurance to cover themselves in an event of a flood, damage, theft etc. Also, if there is damage to the property through an accident, then their insurance will cover the damage via your insurance company. However, building insurance and property chattels / contents insurance is totally your cost.
It is your absolute right to decline pets to the property. In our opinion, we always decline pets for very sound reasons.
1. They can increase the wear and tear on a property – particularly large dogs.
2. If cats urinate in a corner of a room somewhere, the smell is almost impossible to remove. Both costs to rectify these two issues will be your cost as the owner of the property.
Absolutely you can, provided the minimum 48 hour notice period is issued and ideally that you accompany your Property Manager to the inspection. Your Property Manager will liaise with the tenant to arrange a suitable time for the inspection to take place.
You absolutely are able to sell your property whenever you wish. However, IF there is a tenant in place who has a fixed term tenancy, then you will not be able to settle the sale of the property until either the tenant voluntarily vacates OR you wait until the tenant fixed term tenancy expires. The third option is that a buyer buys the property but keeps the tenants in the property in which case you can settle the property purchases whenever you wish.
Tenants must issue 3 weeks’ notice of their intention to leave a tenancy and our goal is that new tenants are selected and approved ready to move into the property as soon as the departing tenants leave the property. In the rare occasion where it takes longer to rent a property due to market forces then you factor in 2 weeks into your budget when calculating your investment returns/yields.
Absolutely YES, these are now mandatory if you are making a property available for rent. The new legislation introduced a little while ago ensures the safety of tenants by legislating this aspect and if not complied with substantial fines can be issued against the property owner.
The owner is responsible for replacing light bulbs but in practical terms the tenants usually replace the bulbs so that they have a degree of comfort during their tenancy.
Once a tenant moves into a property the rent cannot be increased for a period of 180 days. Also, any rent increase needs to be reasonable and if the increase is too high then the tenant may dispute this increase through the tenancy court. Also, if you have a fixed term tenancy and there is no ‘Rent Increase’ clause in the agreement then you will be unable to increase the rent until expiry of the fixed period term.
We will complete an Outgoing Inspection report and then compare the report with the Ingoing report when they started their tenancy and any differences (apart from fair wear & tear items) will be invoiced to the tenant.
The tenant must be given 30-days notice if you wish for the tenancy to end at the expiry of a fixed term tenancy.
If you wish to retain the tenant then we will renegotiate with the tenants for a further fixed term otherwise will convert this to a periodic tenancy where the tenant needs to give 21 days written a notice of their intention to vacate the tenancy.
If you wish to end the tenancy in a periodic then you must give 90-days notice.
Your property needs to meet the new Insulation legislation by 1st July 2019. Many owners are now preparing insulation quotes and having the properties insulated well before the required July date.
If you do not get the property insulated and are unable to provide an Insulation Statement then you are liable for a fine issued by the MBIE
Tenants are liable to pay for the damage they create to the property however, this must be able to be proven to be malicious damage.
If this cannot be proven then the owner’s insurance company will need to step in and assist with the repair of any damage. Often the damage is less than the Insurance excess so the cost will be borne by the owner.
New legislation now requires owners and Property Management companies to provide an Insulation Statement with EVERY new tenancy and we must hold the Statement on file. The Statement is simply a statement on the status of the insulation within the property taking into account the Ceiling, Walls and underfloor insulation.
We MUST hold this Statement on file as of now, and if we do not then we, as your Property Management Partner can be held liable and fined for non-compliance as well the property owner.
In most cases a tenant cannot terminate a Fixed Term tenancy.
If they leave the property during the Fixed Term then they will be liable for ALL rent payable to the end of the Fixed Term period or until a new tenant is placed into the property.
Occasionally there are circumstances that may occur which places the tenant into financial hardship, and by the tenant remaining in the property under these conditions of duress can be grounds for termination of the Fixed Term tenancy.
The tenant simply needs to apply to court and be heard by an adjudicator to explain their case after which the adjudicator in almost every financial hardship case terminate the Fixed Term tenancy.
The property owner is responsible for the clearing/cleaning of gutters.
We absolutely recommend that you complete a test at the commencement AND end of a tenancy so that if there is an increased reading then we absolutely know who is responsible.
We DO NOT recommend completing a test during a tenancy and can explain more should you require more information on this.