Residential Property Managers Bill

Residential property managers in New Zealand manage approximately 42% of all the residential tenancy market. The Residential Property Managers Bill (the Bill) establishes a regulatory regime that is designed to improve residential property management services throughout New Zealand.

Harcourts are delighted to advise that this Bill has now passed its first reading and has been sent to the Select Committee stage. The Select Committee will be open for submission until 12th October and Harcourts will continue our advocacy on behalf of our network and continue to support the excellent work that the Real Estate Institute of New Zealand has done to get this Bill to the Select Committee stage.

The aim of the Bill is to protect the interests of property owners and tenants, including prospective tenants, through a regulatory regime by:

  • Establishing minimum entry requirements for residential property managers;
  • Ensuring that residential property managers meet professional standards of practice;
  • Providing accountability by establishing an independent, transparent, and effective complaints and disciplinary process, that applies to residential property managers and the delivery of residential property management services.

This regime excludes private landlords, Kainga Ora and registered community housing providers.

The Bill establishes a regulatory regime for the licensing of residential property managers and Residential Property Management Organisations (RPMOs). The Real Estate Authority (REA) will be the regulator for the new regime and key aspects will be:

  • The REA will appoint a Registrar for the register of licensees. The register will allow the public to access key nformation about licensees, to establish the currency and class of a licensee’s licence, and establish whether any recent disciplinary action has been taken;
  • The Registrar will be responsible for issuing residential property manager licences and RPMO licences. RPMOs will be responsible for the provision of residential property management services through the residential property managers they contract or employ;
  • Applicants must meet minimum entry criteria before qualifying for a licence, which include meeting a fit and proper person test, and not being a person prohibited from being icensed under the Bill;
  • The REA will establish a code of professional conduct and prescribe continuing professional development requirements;
  • Complaints of a licensee’s unsatisfactory conduct or misconduct may be referred to a Complaints Assessment Committee or the Real Estate Agents Disciplinary Tribunal for consideration and determination;
  • The REA will have powers to require documents both from licensees and any person the Authority has reasonable grounds to suspect is carrying out residential property management services while unlicensed and not exempt from the Act, in order to effectively enforce the regime;
  • A range of offences and penalties will apply, including measures to discourage the provision of unlicensed residential property management services.

A range of offences and penalties will apply, including measures to discourage the provision of unlicensed residential property management services.

An RPMO licence authorises the licensee to enter into agreements with landlords to provide residential property management services, carry out work to deliver those services through licensed residential property managers, and operate a trust account. It is a condition of the RPMO licence that the licensee employs or engages the holder of a supervisory residential property manager’s licence.

Residential Property Manager Licences

In addition to Residential Property Management Organisation licences (RPMOs), there are 3 classes of residential property manager licences:

  • Supervisory residential property manager licence;
  • Standard residential property manager licence;
  • Provisional residential property manager licence.

Residential property managers with a valid licence can provide professional property management services on behalf of a licensed RPMO. However, provisional property managers need appropriate supervision and management from a residential property manager with a supervisory licence.

The Real Estate Authority (REA) has the authority to establish practice rules that mandate licensed individuals to partake in ongoing education. This includes specifying the frequency and subject matter that will be covered.

Regulations

A short summary of what regulations may be made:
Prescribing—

  • The qualifications and experience necessary to be entitled to different licences and different classes of licence under this Act; and
  • Rules about whether and what qualifications and experience obtained overseas can be taken into account in assessing whether the applicant has the necessary qualifications and experience;
  • Requiring RPMOs to have insurance of a specified kind and to a specified level of cover;
  • Requiring RPMOs to establish and use trust accounts in the prescribed manner;
  • Prescribing records that must be kept by RPMOs;
  • Providing for the appointment of auditors and for auditing
  • equirements, including the power of inspection of trust accounts and other documents or records that are necessary or desirable for carrying out an audit;
  • Set different qualifications for holding an RPMO licence, and the different classes of a residential property manager licence;
  • Set different levels of experience within a specified range of industries for holding the different classes of a residential property manager licence;
  • Set different qualifications that meet the standard for granting the same class of licence;
  • Provide for an increase in the prescribed level of qualifications and the length of required experience for the same kind of licence or the same class of licence over time.

Tribunal may make orders requiring use of a licensed residential property manager

Another interesting amendment being made to the Residential Tenancies Act 1986 is that the Tribunal may make orders requiring a landlord to use a licensed residential property manager if the Tribunal is satisfied that a landlord has committed an unlawful act under any of the following provisions:

  • Section 45(1A) or 66I(4) (landlord’s responsibilities: cleanliness, maintenance, smoke alarms, healthy homes standards, and buildings, health, and safety requirements);
  • Section 45(1AB) or 66I(5) (landlord’s responsibilities: contaminated premises);
  • Section 54(3) (retaliatory notice of termination);
  • Section 60AA (acting to terminate without grounds);
  • Section 137(2) (contracting to contravene or evade the provisions of this Act); and

A landlord must have committed an unlawful act on at least two separate occasions (being unlawful acts established within a period of five years in two or more cases before the Tribunal or the District Court); and each of the unlawful acts is of a kind referred to above.

Harcourts eagerly anticipates the regulation of the residential property management industry.

A  link to the Residential Property Managers Bill is here:
https://legislation.govt.nz/bill/government/2023/0280/latest/whole.html

Homes by Holmwood

Welcome to the inaugural issue of Homes by Holmwood.

Regular readers of the Bluebook might notice something quite different, while the Bluebook came to an end in December, at Harcourts Holmwood we know the power of print is still undeniably strong. We are incredibly proud to bring this local magazine to showcase the property collection our team of agents are presenting to the market – a first for a Harcourts franchise and we believe an integral part of what makes Holmwood a market-leader in property marketing.

With Winter getting closer the catalysts for change remain the same, like, job transfers, school transitions and lifestyle upgrades or downsizing – real estate will always happen no matter what other factors are at play. The topic of real estate and property prices remains strong, but despite the news headlines and various market data, perspective is important. The figures we see represent that prices are correcting after a period of record growth. A downturn after those highs we saw up until early 2022 is not an accurate benchmark for 2023. No matter what the headlines say, a well-presented property and strategic marketing campaign will always attract buyers.

For everyone here at Holmwood, real estate is as much about people as it is property. We never forget that people are at the heart of every sale, that’s why if you are in the market to buy or sell you want Harcourts Holmwood by your side.

Lastly, and most importantly, thank you for picking up our magazine, we sincerely hope you enjoy browsing through our property collection as much as we have enjoyed putting it together.

Tony Jenkins
CEO Harcourts Holmwood

Property Management Focus – February

A national state of emergency

New Zealanders have experienced a start to the year like no other in history. With the floods affecting Auckland and Northland in late January and Cyclone Gabrielle sweeping through the North Island in mid-February, a national state of emergency was declared, and a formal request made for aid from Australia.

Both weather events have caused the loss of life, of livestock and farms, and affected properties including many managed by Harcourts property managers, causing distress and anguish to our country.

Our property managers have worked tirelessly to address the damage caused by these natural disasters and work on the clean-up and rebuild will continue for some months yet.

The strength of our network shines at times like this with teams from all across the country reaching out to their colleagues who are most affected, offering assistance with lessons from past events.

Thank you to our landlords for your patience and understanding during these extraordinary times and to our dedicated property managers and business owners who have worked around the clock to provide safe housing to tenants and address the repairs and maintenance caused by these extreme weather events.

Our biggest thank you however goes to the emergency services and the brave men and women who go out on a daily basis to ensure the safety of others.

Using licensed practitioners for your property

Using licensed builders, electrical workers, plumbers, gasfitters and drainlayers ensures work on your property is completed safely and meets the relevant standards.

Using licensed practitioners

It’s important when carrying out maintenance or renovations to use licensed practitioners, where required. Hiring licensed builders, electricians, plumbers, gasfitters and drainlayers helps make sure the work is done correctly, adheres to safety standards, and meets legal requirements.

Using unlicensed tradespersons may affect your insurance and could end up costing you more money if the work needs fixing later. It could also mean you are in breach of your legal obligations.

Checking a practitioner is licensed

When engaging licensed practitioners, an easy way to confirm they are qualified and competent to perform the work, is to see their professional ID card. That way you’ll know they are qualified and competent to perform the work, and that it will meet the relevant trade standards.

Licensed building practitioners

If you’re planning building work on your property, the required work will need to be assessed. A Licensed Building Practitioner (LBP) will determine if the work required is Restricted Building Work (RBW) or not.

This means work that is critical to making a home structurally sound and weathertight. If the work is RBW, it needs to be designed by a Licensed Building Practitioner and the work also needs to be supervised or completed by an LBP to meet legal requirements.

Electrical workers

Landlords are prohibited from doing any fixed wiring work including fitting of power points on properties that they are renting out. It’s important to use a licensed electrician for safety and to meet legal requirements.

Plumbers, gasfitters and drainlayers

In New Zealand, sanitary plumbing, gas fitting and drain laying work is restricted and can only be carried out by tradespeople who are registered and licensed to do so. Engaging unlicensed practitioners can void your insurance, compromise home safety, and increase the likelihood of leaks and costs from ongoing issues.

Harcourts property managers work with licensed and skilled tradespeople and can manage any required repairs at your rental property. We understand the importance of strong relationships with trusted tradespeople which deliver results for our clients with quality workmanship and competitive pricing.

Source: https://www.tenancy.govt.nz/maintenance-and-inspections/regular-maintenance/using-licensed-practitioners-for-your-property/

Depreciating chattels in rental properties

Often when tenants cause damage to chattels at a rental property or if something goes missing, it is expected that the tenant will pay for the replacement of the item. While this seems reasonable, this is not entirely accurate, and the fact is that a tenant will only be liable for the depreciated value of the chattel.

Using the example below, the most appropriate method for calculating a depreciable amount for a claim for a household chattel, is by establishing the age of the item and the estimated useful life of the item.

Scenario

At the end of a tenancy, the landlord applied to the Tenancy Tribunal for the cost to replace the living room and bedroom curtains, which were missing at the end of the tenancy. The landlord claimed a depreciated sum of $479.00, reasoning that the amount to purchase new curtains was $576.00. The tenant accepted liability for the missing curtains but disputed the claim of $479.00 stating that the curtains were older than six years and were not in good condition when the tenancy commenced in January 2017. The tenant provided photographic evidence in support of their claim.

After taking into consideration betterment and depreciation, the Tribunal awarded just $40.00 to compensate the landlord for the missing curtains. So, how did the Tribunal arrive at this figure?

To calculate the sum to be deducted from the cost to replace items such as curtains, betterment or depreciation must be considered. This requires taking into account the age and condition of the curtains at the start of the tenancy and their likely useful lifespan. In this case, the Tribunal held that curtains were expected to last for 8 years before requiring replacement.

Considering the estimated useful life of only 8 years and the tenant’s evidence that the curtains were over 6 years old and not new at beginning of tenancy, the Tribunal held that the sum of $40.00 would be reasonable to compensate the landlord for the missing curtains. The IRD’s website provides the estimated useful life of chattels in a residential property.

Landlords and Property Managers should retain copies of receipts when purchasing chattels so that there is a record of when the item/s are purchased. The condition of the chattel should be documented on the ingoing condition report, including photographs at the commencement of a tenancy.

Property Management Focus – November

Merry Christmas from Harcourts

To our valued landlords, Harcourts wish you a safe and peaceful festive season.

In warm appreciation of your support during the past year, we extend our very best wishes to you and your loved ones. Merry Christmas!

Alternative Accommodation for Tenants?

There is a misconception that when a property is damaged, either due to a natural disaster or flood or fire, or another event, and a property cannot be lived in, either for a short period or an extended period, that the landlord is responsible for providing alternate accommodation for the tenant. This is not the case.

If a property is uninhabitable, the landlord is not responsible for finding alternative accommodation for the tenant, however they would be encouraged to assist if they are able. What a landlord can do, is often determined by their insurance policy coverage.

Many landlord insurance policies will provide alternative accommodation for tenants, so it pays to check and if the cost is
covered, then it is recommended to provide the tenant with alternative accommodation.

Different insurance companies have different policies, with different limits they will pay and conditions that must be met. Some insurers provide a ‘Landlord Policy’, and others will have a home policy with a landlord’s optional extras or extensions that are often tailored to a client’s needs.

First and foremost, we encourage property owners to check if they have landlords’ insurance cover in their homeowners or business policy.

☑ Check if landlords’ insurance cover is included

If not, why not? At a small additional cost homeowners can add landlords cover to their policy. If clients are unsure, we recommend that clients contact their insurer or insurance broker to enquire for more information.

☑ Contact Insurer or Insurance Broker for further enquiries

Ensure that there is a current residential tenancy agreement in place between policy holders and their tenants.

☑ Current residential tenancy agreement in place (in writing)

What are landlords covered for and why do I need it?

A landlord’s cover is similar to a house policy in several ways, it was designed to ease the financial burden of loss or damage arising from the additional risks when renting out a property.

Some key risks included under landlord policy coverage are:

  • Intentional acts, vandalism, or theft by tenants.
  • Loss of rent when tenants need to move out due to damages clients need to claim on, or if a tenant abandons the property, or if the landlord need to evict a tenant.
  • Contamination of your home caused by tenants using or manufacturing methamphetamine.
  • Landlord contents and furnishings damaged by tenants

What if tenants need to be relocated?

In the event that a tenanted property suffers physical damage, and the property is ‘uninhabitable’, meaning the home:

  • is no longer a safe or sanitary place for anyone to occupy; or
  • prevented access to the home by order or direction of government or local authorities; or
  • it no longer has a functional bathroom or kitchen; or
  • has been determined by government, local authorities, or insurer to be uninhabitable due to physical damage to the home or possible future physical damage to the home.

Then, depending on the insurance policy, a landlord may be covered for the cost of providing alternative accommodation for the tenant. There is generally a time limit placed on the length of insured cover (usually until the premises is repaired or up to 12 months, whichever is the lesser).

What if there is no alternative accommodation coverage?

If a landlord’s insurance policy does not cover the cost for alternative accommodation, however, the tenant can relocate themselves and return once the repairs are completed, then the rental payments by the tenants will be temporarily suspended from the date the tenant cannot reside at the property and resumes again when they return back to the property, therefore the landlord isn’t liable for the accommodation costs for the tenant.

If the property is uninhabitable indefinitely or for an extended period of time, then the landlord must give the tenant at least 7 days’ notice to terminate the tenancy, and the tenant can give 2 days’ notice. The rental payments will cease from the date that the property becomes uninhabitable.

If the tenant can continue living at the property, however they cannot access certain areas, then the rental payments should partially abate for that period, reflecting what areas of the premises they are unable to utilise.

Each case will be different, and so will the needs of the tenant. In every case, communication is key so that everyone understands what they are required to do, which is often determined by what the insurer is required to cover. The first place to start in the case of an event, is to speak with the Insurer and be guided by their expertise, and then establish, and where possible, meet the needs of the tenant.

If landlords would like more clarity on their insurance coverage, it is recommended that they contact their insurer or insurance broker for advice.

Unlawful Dwellings

78A Orders of Tribunal relating to unlawful residential premises

(1) This section applies in any matter where the Tribunal, on application by a party or otherwise on the evidence before the Tribunal in respect of any claim within its jurisdiction, determines or declares that the premises are, or were at any material time, unlawful residential premises.
(2) For the purposes of this Act, unlawful residential premises means residential premises that are used for occupation for a person as a place of residence but—
(a) that cannot lawfully be occupied for residential purposes by that person (whether generally or whether for the particular residential purposes for which that person is granted occupation); and
(b) where the landlord’s failure to comply with the landlord’s obligations under section 36 or 45(1)(c), or section 66H(2)(c) or 66I(1)(c), as relevant, has caused the occupation by that person to be unlawful or has contributed to that unlawful occupation.

Different types of unlawful dwellings

Section 78A of the Residential Tenancies Act 1986 (RTA) does not provide examples of what constitutes an unlawful dwelling. However, since these provisions became law as part the RTA 2019 Amendments, there have been many examples of the Tribunal making orders under Section 78A.

Below are eight descriptions of unlawful dwellings:

  1. A premises that has never had resource nor building consent
  2. Minor dwelling that never had resource consent
  3. Minor dwelling that is not consented for sleeping
  4. Minor dwelling that does not have CCC or COA
  5. A rental property that does not comply with the Building Act 2004
  6. A sleepout that has kitchen facilities
  7. A premises that does not comply with the 1947 Housing Improvement Regulations
  8. A premise that does not comply with the Building Code

A premises that has never had resource nor building consent

One example of an unlawful dwelling is where a premises has never had a building consent nor a resource consent. In a recent tribunal case, a tenant made a claim against a landlord who rented out a property where all three residences use one letterbox and shared the same rubbish and recycling bin. The tenancy did not have a separate water meter or power meter although it was agreed that the rent would include these outgoings. The tenancy had just one room, containing a lounge and a kitchen. The kitchen had just a sink, a bench, and a portable gas cooker.

Between that ‘living area’ and the bedroom was a glass sliding door. In the bedroom there was a handbasin, shower and toilet but these facilities were only blocked off by a curtain.

The tenant, who was concerned about a sewage smell, made enquires with the Auckland City Council and accessed the property file. The property file contained no mention of the premises that the tenant lived in whatsoever, and the Tenancy Tribunal deemed the premises unlawful.

The landlord, unsuccessfully attempted to claim $1000 in rent arrears because under Section 78A the Tribunal must not order the tenant to pay any rent arrears if the premises is unlawful.

The discretion of Tenancy Tribunal crucial in unlawful dwelling orders

Where appropriate, the Tribunal can order the tenant to not pay the landlord:
• Any money owing in rent arrears
• And any other sum of damages or compensation

What orders can be made under Section 78A?

The Tribunal may also order a landlord who rents out an unlawful dwelling:

  • A full rent refund, if the Tribunal is a satisfied the rental property was never consented as a residential premises.
  • A partial rent refund if part of the rental property is lacking the necessary consent.
  • A work order to remove or rectify any impediment that makes the premises unlawful
  • A work order to comply with all requirements in respect of buildings, health, and safety under any enactment
  • And exemplary damages of up to $7,200 if the landlord fails to comply with Section 45 (1) (c)

As a final note, even if the tenant does not make an application, the Tenancy Tribunal may make any of the above orders at its own initiative.

The wide range or orders available to the Tenancy Tribunal highlights how seriously the government views unlawful dwellings. Landlords will be held accountable for renting out properties which are either unconsented, non-compliant or expose tenants to health and safety risks. However, an important point to note is that the Tenancy Tribunal can use its discretion under Section 78A.

Unit Titles law changes

Commencement dates for changes to the Unit Titles Act have now been announced.

The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 (the Amendment Act) became law on 9 May 2022. The purpose of the Amendment Act is to provide greater protections for unit owners or prospective buyers.

The changes to the Unit Titles Act will come into force across three key dates:

  • Provisions to support remote attendance at meetings will take effect on 9 December 2022.
  • Most of the provisions will come into force on 9 May 2023.
  • Provisions that require further regulatory development or preparation by the sector will take effect on 9 May 2024.

Gumboot Friday

Over the past few months, alongside hundreds of thousands of kiwis the Harcourts network have pulled together in the most extraordinary way to raise funds and awareness for Gumboot Friday.

In our biggest network collaboration to date, there were sausage sizzles, auction nights, gumboot throwing and other fun activities across New Zealand. The original goal was to raise $138,000 enough to fund 1000 counselling sessions at $138 each but we are delighted to say that Harcourts have smashed this goal and raised $167,652.45 which will pay for 1215 counselling sessions. Bryan Thomson, Managing Director Harcourts New Zealand said ‘The mental health of young kiwis is something we need to address and look after. Harcourts Foundation are incredibly proud to support Gumboot Friday.’

Rental reform package: Regulation, Healthy Homes extension, Methamphetamine levels

22 November 2022

The Government will regulate property managers, consult on an acceptable maximum level of meth residue, and the deadline for Healthy Homes standards has been extended as part of a new package of rental reform.

Regulation

Regulation of property managers is welcomed by Harcourts and as consultation has already happened on the proposals, it’s expected a Bill will be introduced into the House by May 2023. We have previously advised what will be required of property managers when regulation is in place and will update our landlords when the Bill is introduced.

Harcourts offices are already ahead of the game, with many of the proposals already in place in our offices.

Methamphetamine

The Government has also announced it will consult the public on what an acceptable maximum level of methamphetamine residue is for properties as well as at what level those houses need to be decontaminated to, and when tenancies would need to be terminated.

In the proposals, a maximum acceptable level of surface methamphetamine residue is proposed to be set at 15 micrograms per 100 square centimetres, up from the NZ standard of 1.5 micrograms per 100 square centimetres. This would also be the level which a property would need to be decontaminated back to, or below. This is consistent with the findings of Sir Peter’s report and advice from ESR.

Once relevant regulations are in place, landlords must not knowingly rent out premises that are contaminated above the prescribed levels, without decontaminating the premises. To do so is a breach of the Residential Tenancies Act and Landlords will be liable for a financial penalty of up to $4,000.

Harcourts welcomes the certainty on what level of methamphetamine residue requires decontamination.

Healthy homes standards

The Government is extending the deadlines for landlords and Kāinga Ora to comply with the Healthy Homes Standards.

Private landlords will have one more year to comply, making the final compliance date for all private rentals being 1 July 2025, instead of 1 July 2024.

Kāinga Ora and Community Housing Providers will also have an additional year to comply, shifting from 1 July 2023 to 1 July 2024.

From July 2021, landlords who had new or renewed tenancies were required to make sure the rentals met the standards within 90 days. This is now being extended to 120 days.

This applies to private rentals that were not required to comply before 26 November 2022. This means if the tenancy started or renewed on or after 28 August 2022, the landlord now has 120 days to comply with the healthy homes standards.

The deadline extension was deemed necessary due to COVID-19 causing supply chain and delivery disruptions as well as limited workforce challenges.

Harcourts encourages all landlords to meet the healthy homes standards as soon as possible to retain the best tenants at the best possible rental returns.

Section 40 Tenant’s responsibilities

As a continuation of the October edition of the Property Management Focus
newsletter, below are the tenant responsibilities under the Residential Tenancies Act 1986.

Section 40 Tenant’s responsibilities

(1) The tenant shall—
(a) pay the rent as and when it is due and payable under the tenancy agreement; and
(b) ensure that the premises are occupied principally for residential purposes; and
(c) keep the premises reasonably clean and reasonably tidy; and
(ca) comply with all requirements in respect of smoke alarms imposed on the tenant by regulations made under section 138A; and
(d) notify the landlord, as soon as possible after discovery, of any damage to the premises, or of the need for any repairs; and
(e) on the termination of the tenancy,—
(i) quit the premises; and
(ii) remove all his or her goods from the premises; and
(iii) leave the premises in a reasonably clean and reasonably tidy condition, and remove or arrange for the removal from the premises of all rubbish; and
(iv) return to the landlord all keys, and security or pass cards or other such devices, provided by the landlord for the use of the tenant; and
(v) leave in or at the premises all other chattels provided by the landlord for the use of the tenant.
(2) The tenant shall not—
(a) intentionally or carelessly damage, or permit any other person to damage, the premises; or
(ab) cause or permit any interference with, or render inoperative, any means of escape from fire within the meaning of the Building Act 2004; or
(b) use the premises, or permit the premises to be used, for any unlawful purpose; or
(c) cause or permit any interference with the reasonable peace, comfort, or privacy of any of the landlord’s other tenants in the use of the premises occupied by those other tenants, or with the reasonable peace, comfort, or privacy of any other person residing in the neighbourhood.
(3) Where the tenancy agreement specifies a maximum number of persons that may ordinarily reside in the premises during the tenancy, the tenant shall ensure that no more than that number ordinarily reside in the premises at any time during the tenancy.

Note that a breach of some of the responsibilities above are considered unlawful acts and exemplary damages, payable to the landlord, can be awarded by the Tenancy Tribunal. For example, interfering with smoke alarms is an Unlawful Act and the maximum exemplary damages that can be awarded against the tenant is $4,000.

 

 

 

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Property Management Focus – June

Tips for Dealing with Rising Mortgage Rates

Rising interest rates are bad news for first home buyers and borrowers alike, with new homeowners and investors (those who bought homes in the last 18 months) facing much higher mortgage repayments for the first time. With the Reserve Bank of New Zealand signalling further interest rate hikes are on the horizon, how can we avoid placing strain on already tight budgets and stay on top of bigger mortgage repayments?

Here are some options:

1. Check what mortgage you are currently on

The first step is to determine how your current mortgage is structured, as interest rate increases will affect the floating portion of your home loan, as well as any fixed interest rate terms that are ending that are going to be refixed.

If you’re not sure how your home loan is structured, contact your lender or mortgage adviser to help you work through the details. It’s worth booking in a home loan restructure checkin with a Mortgage Express branded adviser, to ensure you’re getting the best deal available to you, and that your home loan is structured to fit your requirements.

2. Determine how interest rate increases impact you

Now that you know how your home loan is structured, your mortgage adviser can help you determine the impact any interest rate rises will have on your home loan repayments. You can also use a home loan repayment calculator – like this one – to work out what your repayments are going to look like.

If your fixed rate term is nearing the end, now is a good time to discuss with your mortgage adviser locking in an interest rate. It’s also worthwhile comparing how your interest rates stack up against any other deals in the market, and this is something else your mortgage adviser can help you with.

3. Devise a plan to help you manage higher repayments

The Reserve Bank (RBNZ) has warned that a noticeable number of households that borrowed for the first time in 2021 will find it difficult to pay their mortgages and cover all their other usual expenses. If you’re in this situation, start building up a savings buffer now to help you manage the higher repayments you are going to face in the year ahead.

Take a close look at your budget to identify the expenses you can cut out or ways in which you can boost your income. Check that you’re getting the best deal for utilities – power, internet and phone – and pay down any high interest debt as soon as you can to help free up extra cash to divert into your home loan.

Get expert advice about your financial situation

With more interest rate hikes predicted, it’s important to have a financial plan in place to help you cope with higher mortgage repayments. As well finding ways to cut back on unnecessary spending, building up a savings buffer could help you prepare for higher costs ahead.

If you’re concerned about the impact higher mortgage repayments could have on your financial situation, it’s best to seek help immediately. Contact your mortgage adviser or lender to discuss your situation before you miss any repayments.

Contact a Mortgage Express branded adviser if you have questions about your existing home loan and the impact higher interest rates could have on your financial situation.

Source: https://www.mortgage-express.co.nz/blog/rising-mortgage-rates

 

Limiting Interest Deductibility

New interest limitation rules  have been introduced which has either phased out or is slowly phasing out the ability to allow interest paid on loans as a deductible expenditure when the loan was for a residential rental property.

For residential property acquired on or after 27 March 2021, interest is denied as an expense from 1 October 2021, unless an exclusion or exemption applies.

For property acquired before 27 March 2021, the ability to deduct interest on existing loans is being phased out over 4 years, ending 31 March 2025.

Interest on new loans drawn down on or after 27 March 2021 will not be deductible.

Exemptions and exclusions

The proposed new interest limitation rules will apply to properties that are suitable to be used for long-term residential accommodation.

Some types of residential accommodation will be excluded from the rules. These are generally properties unsuitable for use as long-term accommodation or for first home buyers.

New build exemption

The exemption will apply to the initial owners and any subsequent owners for 20 years from the date of the CCC. A new build is a self-contained residence that is added to land, with a CCC issued on or after 27 March 2020.

Phasing out interest deductions
Income year Interest you can claim
1 April 2020 – 31 March 2021 100%
1 April 2021 – 30 September 2021 100%
1 October 2021 – 31 March 2022 75%
1 April 2022 – 31 March 2023 75%
1 April 2023 – 31 March 2024 50%
1 April 2024 – 31 March 2025 25%
1 April 2025 onwards 0%

 

Damage Because of Weather Events

Wild weather can cause damage at your rental property. Find out what to do if your rental needs repairs after extreme weather or a natural disaster.

Landlords are responsible for maintaining the property in a reasonable condition. This includes fixing any damage caused by severe weather or a natural disaster.

If the rental is damaged by flooding, the landlord is responsible for drying the property if it has water damage and paying for costs to repair the damage. This might also include paying the tenants for electricity charges to run a fan, dehumidifier, or heater to dry the property.

For Landlords (and property managers):

  • Contact the tenants to check everyone is safe and discuss any damage.
  • Discuss with the tenant what safe and practical measures could be done to prevent any further damage, or to secure the property until the repairs can be done.
  • Ask a professional when they can make the repairs and if it’s safe for the tenants to stay in the property while it’s being fixed. Let the tenants know how long the repairs are expected to take, and make sure you give the correct notice to enter the property.
  • Have a good knowledge of your insurance policy and what it covers. Talk to your insurance company about making claims.

For Tenants:

Tenants should speak to their landlord as soon as they can to let them know about any damage or need for repairs. If they don’t tell their landlord about damage within a reasonable time, they may be liable.

  • If it’s safe and practical to do, there may be things they can do to help prevent further damage. For example, covering a broken window to keep rain out of the house until repairs can be done.
  • If a tenant has tried talking to their landlord about the damage and they don’t do the necessary repairs, they can send their landlord a notice to remedy. This notice tells the landlord what they believe they have done to breach their obligations under the Residential Tenancies Act 1986, what the tenant would like them to do to fix it, and a reasonable timeframe for them to do it (normally a minimum of 14 days).

Australasian Auctioneering Championship

NSW auctioneer Clarence White finished runner-up to Queenslander Justin Nickerson in the Australasian Auctioneering Championship, after a valiant effort in the finals.

Justin won the title for the second year in a row, and Real Estate Institute of Australia (REIA) President Malcolm Gunning said it is the third time in the history of the event an auctioneer has gone back to back.

“Justin was announced as the title holder at a gala dinner at the Museum of South Australia last night after a tight contest between five outstanding auctioneers,” Mr Gunning said.

The other finalists were Mark McGoldrick, NZ, Ned Allison, NZ, and Bronte Manuel, SA.

“The finalists exemplify the young professional auctioneer of today. Justin and Clarence were very clean, slick and professional. They are moving the whole industry to another level,” Mr Gunning said.

The Australasian Auctioneering Championships, this year hosted by the Real Estate Institute of South Australia (REISA), test an auctioneer’s skill and ability to command a crowd, manage any issues at the auction and call complex bidding offers.

“Judges decided on a winner after the five finalists were briefed and auctioned a prestigious historic Adelaide home to mock-sell under the hammer. The bidding was fast and furious and the competition was exciting and highly entertaining,” Mr Gunning said.

Real Estate Institute of Queensland CEO Antonia Mercorella congratulated Mr Nickerson on his historic win.

“Justin has worked so hard for this win and it’s a testament to his attention to detail, to his determination and to his amazing skill,” she said.

“He started planning for this day the very next day after last year’s Australasian win. He’s fast becoming a once-in-a-generation auctioneer,” she said.

Open to the public, the annual Australasian Auctioneering Championships staged 23 auctions over two days. The quality was truly exceptional with participants creating momentum in the bidding, while building rapport with the crowd.

The Australasian Real Estate Institutes’ Auctioneering Championships provide a significant opportunity for REIA and the Real Estate Institute of New Zealand (REINZ) to show off their very best Auctioneers.

“The standard of the competition is always very high and the Real Estate Institute of New Zealand play host to the Championships in 2018,” concluded Mr Gunning.

Pictured from left to right, back to front is: Bronte Manuel, Ned Allison, Mark McGoldrick, Justin Nickerson and Clarence White.