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.
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.
