A Beautiful Tenancy Agreement

One of the essential first steps of a tenancy is to sign a tenancy agreement with your tenants to make it clear what is expected of them to have a successful outcome for both of you. Most landlords don't put in enough clauses in their tenancy agreement to spell out what is required of the tenants (the DBH standard contract assumes everyone has a working knowledge of the Residential Tenancies Act, but I bet most landlords have never read it, let alone their tenants). Also, many put in clauses that will not be enforceable should the tenancy end up in Tribunal (a classic is 'tenants will commercially clean carpet upon vacating'. This can't be enforced as it isn't 'reasonable' to expect that, so is pointless to have it unless you add the magic words 'if required').

Our tenancy agreements have 34 standard clauses, plus we add more in for special circumstances, such as the tenant having a pet (that takes 3 extra clauses!), if they need a guarantor, or can't pay all the bond or rent on the day they sign the contract. We also discuss all of these clauses with the tenants, we don't just thrust the contract at them and say 'sign here'. As a result of our process we have great success in tenants taking care of the property and leaving it in good order.

If your tenants can't seem to look after the property, it could be your contract is lacking the right clauses to make your (legally compliant) expectations clear. We can help you.

The first rule to avoid "bad tenants" - you can never do too many checks.

Further to Jackie's last blog, I came across another situation recently where the property investor could have been saved time and expense if their Property Manager had spent a few minutes checking the prospective tenants thoroughly. While doing a routine check for a prospective tenant on the Tenancy Tribunal site I noticed an individual had a history of seven Tenancy Tribunal applications made against them over a period of 3 years with total costs awarded being over $7000.00 plus other costs that were not pursued at Tribunal. All the applications were made by Real Estate companies and each of the offences were similar to the last.

You can forgive the first applicant and maybe the second as the first case might not have been published at the time of checking the tenants background, but there is really no excuse for the real estate companies who filed the last few applications. One of which required a bulldozer to remove the rubbish on the property, it was that bad (one wonders why a property inspection didn't pick this up sooner). Amazingly enough a few of the real estate agents were also chasing their letting fees. I would have thought the tenant would have been required to pay this before moving in. Yet another alarm bell ringing that was ignored.

If they had taken the time to do the checks and looked at warning signs they would have realised that this is a tenant nobody should ever rent to. They would have saved the property investor and themselves undue stress and cost.

Check your prospective tenants Tribunal history here

Check your Tenants Carefully

This week we have had two incidences that show how important it is to check tenants backgrounds before you sign on the dotted line.

The first was a tenant we currently have gave notice to vacate (following an 'ugly rent rise'). 'Hooray!' we said at the office, glad to be rid of a grotty tenant who came with the property when we took over management. That's one property we'll be glad to get cleaned up and rented out to a suitable tenant at a much increased weekly rental. However, we had not heard a peep from any prospective landlords asking about their suitability as tenants. Not one. Well, good luck to whoever takes them on, they are about to have their property declared a health hazard.

The second was a prospective tenant who applied to rent a property. They produced a glowing written reference from their landlord who was 'not contactable' having sold the property and moved overseas (yeah right). A little digging by us revealed they had forged the written reference, and had not one, but two, Tenancy Tribunal awards against them for breaching the conditions of tenancy. In my experience landlords rarely take poor performing tenants to Tribunal, so for them to have gone twice in recent history tells me they performed very poorly indeed - how many more times had they caused problems and not been taken to Tribunal? I shudder to think. If they are lying right at the start, you don't want them. If only their past landlords performed background checks. I have no doubt they will find someone silly enough to sign them up to a tenancy based on a bogus written reference.

So, if you don't know how to check a tenants background effectively to save yourself heartbreak and a great deal of work sorting out problems, or you just can't be bothered, call us to do it for you. The money and time we will save you will more than likely pay for the property management fees. And best of all, we guarantee our tenant selection, making your investment property lower risk.

Investing GREEN

We recently moved into a larger office suite to accommodate our growing team.  In renovating the new offices we had choices to make, so we chose green!

Paint for the walls was surplus, additional paint was sourced from a company with good environmental practices.  Wall paper was end-of-line.  Carpet was seconds and direct stuck to the floor to maximise its life expectancy with constant wear from office chairs.  Furniture was recycled to give it new life.  The renovation was light on new resources.

Come in and see our Green offices, and while there have a chat with us about how we can help you tread more lightly with renovations.

Rare as Hens Teeth

Most tenants are good tenants, especially the ones who go through our thorough tenant selection process.  What we are constantly shocked to discover is how few prospective tenants have ever had a credit check carried out on them.  The one thing which is impossible to tell from looking at a person is what they are like with their money.  The best dressed can be the worst spenders.  Past behaviour is a reliable predictor of future behaviour - it takes a lot for people to change their habits.  So, if you are managing your own properties, or you have a property manager, make sure your prospective tenants have a credit check carried out before you accept them as tenants. 

Once they are in your property, it is too late – you cannot legally carry out one once they are a tenant, and you can’t kick them out just because you didn’t do your due diligence on them.  If it is to confirm what you already suspect because the rent doesn’t come in regularly, well, why bother?  You should perform a credit check on every prospective tenant who consents and is likely to be offered a property.  You don’t need to check every applicant.

You can legally discriminate on a person’s ability to pay rent.  If someone has a history of defaulting on loans or credit, it is a fair bet they won’t place a priority on paying you rent.  Don’t take them.  If your property manager does not routinely carry out credit checks on prospective tenants, don’t keep them on.

We have saved our clients expense and heartache by turning down tenants with undesirable credit histories.  Want to know more?  Give us a call and we will tell you all about it. 

Residential Tenancies Act Amendments

The Residential Tenancies Act has been amended and takes effect from Friday 1st October (i.e. today!).  This has some very important consequences for landlords and tenants.  Amongst those changes are these:

• Landlords out of New Zealand for more than 21 days must appoint an agent.
• Fixed term lease renewals must be confirmed 21 days BEFORE the tenancy ends (changed from within 90 days after the lease expires).
• Property managers are now able to charge tenants a letting fee (previously only real estate agents could).  Private landlords still mustn’t charge a letting fee.
• Body Corporate rules must be provided with tenancy agreements, but any changes to those rules which adversely affect the tenancy may result in the tenancy term, or rent, being reduced.
• Boarding houses are now governed by the Act.
• Failure of the landlord to repair or properly maintain the property is an unlawful act.

The law now has more teeth to enforce breaches by tenants, such as interfering with the means to escape a fire, abandoning the property, subletting without consent, overcrowding, failure to quit the property, and threats to other people such as the landlord, agent, or neighbour.  All of these things now attract exemplary damages.


It is vital landlords know what the changes are and how it will affect their tenancies.  If you don’t know, get help from someone who does.