Rotorua Property Investors' Association

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Leap in Tenancy Tribunal applications

Increasing financial pressures have seen a spike in the number of applications to the Tenancy Tribunal, mainly relating to unpaid rent.

The biggest increases have been in the larger cities, particularly Auckland and Christchurch, says Jeff Montgomery of the Department of Building and Housing.

Between July and October 2008, numbers of applications rose to 17,020, an increase of 2,119 over the same period last year.

Montgomery says normally the busiest time for applications is around January and February, when there are fewer working days to resolve problems and the system “clogs up”.

“A lot of people move in and out of properties in this period and they often get themselves into financial strife over the holiday season.”

He explains the reason for the early increase is not just because tenants can’t afford to pay their rent, but also landlords are under pressure and have become more aware.

“As soon as rents are missing, landlords are noticing and taking action, whereas in the past they might have waited. Landlords are under pressure as well with interest rates and things. They’re not as tolerant as they were.”

In today’s market, he says, the key thing for landlords and tenants is having a good relationship. He advises landlords to keep in very regular contact with tenants so they feel they can let you know if something has gone wrong.

Martin Evans, president of the NZ Property Investors Federation, advises that this could just be the beginning of a difficult situation and that leniency is the best policy.

“Landlords need to realise a lot of people are in difficulty. If landlords can show leniency it may help. Keep the discussion going, but at the same time keep in control with mediation. If things get worse, you’ve started the process. So, a lot of leniency, rather than coming down hard might work.”

To keep on top of things, he says:

  • be vigilant about your tenant selection
  • communicate with tenants as soon as a rent payment is missed
  • if the tenant can’t pay, be lenient and suggest they pay just some of the rent.

Other options Evans suggests is advising tenants to seek help from the Tenants Protection Association or the Citizens Advice Bureau.

“Remember although owners are losing rent, the tenant is losing their home. You may have to work together. Help customers if you can. We’re all in this together this time.”

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