Landlords out of pocket but things set to improve

Landlords out of pocket but things set to improve

Landlords around New Zealand are losing thousands of dollars in tenancy debt but new statistics illustrate that the losses aren’t as significant as they were four years ago and things are only going to get better.

Nationwide figures, released by tenancy debt specialists Tenancy Practice Services, show that landlords lose on average nearly $1800 in tenancy disputes or in other words five weeks of rent.

This is a slight improvement from a Property Investors Federation survey in July 2012 that showed members on average lose $2042 in tenancy disputes, over and above any bond they received.

And with a landmark change happening to the Residential Tenancies Act (RTA) in July 2016, losses are set to decrease even further.

"Things have changed with MBIE (Ministry of Business, Innovation and Employment), there is no doubt about that," Tenants Protection Association manager Helen Gatonyi told Tenancy Practice Services.

"I think sometimes there is a delay in the processing of a (tribunal) application and that is being addressed in the amendments to the RTA in terms of the 10-day abandonment so that is really a good step."

The new 10-day process enables landlords to 're-tenant' abandoned rental properties, which is expected to take up to four weeks.

The current process can take up to six weeks, and often leaves landlords significantly out of pocket.

In a sample of over 10,000 tenancy debts, Tenancy Practice Services discovered that the national level of rental debt had dropped to just over five weeks of rent loss.

Northland and West Coast landlords are the most of pocket (with just over six weeks of rental debt lost) while Waikato landlords were the best off in New Zealand with just over four weeks of lost rent.

Auckland landlords are on average losing 5.6 weeks of rent, Wellington landlords 5.89 weeks and Canterbury landlords just 4.86 weeks.

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