Feedback

When does a tenancy become a tenancy?

On a daily basis interesting scenarios arise in property management. There are always new challenges and  situations facing us. Recently one of our Auckland offices needed to seek advice from Scotney Williams, a lawyer and a tenancy expert about the situation outlined below:

 

For a number of years they had managed a property in Pt England. Recently a tenant gave notice and they prepared to select a replacement. The owner was informed, advertising commenced and a suitable tenant was found, they rang the owner to gain her approval to ensure she approved of the rental, the terms and conditions.

 

Unexpectedly, the landlady had been offered an employment opportunity in Auckland and wished to move into her property. No documents had been signed and no money had been handed over. The tenant contacted the agency telling us that they had sought advice from Tenancy Services and were informed that there was an agreement in place as there was a verbal agreement which was binding. The agency sought their own counsel and received the following legal opinion:

 

1. Oral agreements are binding and are usually constructed against landlords. S 13C RTA.

 

2. In your case you have made oral agreements with each and they have relied upon those agreements and doubtless would back each other up in the Tenancy Tribunal.

 

3. You made agreements with each of the tenants before the owner specifically cautioned you against re-renting.

 

4. When you made the agreements as agent/manager your agreements bound your principal.

 

5. First in time is first in law.

 

6. If occupation is not granted on the time agreed then you as landlord are in breach of S 36, 37 & 38 RTA.

 

7. You acted reasonably in progressing the renting based on the antecedent conduct of the owner. You had made agreements with each tenant before the owner alerted you to her retaking possession.

 

8. The owner’s only recourse is to apply to the Tenancy Tribunal for relief under S 66 which will involve them proving an unforeseen event plus balance of hardship.

 

What would have happened had the matter gone to the Tenancy Tribunal? The situation was averted and the agency paid the letting fee for the tenant on another suitable property. This was preferable to taking the matter to court and risking an unpalatable outcome.

 

However, one does question what the outcome would have been had the roles in the matter been reversed. Many a Saturday we have sat in the office, references and credit checks completed waiting for a sign-up, following a verbal agreement only to be “stood up” as the prospective tenants have changed their minds or found alternative accommodation.

 

Life is always interesting in the world of property management!

 

Tenancy Tribunal

What happens when a property is not reasonably clean?

· Section 40(1)(e)(iii) - Tenant required to leave premises in reasonable condition—no requirement on landlord to chase tenant.

 

The landlord brought a claim for compensation against his ex-tenant. One of the claims, for cleaning costs, was defended by the tenant, who stated that if he had known about the need for cleaning after the tenancy ended, then he would have attended to it. In 1996, the Tribunal noted that the legislation required tenants to leave the premises in a reasonable condition, and that “there is no requirement for the landlord to go chasing after the tenant if this is not done”.

 

· Section 2—Landlord/Agent: Agent managed tenancy for duration of tenancy and finalised tenancy issues at conclusion of tenancy.

 

Landlord brought further claims. Landlord includes an agent of the landlord. Agent had concluded matters relating to tenancy—not open for landlord to seek further compensation.

 

A 2009 case showed, once again, that a landlord’s property manager acts on his or her behalf. The tenancy concluded, the property manager checked the premises and refunded a portion of the bond to the tenant and kept the rest to cover damages.  However, the landlord wasn’t happy with the property management and applied to the Tribunal for further compensation.

 

The Tribunal held that the property manager had been acting at all material times as an agent for the landlord, that the agent had concluded matters arising from the tenancy with the tenant at the end of the tenancy, and that it was not open to the landlord to bring further claims. The landlord was responsible for the actions of his agent.

 

Better, faster, smarter services

At our Property Management conference a spokesperson for the Department of Building and Housing shared recent news about their organisation. The Department has recently introduced a number of improvements to the way they provide residential tenancy services. You may have noticed some of the following changes:

 

 · A single nationwide contact phone number 0800 TENANCY, so tenancy queries and requests get to the right place first time.

· New quality assurance checks, so applications for dispute resolution are processed correctly the first time.

 

· Scheduling of applications by a single case coordination team for increased efficiency and consistency.

 

· A best fit dispute resolution approach, so applications can be resolved faster.

 

· Automated email and text reminders for mediation appointments to encourage attendance at the right time and place.

 

· Introduction of national phone mediation, so their mediators are available no matter where you are in the country.

 

· Recording a sample of phone mediations for quality assurance and training purposes.

 

Quality Tenancy Tribunal Applications

 

You can help Tenancy Tribunal when you fill out an application form by taking the time to make sure all the details are entered clearly and correctly and you include all supporting information (for example, a rent summary showing rent arrears being claimed). If you do this your application will not be delayed or withdrawn.

 

If Tenancy Tribunal check your applications and ask you to supply further details you have five working days to do so or your application may be withdrawn. Taking a bit of extra time to check things over can save you time and cost in the long run.

 

 

Written record best all round

You never know at the beginning of a tenancy if it’s going to run like clockwork or be a nightmare. Tenants and landlords can think each other perfect when they first meet, but the relationship between them doesn’t always work out. The landlord may have promised to fix that hole in the wall, then does nothing. Or the tenant may come with glowing references but have filthy personal habits and treat the house with complete disrespect.

WARKWORTH   $440,000   WAR21462