Information for existing and prospective tenants
How do you know if you should rent or buy?
The answer will be determined by your financial situation, lifestyle and attitude. The reality is that given the current real estate market (particularly in Auckland), most people who rent don’t have a choice about whether or not to rent – they may not be in a position to save enough for the required deposit to qualify for a bank loan.
However, renting rather than buying can be a good option if:
- Your personal circumstances are likely to change.
- You need the freedom to be able to give notice and move on with little delay.
- You want the freedom to move without the pressure of a home to sell first.
- You aren’t ready for the financial commitment of owning a home.
Renting removes many of the responsibilities for maintenance to the property as this is mostly required to be carried out by the landlord, saving you time and money.
Perhaps the biggest reason why renting might suit you better than home ownership is if you are not ready for the ongoing financial commitment of repaying a home loan. This can take commitment and, depending on your personal circumstances, it may mean you need to cut back on your lifestyle and restrict your spending. You may have to postpone an overseas trip or another big purchase.
A tenancy bond is a payment of up to four weeks’ rent made to the landlord by tenants when they move into a property. The bond is held to cover any losses the landlord incurs if the tenant breaches any of the conditions in the Tenancy Agreement or the general obligations of a tenant.
The landlord will collect the bond from the tenant, but must lodge it with the Bond Centre within 23 working days, with a signed Bond Lodgement form (by both the landlord and tenant).
The bond is held by the Bond Centre until a Bond Refund form is filed (signed by both the landlord and tenant) by either the tenant or landlord. To ensure this part of the process progresses smoothly, it is important that the tenant and landlord lodge any Change of Tenants or Change of Landlords during the period of the agreement.
If there is any damage to the property at the conclusion of the agreement, and the landlord and tenant agree on the value of this, then the bond is divided between the parties accordingly. However, if the parties are unable to agree on the value, then one of the parties can apply to the Tenancy Tribunal for mediation.
It’s very important that landlords and tenants understand whose responsibility it is to have insurance to make sure that both parties are protected against loss. Below is a general guideline for landlords and tenants.
When selecting insurance make sure that you inform your insurance company that the property is a rental property.
The tenant must ensure they have personal contents insurance for their belongings to ensure they are protected against loss. Contents insurance will also cover your liability as a tenant. If you or another tenant damages the property you rent, you could be liable for repairs.
The landlord must have insurance for the property (the physical buildings and the section) against fire, storm, flood, damage from burglary, etc, if they want it protected against loss. To ensure coverage it is vital that you advise the insurance company that the property is tenanted. Check that your policy covers chattels, e.g., carpets and curtains.
We also recommend that landlords take some form of property and income protection insurance. This is an additional insurance taken out by a landlord to cover:
- Loss of rent due to tenants doing a ‘runner’.
- Loss of rent due to eviction.
- Malicious damage or theft by tenants.
- Rent recovery while malicious damage is being repaired.
Repairs and maintenance
Both the tenant and the landlord have responsibilities and obligations when it comes to repairs and maintenance which both parties should be aware of. After all, it is in both parties’ interests to have the property repaired promptly to prevent further damage and discomfort.
If tenants discover damage or maintenance that needs to be undertaken then they should inform the landlord as soon as possible. If the damage is serious or is likely to cause harm to someone and the tenants have been unable to contact the landlord after making every effort to do so, then the tenants may have the repairs done and ask the landlord to reimburse them (this applies to health and safety issues only). However, if the repairs are not of an urgent nature then the tenants must inform the landlord and ask them to fix it.
If the tenants have asked a landlord to make specific non-urgent repairs and the landlord has not done so in a reasonable amount of time, then the tenants have other actions they can take, such as serving the landlord with a Fourteen Working Day Letter asking for the work to be done. In such situations, it is recommended that the tenant contact Tenancy Services to ensure that they follow the correct procedures.
On some occasions, the landlord may discover damage that has been caused by the tenant. In these cases, the landlord should issue the tenant with a Fourteen Working Day Notice, which will give the tenant two weeks to fix the problem.
If these obligations are fulfilled it is advantageous to both parties. The tenant will have a safe, comfortable place in which to live and the landlord will maintain an investment that will continue to give good returns.
It is extremely important that tenants understand their obligations in relation to a rental property. By not fulfilling their obligations it is possible that tenants may lose their bond.
A tenant must:
- Pay the rent on time.
- Ensure the property is used for residential purposes only.
- Keep the property up to a reasonable standard of cleanliness.
- Inform the landlord of any damage as soon as possible.
- Pay for the repair of any deliberate or careless damage caused by the tenant.
- Comply with all conditions in the Tenancy Agreement.
- Allow the landlord reasonable access to the property.
- Pay for all electricity, gas and telephone used by the tenant.
- Cover the cost of water.
- Replace expired batteries in smoke alarms.
- Inform the landlord if there are any problems with smoke alarms as soon as possible.
At the end of the tenancy:
- Remove their belongings.
- Leave the property in a reasonable state of cleanliness.
- Return keys or any like devices.
- Leave the chattels provided by the landlord.
A tenant must not:
- Damage or allow others to damage the property, whether deliberately or carelessly.
- Use or allow others to use the property for any unlawful activities.
- Interfere with the neighbours’ peace or comfort.
- Make any alteration to the property in any way without the landlord’s permission.
- Refuse the landlord entry when they are entitled to enter.
- Sublet without the specific permission of the landlord.
- Damage, remove or disconnect smoke alarms.
Mediation is usually the second step of dispute resolution. The first step is usually to try talking to your landlord. If the first step is unsuccessful then either the landlord or tenant can apply to the Tenancy Tribunal for mediation.
Mediation takes place when an impartial person (someone not personally involved) helps the two parties come to a solution for their problem.
The mediator will allow each person to explain to the other how they view the problem, help them discuss the possible ways to solve that problem and encourage them to choose the best solution for both of them.
A mediator is not able to make a decision for the parties. They can only help and encourage the parties to reach an agreement.
The decision is put into a mediated order which is binding on both parties.
Occasionally the parties in mediation are not able to agree upon a decision. If this is the case, then the dispute will go to a Tenancy Tribunal hearing.
The Tenancy Tribunal is a special court set up to deal with unresolved problems between landlords and tenants which they have been unable to settle themselves.
A Tenancy Tribunal case normally takes place only after mediation between the parties has been attempted and the parties have been unsuccessful at reaching a resolution.
A tenancy adjudicator oversees the case and makes a decision, which is legally binding on both parties.
The adjudicator listens to both parties, any witnesses and evidence that either party feels is important and makes a decision based on this information and any provisions in the Residential Tenancies Act.
For more information, visit the Ministry of Housing website.
- Police, fire, ambulance: 111
- Customer service: 123
- Directory: 018
- Faults: 120
- Operator national: 010
- Operator international: 0170
Vector – Electricity
- North Shore, Waitakere or Rodney: 0800 948 100
- Auckland , Papakura: 0508 832 867
Vector – Gas
- Distribution network: 0800 764 764
Transmission network: 0800 734 567
- Customer service: 0800 521 212
- Faults & emergencies: 0800 491 212
Contact Energy (Gas)
- Customer service: 0800 809 000
- Customer service: 0800 10 18 10
- Faults: 0508 832 867
- Gas faults: 0800 232 858
- Auckland Council: 09 301 0101
Guidelines on things to be done before you leave a rented property managed by Lochore’s:
- Net curtains should be hand washed.
- All rubbish to be removed from property.
- Council-supplied general waste and recycle bins to be cleaned and left at property.
- Lawns to be mown and gardens to be weed-free.
- Replace any broken glass or mirrors.
- Ensure all light bulbs are working.
- Leave all picture hooks in walls.
- House to be flea bombed if a pet has been in residence.
- Oven and elements, warmer drawer, racks and trays all cleaned.
- All service areas to be cleaned, e.g., kitchen, laundry, bathroom, toilet.
- Walls to be cleaned, e.g., superficial hand marks removed.
- Windows (interior), window sills, skirting boards, any fixed shelves all to be wiped down.
- Cobwebs to be removed from eves and internal walls.
- All garage and/or security remotes to be left at the property.
- Advise telephone and power companies of change of address.
We recommend that you refer to your ingoing Property Condition Report to ensure that the property has been left in a condition not less than that stated in the ingoing report.