In the wake of last week’s Tenancy Tribunal ruling against a landlord who failed to lodge bonds for 81 tenants, the Property Management Institute of New Zealand (PROMINZ)* has issued a call for mandatory licensing of landlords.
The Tribunal ruling involved a South Auckland landlord, who was a repeat offender, and who was fined nearly $180,000 for her failure.
She had previously been found guilty of renting sub-standard properties.
PROMINZ chair Karen Withers says they believe that a landlord licensing system would ensure only “fit and proper” landlords would be able to operate as landlords – including being able to advertise properties for rent.
The Welsh RentSmart model, which requires landlords to keep up-to-date on tenancy laws and legislative changes in order to manage rental property, would work well in New Zealand, she says.
“Property managers and rental agents would also be required to be licensed, but the requirements for them would be considerably higher.”
Withers says the majority of landlords are extremely competent, but the system would ensure that those who are not “up to scratch” would get educated or remove themselves from self-managing.
“There are already landlord organisations keeping their members regularly updated with tenancy information. These landlords would easily qualify as licensed landlords.
“We want tenants to have the reassurance that their landlords fully understand their obligations and comply under the Residential Tenancies Act the same way they do with our members.”
She adds that by capturing all landlords through a licensing system, the government would also have a more accurate and up-to-date set as data is currently drawn from bonds lodged with MBIE.
Traditionally, New Zealand landlords have been opposed to the concept of mandatory licensing.
But the NZ Property Investors Federation does support the idea of providing more education for landlords and, in particular, owner-managers.
NZPIF executive officer Andrew King says they are actually looking into developing a course to help their members carry out better, easier, and more cost-effective management on their properties.
“It’s a big task though and it is taking some time. But we hope to have something developed before the end of the year.”
They have taken a look at the Welsh system for landlords and it revolves around a relatively easy test which landlords need to pass in order to manage their rental properties, he says.
“Its message appears to be that landlords need to be educated to manage their properties and, if not, they should get a property manager.”
*PROMINZ is the new name of the Independent Property Managers Association (IPMA).