The announcement by Minister of Housing Clayton Gosgrove that Tenancy Tribunal Decisions will be placed on the internet is great news for the rental industry.
The NZ Property Investors Association has lobbied Government for many years to make the public documents easily accessible so that Tenants and Landlords can have better knowledge when making accommodation decisions.
Although Tenancy Tribunal decisions are public documents, they have effectively been withheld from public viewing due to difficulties in making them accessible. To date, Tribunal decisions have been recorded manually with pen and paper, then filed away. This made it difficult to access the information.
Tenancy Services and the Justice Department have been upgrading the system so that these important documents are finally going to be accessible to the public. This is a significant undertaking both financially and logistically. Tenancy Tribunal Adjudicators have been issued lap-tops to record judgements and a system has had to be developed to accommodate this. A database for the Tenancy Services website has had to be developed so that the Tribunal Decisions can be accessed and the information is accurate.
We understand that this initiative is a large undertaking and that complicated IT projects such as this often run behind schedule. While the system was meant to be operational in July last year, we are very pleased that its launch is imminent.
While information will be available to both Tenants and Landlords, we believe the new system will be an invaluable tool for landlords when selecting new tenants for their properties.
There are around 43,000 Tenancy Tribunal hearings each year, with approximately 90% being applications from Landlords. Of these applications, around 80% are for rent arrears and damage to property. This means that tens of millions of dollars are lost each year just on these two factors. Even tenant groups admit that it is the largest problem facing our industry.
Currently there are no penalties against offending tenants and a high chance that they will not be held accountable for their actions due to difficulties locating them. This situation encourages some tenants to not pay the rent and abscond if they have damaged the property.
When the Tribunal Decisions are made more available to the public, at least Landlords will be able to see if a prospective tenant has caused problems with previous tenancies. Landlords’ may still choose to accept them as a tenant, but they will have better information to make informed choice.
Landlords’ will need to improve their knowledge of industry regulations and how to professionally manage property as well, as the Tribunal Decision database records offending landlords’ as well.
In preparation for the new system, the Property Investors Federation recommends all landlords’ get tenants full names on Tenancy Agreements and use a form of photo ID to confirm who they are dealing with. While date of birth is not required for establishing if a person has a Tribunal Decision against them, it is worth having for credit checks and helping to locate absconding tenants.
Property Investor Associations around the country will be holding information nights on the new measures and how to benefit from them. Information on local Associations is at www.NZPIF.org.nz. Associations’ are also an independent and cost effective method of learning professional management techniques so that landlords’ don’t see themselves being listed on the database.
While access to Tribunal decisions is fair and helpful to all in exposing delinquent tenants and landlords, Government proposal on tenant insurance condones irresponsibility of tenants and further penalises landlords.
Despite Select Committee rejection of a bill to make landlords insure their tenants’ interests, Government are looking to restrict tenants liability for damage to the equivalent of four weeks rent.
This does not address the problem that Government is attempting to solve. If the Government wants protection for tenants then tenants should be made to have insurance. Restricting their liability just reduces their accountability and will lead to more rental property damage.
A majority of Tenants already have insurance cover through either contents insurance or the cheaper Third Party Protection insurance. It would be simpler, cheaper and more appropriate to make it compulsory for tenants to have insurance and for landlords to sight proof of the insurance.
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