The Government's haphazard approach to property management reform is creating confusion and could lead to a reduction in rental stock and see rents increase, says leading provincial real estate company, Property Brokers.
Property Brokers, which manages thousands of properties for investors in the central and lower North Island and the South Island, says a slew of ill-considered legislation is forcing professional managers to decipher what each new piece of legislation means, often resulting in costly upgrades to properties that prove to be unnecessary. The lack of a clear plan of action is also discouraging investment in the rental sector.
Property Brokers’ Divisional Manager for Property Management, Robin Congdon, said although he agreed with many of the changes being introduced, a drawn-out process of amendments and Bills to regulate the industry had left professional managers uncertain about what was next.
“At present it seems to be one change after another and this is concerning to us as a business. It is not a climate which is encouraging investment in the rental sector and is likely to reduce rental stock and see rents increase,” Mr. Congdon said.
The legislation and changes in question include a Bill proposing a ban on letting fees called the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill; a long-awaited Bill, the Residential Tenancies Amendment Bill (No. 2) to review who is responsible for damage to rental properties; and a review of the Residential Tenancies Act.
Added to this are changes and a review of the current tax allowances such as the ring fencing of losses, the Brightline test and capital gains in the future. The Ministry of Housing and Urban Development is also currently calling for submissions reviewing the Healthy Homes Guarantee Act 2017 Regulations - Healthy Homes Standards.
“None of the changes come out as a clear action plan and guidelines. They are just amendments to the Act or a Bill that need to be translated and tested (often at Tribunal). That takes time to get it right.”
Mr. Congdon also said the government was ignoring the difference between properties managed by professional companies and those by private landlords.
“The government seems to see property management companies as a convenient scapegoat and are actively warning that they will come after us to enforce their legislative programme. Investors are our clients and there is only a certain amount of influence we have, so it would be more effective for the government to work with us to drive improvements.”