Article: Speak Easy

The Rent Is Too  Damn High –  But Is It Legal? with Michael BoturThe Rent Is Too Damn High –  But Is It Legal? with Michael Botur

Trade Me has the numbers to prove the year kicked off with record high rents in rural areas as well as the main centres.

The median asking rent in Wellington in January was $550 per week - equalling Auckland. It’s partly to do with a 5 per cent nationwide downturn in the number of listings. One three-bedroom property in central Wellington had 127 enquiries in just 48 hours after it was listed. There has also been a three-bedroom property in Mount Wellington which at the start of the year received 116 enquiries in the first two days of being listed on TradeMe.

Things in the provinces are competitive too. Outside New Zealand’s three major metropolitan areas, the median rent climbed 6.8 per cent to an all time high of $395 per week and the latest figures show Northland having a $400 per week median (it’s much better at the other end of the country, where Southland has a median of $275 per week). Year-on-year growth is most extreme in Hawkes Bay – a 14.3 per cent increase in median weekly rent.

So what’s a reasonable amount of money to charge renters?

On the MBIE’s Tenancy website there is a guide to market rent in each area. It’s based on the bonds lodged with the MBIE and tells the number of bonds lodged in each six month period, showing what is a low rent, an upper rent and a cosy median. You can’t fool the website because when you go there, it shows the default market rent area based on your IP address.

If you want to experience the real raw coalface of what it’s like for renters, look at a Facebook group like House Rentals Whangarei, where there is always a very quick demand-driven response to any listing offered. It’s a place where a lot of people have to vent because so much emotion is tied up in having a secure place to live. “Beware, Landlords tend to raise the rent here every 6 months like a clock because they know the shift will cost,” one commenter told another in a mid-April discussion about competition for houses, “Try to close [the agreed rent] in the tenancy agreement.”

So let’s talk about the rules about how you can lock down the weekly fee in a rental agreement. It doesn’t matter whether your perspective is that of Landlord or Renter.

Here are the rules:
• Landlords can increase rent if the tenancy agreement allows this, but they must
give the correct notice and meet certain conditions. They must take into account
the type of tenancy, a notice period, and market rents.

• Landlords can only increase rent after the first 180 days of the tenancy provided the
increase is not within 180 days of the last increase.

• For a fixed-term tenancy, landlords can only increase rent if there is a provision to
do so in the fixed-term tenancy agreement.

• A landlord must give a tenant no less than 60 days’ written notice of a rent
increase. Boarding house landlords must give a tenant no less than 28 days’ written
notice. The notice must be served in writing.

• Returning to normal rent after a landlord has reduced it for a while is not
considered by law a rent increase.

• If a landlord is charging significantly more than for other similar properties, the
Tenancy Tribunal can make an order for it to be reduced. The tenant will need to
provide evidence that their rent is substantially higher than rent for other houses in
the area similar to the one they’re renting.

• There’s the amicable solution, though, if a landlord has done the responsible thing
and made a place better. A landlord and tenant can agree to an increase of the rent
(outside of the usual 180-day period) if the landlord has improved the property,
which increases its value and benefits the tenant

• Don’t forget that because bond is usually based on a couple of weeks rent,
landlords can increase the bond when they increase rent.

Any questions, hit up your local MBIE (not that it’s local, it’s in Wellington).

Michael Botur has published journalism in NZ Herald, Herald on Sunday, Sunday Star-Times and Mana and he writes a lot of fiction. He moved to Whangarei in 2015 and was ecstatic to be able to afford a house here.

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