Government won't rule out regulating property managers, as new report reveals tenants' woes

A highly critical report on the country's property managers reveals a litany of renter horror stories, including tales of negligence, deceit, discrimination, privacy breaches, dishonesty and surprise fees.

To follow is an excerpt from a story in the New Zealand Herald.

You can read the original article here.

The report - which draws on anonymous accounts from tenants and landlords - says it is time for property managers to be properly regulated.

The study, released today by Anglican Advocacy, titled A Decade Overdue, says many of the problems experienced by landlords and tenants in this country can be linked to property managers, who are not required to be licensed or accredited.

The Government says it shares some of the concerns about the sector. It will not rule out regulation, but says it will not be included in rental reforms.

The industry is resisting reform, saying the report is not representative of the property management sector.

The Anglican Advocacy report compiles dozens of first-hand, anonymous accounts from tenants and landlords about negligence, deceit, discrimination, privacy breaches and dishonesty by property managers.

Tenants spoke of surprise fees imposed by management companies which were not included in written agreements, and failure by some managers to lodge their bond. In one unusual case, a tenant complained that a property manager had mysteriously made all of the tenants' beds during an inspection at which they were not present.

"One of the most common things was a level of deceit or misinformation – not giving accurate information, not passing on information between landlords and tenants, but also incredible delays in sorting out maintenance and problems around the property," said Anglican Advocacy director Jolyon White.

He said property managers were responsible for millions of dollars in rent and billions of dollars in property, yet they faced none of the regulations imposed on real estate agents.

"The main reform that we think is necessary is to have a regulatory body for property management, so that they have a code of conduct that they sign up to, so that they have training that they have to undertake, and they have the ability to be sanctioned and have their licence taken away from them."

The industry has set up its own regulatory body, the Independent Property Management Association. It is voluntary and aims to raise standards and give tenants a place to lay complaints. The association has about 100 members - a minority of the estimated 1200 property management companies around New Zealand.

President Karen Withers dismissed the new report, saying it was selective and had been compiled from "a shout-out on Facebook". It did not represent the industry as a whole, she said.

Her organisation was not dead against regulation, she said, but it believed any reforms should be applied more widely to all landlords rather than just property managers.

Building and Housing Minister Phil Twyford said he was concerned about recent stories in which property managers had asked to see bank statements of prospective tenants and made judgments about their spending, and reports that property management companies were charging a fee to process applications faster.

He said the Government was focused on rebalancing the rights and responsibilities between tenants and landlords, partly through tenancy reforms expected to be in force by mid-2020.

"I have not ruled our regulating property managers after the completion of this work," he said.

Parliament considered regulating property managers in 2007 along with real estate agents, but decided against it despite strong support from the real estate industry.

Since then, there has been significant growth of small, unqualified property management companies.

"That was a mistake," White said. "While we're reviewing tenancy laws now, I think it would be a tragedy to repeat the same mistake that's left so many vulnerable people hurt."

Will Stuart, from Christchurch, says a disagreement with a property manager over a mysterious fee later came back to haunt him.

After renting a property in Riccarton for three years his property manager asked for a $150 payment to renew the lease - a fee which had never been charged previously and was not included in the tenancy agreement.

"All they said was, 'That's the new policy, you have to pay it'," he said. Complaints to the property manager and the landlord went nowhere.

After getting advice from staff at the Tenancy Tribunal, Stuart challenged the property manager's company about the fee and it backed down.

But that was just the start of the problem. A year later, when he was looking for a house, he was bemused when he was rejected by several landlords.

"We found that the places we were looking for, as soon as they got our references, they said, 'We can't let this to you'. I asked one why, and they said, 'You've got bad references'.

"[The former property manager] was telling prospective landlords that we were troublemakers and that we would go to the Tenancy Tribunal willy-nilly just to get our own way. That's what they did to us out of sheer spite."

Stuart finally found another place to live after "begging" a landlord, though it was a run-down house which was set to be demolished in two years. He now owns his own home.

"In the four years we had been living [in the Riccarton flat] we never got told to clean up the house. We passed every property inspection with flying colours. One time we got a citation telling us we needed to do something about the garden and we paid $400 to get a gardener to do it.

"We'd given the landlord four years of good service, looked after the property, paid our rent on time. As a landlord, that's all you really want. So to have the property manager get rid of some random tenants and then go through all that cost just doesn't make sense for your investment."