What are my rights as a landlord when it comes to tenant selection and house rules?
When we work with landlords who are new to owning investment property, we get many requests to ask tenants to adhere to certain rules. And we get asked to select a certain type of tenant. There are things we can do to ensure we select the best tenants, but we can’t discriminate, and we can’t put rules in place that are outside of the Residential Tenancies Act.
It’s your right to decide whether or not you rent your property out. If you decide to rent it out, you become bound by the Residential Tenancies Act 1986, The Privacy Act 2020, The Health and Safety at Work Act and the Human Rights Act 1993. Once you decide to place your property up for rent and collect rent, you are agreeing to be bound by all of the above, which restrict your rights in various ways and increase your responsibilities.
Tenants also have to adhere to the Residential Tenancies Act, so they have to look after your property and cause no willful damage; however we can’t make them agree to a set of rules that restricts them from quiet enjoyment in their rental property. And we can’t discriminate when choosing tenants. Neither can private landlords, and to do so is an unlawful act for which landlords can be fined. If you ask a tenant to agree to something that contravenes or contracts out of the Residential Tenancies Act, you are committing an unlawful act, and you can be fined for this also. For example; trim trees; shampoo carpets, cut hedges.
This is where we come in as your property manager. We have over a decade of New Zealand rental-industry experience, and we’ve put together systems and processes based on our experience managing thousands of tenancies across New Zealand.
How do we select the best tenants?
We start by using a sophisticated software platform called Renti. This platform allows us to collect tenant information and tenancy applications, while not breaching the Privacy Act.
We have a dedicated lettings team who are experts in selecting the best tenants. Many property management companies use their property managers to select the tenants – but we’ve invested in a specialist team, as selecting the right tenants in a timely manner is so important for success in managing and owning rental properties. The lettings agent meets with prospective tenants, then assesses their application. Thorough background, credit and reference checks are conducted, including:
- Tenancy tribunal results
- Outstanding arrest warrants
- Court judgements
- News results
- Social media results
- Previous credit enquiries
- Director affiliations
- Shareholder affiliations
- Ministry of Justice fines
The lettings team then speaks on the phone with past landlord references, employer references and personal references. If the potential tenant passes all of these tests, our final check is the credit check, and any tenants with a poor credit rating are rejected at this stage.
The team cannot choose tenants based on age, race, marital and family status, gender, employment status, physical or mental disability or illness or sexual orientation; to do so would be breaching the Human Rights Act. When we present potential tenants to our landlords, they cannot decline a tenant based on any of the above either, as they would then be in breach of the Act. Important further reading on this here:
The final step in tenant selection is having the property manager review the selected tenant – this means that two people at Aspire have agreed that the tenant would be a good one, before they are presented to our landlords.
We pride ourselves on having an excellent tenant-selection process, and we always choose tenants that we feel will look after your property the best, who will keep it clean and tidy, and who will be able to pay the rent on time. We ask our landlords to trust our processes; as we have a proven track record of happy landlords and happy tenants and we know the tenancy law. Our current rent arrears over 5 days is % .04% vs an industry average of 3%.
What house rules can I ask tenants to abide by?
A landlord cannot put any rules into a tenancy agreement that contracts out of the Residential Tenancies Act. You can read the full Act here:
https://www.legislation.govt.nz/act/public/1986/0120/latest/DLM94278.html
We can provide the tenants with house guidelines as required; such as how to operate the heat pump, how to best ventilate the bathroom etc – but we cannot make them sign a document saying they will abide by rules that aren’t in the Act or put clauses into the tenancy agreement that contravene the RTA
Here’s some good information around unenforceable clauses:
What about end-of-tenancy cleaning?
We get many questions about how clean we can ask tenants to leave a property at the end of a tenancy. You can no longer ask a tenant to get commercial cleaners in, and the RTA stipulates that a property only needs to be left “reasonably clean”. But how clean is “reasonably clean’? We have represented property owners at the Tenancy Tribunal around this matter – see this article to read more on the issue and to see the results at the Tribunal.
Trust us to navigate the Acts and laws for you
We manage over 700 properties, and we pride ourselves on having very happy customers, both property owners and tenants. We have in place the strongest tenancy agreement that is legally allowed under today’s legislation. We take proactive steps to reduce the risk of things going wrong in your rental property by selecting the best tenants, then educating them with regular updates and a tenant handbook.
It is our job to find you the best tenants, who will look after your property and pay the rent on time; while also ensuring you do not receive any fines or break any laws while putting tenants in place.
