Thinking about putting a basic kitchen and bathroom in the garage and turning it into a rental flat to make the weekly budget a little easier?
Already got a converted building on the property that you’re renting out?
Or got a property with a main house and some minor buildings and you’re renting everything? The rent’s cheap, the tenants are just glad to have a roof over their head, you’re making money, everyone’s happy.
Checked the consents on all those buildings (even the main house)?
Buildings that are not consented for residential use cannot be rented to residential tenants. You cannot skirt this by trying to come up with a clever form of contract to avoid the rule because the Residential Tenancies Act captures contracts intended to avoid its effect.
Now, who cares right? Pesky red tape. Governmental overreaching. Yet another way hard working kiwis are prevented from using what we’ve worked hard for to get ahead. Besides, how is one department going to know that you don’t have consent and how is the other going to know you have tenants. They’ve all got bigger fish to fry.
Well maybe. But generally consent processes exist to ensure buildings perform to some minimum standards, and in the context of renting properties to residential tenants that gives those tenants a very basic guarantee of quality.
And as for how anyone’s going to know? Well that’s why we’re writing this. One of the first prosecutions has recently succeeded for a landlord renting out substandard premises. That’s a criminal conviction with some serious penalties. In particular the landlord was ordered to refund over $15,000.00 in rent and other financial penalties were imposed. If you’re a property owner with a day job a conviction may have implications for your career.
It wasn’t as though the owner in question didn’t have the chance to get things right. There was ample evidence of the local council warning him about the lack of consent and therefore the inability to have tenants. He ignored them, and MBIE eventually filed charges.
What do we take from all of this? The following:
- Check your rental properties for all necessary consents. If there a things you think might need consent that don’t have consent, look into it right away and do what you need to do to get consent.
- The Government is putting some more resources into policing residential tenancies and in particular whether landlords are doing the right thing. If there has been relatively light scrutiny so far that is likely to change.
- An unhappy tenant could easily bring you to the attention of MBIE.
- As with so many things in life, an ounce of prevention is worth a pound of cure.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:
Wallace Revell
wrevell@farry.co.nz
09 379 0055 or 03 477 8870
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.