Bad tenants are a landlord's worst nightmare. Their penchant for vandalising property, sometimes just before absconding without paying the rent, has soured many an apparently sound rental accommodation investment. This is a source of woe not only for some individual investors but, increasingly, the country's biggest landlord, Housing New Zealand. New figures reveal that more than half of its 60,000 properties are being damaged by tenants each year. And that the cost of the damage - $18 million in the latest year - has risen by 68 per cent in the past year. And that, worst of all, of the $43 million worth of damage in the past three years, only $5 million was recovered from tenants.
Tuesday, October 5th 2004, 8:59AM
by The Landlord
Such a recovery rate would be unacceptable to a private landlord. Nor should it be tolerated by Housing NZ. Its tenancy agreements state that where damage to a property is not the result of normal wear and tear, the tenant is responsible for carrying out, and meeting the cost of, repairs. Clearly that is not being policed and enforced adequately, even if, as Housing NZ says, "damage" has been reclassified to incorporate work done to bring vacated properties up to scratch.
Reversing the trend will probably require a combination of carrot and stick. Incentives for tenants to keep their properties clean and tidy could be contemplated. In all likelihood, the cost would pale alongside the escalating sum being paid to repair vandalism. As well, errant tenants must be pursued more assiduously. Heightened co-operation between Government departments would be a good starting point. There should, for example, be greater use of the sort of device that sees rent arrears captured by Work and Income paying part of a beneficiary's income directly to Housing NZ.
