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APIA issues sub-let warning

“Slumlord” crackdown could lead to good landlords being forced to refund rent to tenants who covertly sub-let illegal spaces, the Auckland Property Investors Association (APIA) is warning.

Wednesday, May 31st 2017, 4:00PM

by Miriam Bell

The new Residential Tenancies Amendment Bill (No. 2) will give the Tenancy Tribunal the power to order a landlord to pay back rent received for a period where a property is deemed to be unlawful, according to APIA.

This could lead to a situation whereby a landlord is ordered to repay rent for a property that was sub-let without their knowledge.

APIA president Andrew Bruce said the association wants to make sure that any law change does not capture rental sub-letting situations that occur without the landlords knowledge.

“For instance, if a tenant uses or sublets a garage as a bedroom without the landlord knowing, would the bill then give the tenant the ability to bring about a claim against the landlord for unlawful premises?

"That does not seem equitable to me."

Sub-letting is common in New Zealand and APIA is generally supportive of tenants using sub-letting as a way to supplement their rental payments.

Theoretically, sub-letting is only permissible currently if the tenancy agreement allows it and the tenant has obtained the landlord’s consent.

But the growing use of vans in back yards and sheds as extra bedrooms is a disturbing practice, Bruce said.

“The days of laissez-faire landlording are over. Not only are tenants putting sub-tenants into unhealthy and unsafe living environment, the legal ramification on landlords could be severe.”

This means that landlords shouldn’t neglect their properties for a long period of time - rather they should conduct regular inspections.

Bruce said that by maintaining a regular presence landlords will have a better handle as to their tenant’s activities and can address potential issues early on.

Additionally, APIA recommends that landlords only consent to sub-letting if they are satisfied the sub-tenant will be occupying a bedroom inside the house and not an outside space like a shed.

They should also be able to retain reasonable oversight of the property to ensure the health and safety of all the tenants.

Read more:

Tenant damage law change 

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Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 10 July 2020 9:02am

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