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 The more tenants there are in your rental property can often result in slightly more wear and tear. However multiple tenants can also mean that there are more individuals responsible for paying the rent. These two issues need to considered when securing new tenants for your property and an appropriate balance must be found.Depending on the type of property and amenities you should know how many residents your property will generally suit. When tenants fill out an application to rent your property the application form should, among other things, confirm how many residents will be in occupation. This allows you to help make an informed decision as to whether the party may suit the property. When completing your tenancy agreement the terms should include a maximum number of permanent residents. Frequent inspections are needed during the life of any tenancy and these are usually quarterly, six monthly or yearly depending on the location of the property and the quality of tenants. During these inspections you should be recording how many residents are in occupation and make sure that this is in line with the tenancy agreement. If the number of permanent residents exceeds the number allowed in the tenancy agreement, this is a breach of the tenancy agreement. Under the Residential Tenancies Amendment Act 2010, if the tenant exceeds the number of occupants then the tenant is committing an unlawful act and exemplary damages may apply. The landlord can either issue notice of the breach and request the tenants reduce the number of occupants, or alternatively negotiate an increased rent amount to cover the additional residents. Increasing the rent will often help offset any increased wear and tear. If a landlord takes this approach then they need to make an amendment to the tenancy agreement or complete a new agreement recording these changes. If you decide that the excessive number of residents is too many for your property then the landlord must take certain steps. As with any breach in the agreement the landlord is required to send a 14 day written notice of the specific breach giving the tenants 14 working days to remedy this breach. If the tenant fails to reduce the number of occupants then the landlord must apply to the Tenancy Tribunal to reduce the number of residents, terminate the tenancy and at the same time can request exemplary damages. If you do not specifically apply for these outcomes you will generally not receive them, as applications to the Tenancy Tribunal require specifics so that the other party is aware of your exact intentions. The Residential Tenancies Act allows for up to a maximum of $1000 exemplary damages payable to the landlord for a breach of maximum residents. Exemplary damages act as a deterrent to stop tenants committing unlawful acts. These damages are also awarded to acknowledge and compensate the landlord for additional resources they have had to invest to take action against the breach. The Tenancy Tribunal will determine how much they actually award in damages and this is usually dependant on the strength of the case the landlord presents. If you find yourself having to take action against an excessive number of occupants then record all phone conversations, all written correspondence, all inspections and most importantly the time taken to carry out this process (including applications/mediations and tribunal hearings). When you present your case at the Tribunal you should confirm how many hours you have spent trying to solve this breach of the agreements. The more work you have had to do and the greater the inconvenience usually results in higher exemplary damages awarded. Tracking the number of residents is an important part of managing your property. It is common that this can be a precursor to other problems including damages. It is vital that all landlords keep an eye on this to help ensure a smooth problem free tenancy. Simon Allen Allen Realty Ltd October 2010
Property Management Testimonial
"As an overseas owner of a number of residential properties in the Auckland area, finding an experienced and trustworthy property management company to effectively manage all of my properties has been crucial to the success of my long term investment goals. Fortunately, in Allen Realty, I have found an outstanding partner to effectively manage all of my property needs and maximise my rental income. |
