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Breaching The Peace

Breaching The Peace

Is it possible for a landlord to terminate a tenancy because the tenant’s teenager’s dangerous driving is causing safety concerns among the neighbouring tenants?

By: Property Investor Team

3 April 2022


My tenant’s 14-year-old endangers other tenants on the property by continuing to drive unsupervised on a shared drive and entering the orchard portion of the property. I, as landlord, received written notification of concern from another tenant. I have lodged an application for the termination of the tenancy of the offending tenant. WorkSafe and the police don’t seem interested.

If I give the tenant notice and take the house back for my own use am I setting myself up for a retribution claim from the tenant I asked to leave?


Under the Residential Tenancies Act, tenants must not interfere with the reasonable peace, comfort or privacy of other tenants and neighbouring properties. Any behaviour or action that disturbs other tenants or neighbours may be a breach of the Act.

While this breach has occurred by the 14-year-old mentioned, because the tenancy agreement is between the tenant and the landlord, the tenant is responsible for the breach that has occurred.

We would encourage you to try and discuss this issue with your tenant if possible and explain how the actions of the 14-year-old are a breach of the Act. If your issue has not resolved after talking to your tenant, you can issue a 14-day notice to remedy.

You can address the breach of reasonable peace, comfort and privacy and note what the tenant can do to resolve the breach. On the Tenancy

Services website there is a notice to remedy template available. If the breach is not resolved in the set timeframe, then you may apply to the Tenancy Tribunal to end the tenancy. - Jennifer Sykes

Heat Pump Depreciation


I have a rental property that had a heat pump in place when I purchased it. The existing heat pump needed replacing 16 months into the tenancy. I have just had my tax return for the year questioned as I claimed the cost of the new heat pump as maintenance/repairs and also the depreciation for the 10 months that the old heat pump was in the house before being replaced. I’ve been told I can only claim depreciation, not both the cost of the new one and depreciation of the old. Is this correct?


I assume the old heat pump was scrapped when the replacement one went in. To be consistent, the book value of the old heat pump should have been written off and would then be deducted as a loss on disposal and the new one capitalised and depreciated. Heat pumps can be a little contentious given they are attached to the building and damage can eventuate during removal.

Arguably, they become part of the building once installed. It is rare to see them removed when a property is sold. Because of this they are sometimes treated as capital additions to the building itself. If this were the case there would have been no depreciation as the original heat pump would have formed part of the building. But, equally, the replacement heat pump would then have constituted a repair to the building and may be fairly deductible in that context. - Mark Withers

Newbie Trading Advice


My wife and I are looking at property trading as our next plan. We currently own our own house and one buy-and-hold investment property. So we are beginners in terms of trading property. For that reason, we thought it best to wait until a rise in the property market as a rising tide can hide a multitude of sins. Buying in a flat market might catch us out. What would your thoughts and advice be on this? Is trading a good strategy in the current market?


You are correct that a rising market will potentially protect you from mistakes, but it can also make it harder to find a suitable deal and one with a reasonable discount. We do have clients who make money trading at any stage of the cycle but it’s important to adjust the buying rules to compensate for a higher level of
|risk. If you do decide to start in the short term I would recommend a |few points.

1. Make sure you are a market expert in the area you look to purchase. Far too many people look in too many areas and thus can’t tell whether a deal is good or not. By focusing on a couple of suburbs and doing extensive due diligence on them prior to purchasing you increase your chances of having successful transactions.

2. Build more contingency into your numbers so that if you need to hold the property for longer than expected or your costs blow out a bit you can still run at a profit.

3. Run numbers on if you need to hold the property for a while and make sure that you can afford to do so. We are coming up to an election and the wage subsidies and other relief designed for Covid-19 will be coming off. If the market was to turn you don’t want to be pushed into a forced sale situation. - Kris Pedersen

‘GST can only be claimed by the associated company on purchase if you originally paid GST when buying the apartment (ie: you bought off a GST registered vendor)’

Commission Charging


Our property manager performed badly so we gave the notice required to terminate the rental management agreement, which was accepted. She did nothing during the notice period and then overcharged four days’ commissions. (The last rent payment to her was on a Thursday, the end of notice date was on the immediate Sunday. She went ahead and charged the commission for the whole week.) She refused to refund the commission overcharged and argued that she’s allowed for any rent collected. Is she legally allowed to charge commissions for the four days after the notice period?

My understanding is that she’s not even our property manager anymore in these four days.


Your property management agreement should state the basis of commission charging. Most management agreements should state that fees are deducted “from rents received”. In these cases it is perfectly correct for a property manager to deduct full commission from a final rent payment that was collected even one day before the management ends.

Linking the deduction to a rent processing activity is a sound decision. That way the manager avoids a potentially complicated activity dealing with partial rents. - Bernard Parker

Property Transfer GST


I have owned an apartment in Auckland since before my marriage and before my company was formed. I want to transfer it to the company owned by me and my wife. We renovate and on-sell houses. My questions are:

1) Can I claim the GST on the property after transfer?

2) Would this be a case of associated persons?

3) How would we value the property? And

4) Can we continue to rent the property even though we usually buy and sell?


If you transfer a property that you have held as a long-term residential rental to a GST registered company as you propose, then that will be a transfer subject to the associated persons rules for GST. Thus, you are right to be concerned about the GST consequences. Put simply, GST can only be claimed by the associated company on purchase if you originally paid GST when buying the apartment (ie: you bought off a GST registered vendor).

Further, if you did pay GST on purchase, then the amount of GST that would be claimed by the company is limited to that GST originally paid. (Ie: it is not based on current market value unless it is lower than original cost, in which case the GST claimable would drop to match the lower market value.) If GST was not paid when you originally bought the apartment, then the company will not be able to claim GST on the purchase from you.

While the ability to claim GST is limited, such a transaction still has to occur at market value for tax purposes and this is best established by getting a registered valuation. A property that is bought for trading purposes can be rented out residentially, but there will be consequences of this from a GST perspective depending on how long the property is rented for.

I would suggest you proceed with extreme caution here. In fact, I would question whether transferring the property to the company is the best course of action for you. - Matthew Gilligan