Q

I see you can break a fixed term tenancy if the house is uninhabitable, but what about if your flatmates are constantly having parties? There are house rules as part of the agreement with this tenancy which says if they are breached we will be given notice.

This includes rules about parties and noise. My flatmates party almost every night and I awake to bottles on every surface in the lounge and kitchen and urine on the toilet floor. I have reported this repeatedly and have moved out now. But the property manager will not let me out of the lease. Do you have any advice, please?

A

Under the Residential Tenancies Act, a fixed term tenancy cannot be ended by either party giving notice to terminate the contract before the agreed end date. Fixed-term tenancies can only be ended early: by mutual agreement between the landlord and all tenants; or, if the property undergoes a mortgagee sale; or, if the property is destroyed or is so seriously damaged as to be uninhabitable; or, in certain circumstances, by Order of theTenancy Tribunal.

The options available will depend on the type of tenancy arrangement you have in place. If you are listed as a tenant on the same tenancy agreement with your flatmates, in order to be released from the fixed-term you will need the written consent of the landlord and all of the other tenants. This may involve you finding a replacement tenant to take over your interest in the tenancy. The landlord can continue to hold all tenants listed on the tenancy agreement liable for the tenancy until the fixed term comes to an end, or until a mutual agreement between all parties is reached.

If your tenancy agreement is for your room only with use of the shared common areas, then your landlord has a responsibility to take all reasonable steps to ensure that none of the tenants interfere with the quiet enjoyment (the reasonable peace, comfort, and privacy) of their other tenants, in the use of the premises.

In this situation, a tenant could give the landlord 14 days’ written notice requiring the landlord to take all reasonable steps to resolve the problem. A template for 14 days’ notice and information about service times can be found on the Ministry’s website. If the notice is not complied with, the tenant may make an application to the Tenancy Tribunal to have the matter resolved, which may include an order seeking termination of the tenancy.

It is unclear from your query what type of tenancy agreement you have. If your tenancy is considered a boarding house tenancy, other options will also apply, including giving notice to end the tenancy. (Boarding house tenancies cannot be for a fixed term). - Allan Galloway

GST changes in hotel sale

Q

We bought a hotel apartment in 2007 GST included. We claimed the GST back at
12.5%. We have just sold the apartment in April 2016 to a non-registered GST buyer - again GST included. Noting that the GST is now 15%, how do we work out the GST payable? Will the total sale amount be at 15% or will some still be at 12.5%?

A

Despite being acquired when GST was at 12.5% the supply now will be subject to standard rated GST at 15%. If the purchaser had been GST registered and provided a warranty that the property would form part of their taxable activity, and would not be their place of residence, the sale would have met the criteria for compulsory zero rating. Sale to an unregistered purchaser leaves you with the 15% output tax liability. - Mark Withers

Tenant immunity under insurance

Q

A tenant in a rented property accidentally broke a weatherboard when he collided with the house while driving the property owner’s ride-on mower. He has claimed immunity from the cost of repair of the weatherboard under the recent Court of Appeal ruling in Holler and Rouse v. Osaki. That case grants a tenant immunity if a landlord is covered by insurance. Given that the landlord owned both the house and the ride-on mower, is this accident covered by the landlord’s insurance? If not, then would the tenant have to repair the damage that he caused?

A

The ownership of the mower is irrelevant. It was the driver’s negligence that caused the damage to the house and the driver is the tenant that is the issue.

Therefore, can the landlord or the landlord’s insurer sue the tenant? Answer, no - if the landlord holds insurance on the house for that impact damage (unless the tenant did it deliberately or in the course of committing a serious criminal act).

This is all set out in the Property Law Act. All the Holler vs Osaki case did was clarify that the Property Law Act provisions apply to the Residential Tenancies Act as well. Landlords need to understand it this way: the intention of the provisions is to provide the benefit of the landlord’s house insurance to the tenant as though the tenant is an insured under that policy as well. - Myles Noble

Owner occupier to landlord

Q

We are looking to buy a house to live in, but may consider renting it if it does not suit our needs. We are in the Auckland area and would appreciate advice on how our home loan may be affected if our owner occupied home becomes a rental. Will we need to meet the 70% investment LVR restrictions even though it's our only property and has previously been owner occupied?

A

The banks aren't going to make you reduce your lending to 70% if you move out and rent. However, if you are looking to purchase another owner occupied property you are not going to be able to gear this above 70% if you are advising that it is going to become an investment property. - Kris Pedersen

Missing rental payments

Q

My property manager is consistently missing payments from the tenant to the landlord's account. How can I get back the money when the property manager claims they are accidentally putting it in a wrong account and that they can only pay one amount per week? I am currently owed nearly $1000 in arrears. How do I pursue this further? Fraud police? I would like to alert the Tenancy Tribunal as this person should not be allowed to be a property manager.

A

You have not clarified whether the tenant is failing to pay the rent on time, or whether the tenant’s rent is late in being paid by the property manager to the property owner’s account. If the property manager has not received the rent, the normal procedure should be to issue the tenant with a 14-day Notice to Remedy, followed if necessary by an application to the

Tenancy Tribunal for an appropriate order. However, if the property manager has failed to pass received rents on to you the property owner – you will need to ask why. There may be a very good reason for rent proceeds to be withheld. As in any business, most issues can be solved by communication. You should ask your property manager for details of the late payments. If you cannot resolve a dispute, the proper course is an application to the Disputes Tribunal. The Tenancy Tribunal cannot adjudicate matters between an owner and a property manager. - Bernard Parker