It’s that time of the year again, and we take a look back at the events that have impacted our industry in 2021.

Where do you start? 2021 has proven to be as equally as eventful as 2020. Before writing this article, I decided to read what I had written in the same article this time last year. Many of the things that I touched on last year are still ongoing issues.

COVID, housing crisis, social housing waitlist and a pretty dysfunctional heating calculator were all aspects of my article 12 months ago and will continue to be issues going into 2022. Also, how the industry tackles the unvaccinated will be a complex and intriguing challenge that we will all have to tackle over the next few months.

However, that is in the future. For now, we will turn our attention to the good, the bad and the ugly moments as we take a look back at 2021.

The Good: The Privacy Commission Guidelines

For too long, too many of us have been conditioned to treat tenants and prospective tenants as if everyone is a potential psychotic ‘Meth manufacturing’ gang affiliated and anti-social reprobate. Application forms were too long and arduous, asking for way too much information. Yes, landlords have a right to know who is going to be renting their property but likewise, we as an industry have a responsibility to protect tenants data and privacy and only collect information as to what is actually necessary.

Bad tenant
The 'Bad Tenant' database on Facebook had a number of property managers enrolled as members.

Multiple credit checks on multiple agencies would negatively impact prospective tenants’ credit history and this would be unfair, particularly in a tight rental market. Any tenant who would refuse to give consent to information being collected would find themselves at a huge disadvantage in regards to being selected and because of this, many tenants feel that they have no option but to consent to so much information being collected.

The recently released new guidelines came about after John Edwards, the outgoing Privacy Commissioner, expressed concern after a ‘Bad Tenant’ database group had been established on Facebook. Mr Edwards is well known for his dislike of certain social media platforms and announced that the practices adopted by landlords and property managers were to be investigated.

Enter Jackie Adams, a tough ex-police officer from Northern Ireland who is now the manager of Compliance and Enforcement for the Privacy Commission. He headed the investigation and had the responsibility to come up with new guidelines for landlords and property managers with regards to how they can select tenants and how they must manage the information they can collect.

The outcome is a great result for everyone as it gives clarity in regards to what we can collect and what we must do with the information once we have collected it. It also gives the Privacy Commission tools for enforcement as well as much needed protection of tenants and prospective tenants privacy.

A great outcome.

The Bad: The Government

I try to remain as non-political as possible when I write my articles. I will try to be as balanced in my views as possible and will criticise policymakers from both sides of the political spectrum if I feel it is necessary. In this article last year, I praised the Government in regards to its response to COVID and the passing of legislation that protected tenants and landlords.

This year, their performance has been nothing short of shambolic.

The party that was going to solve the housing crisis when they came to power in 2017 have completely lost their way and appear to be making policy on ‘the hoof’ in a forlorn attempt to control rising house prices and rising rents. There is a strong argument that many of their policies have simply made matters worse.

The issues started early in 2021. As we reported in our first newsletter of the year, the Government looked like it was going to miss the deadline that they had set for much-needed standards around what contamination actually is in regards to methamphetamine. Tribunal says 15 micrograms are in line with the Gluckman report whilst insurance companies are mainly going off the NZ Standards of 1.5 micrograms. This was meant to have been sorted out at the end of January 2021 as Government legislation stated that levels of contamination had to be set by then. That deadline passed and as we come to the end of the year, we are still no wiser.

Then, in March the Government announced plans to control house prices. Then they dropped a bombshell that no one saw coming. The removal of interest deductibility shocked everyone. This policy makes no sense whatsoever and has only led to further shortages of rental properties with rental inflation increasing at a much higher rate than normal. The latest Massey University Rental Report, fronted by professor Graham Squires showed that rents had increased 9.4% nationally in the year to June. This inevitably leads to more and more people turning to the state for assistance with an ever-increasing social housing waitlist. There are now over 25,000 homes required.

Graham Squires
Professor Graham Squires of Massey University.

We have seen little, if any action taken on regulating the property management industry even though this was an election promise, but then again, so was ‘no new taxes!’

In October, they resorted to announcing a joint policy with National which is basically an admission that they realise that they cannot fix the housing crisis alone. RMA reform is overdue but giving homeowners the ability to subdivide and build new properties without the consent of neighbours appears to be rushed and may have unintended negative consequences.

In November, they announced an inquiry into the high cost of building materials which is going to achieve absolutely nothing as there are many factors out of the Government’s control that is leading to such issues and this inquiry appears to be motivated purely to gain political points.

And finally, to finish off the year, the Government announces that the Heating Calculator that has been such an issue, particularly when it comes to new builds, is not fit for purpose and they are going to have adjustments.

2021 is a year to forget in regards to the Government’s track record on housing.

The Ugly: Unethical advice

In the middle of the year, I started to receive an unusual amount of phone calls from property management companies based in Christchurch. Apparently, a number of companies had been advised that you need to change the word ‘renewal’ to ‘extension’ when a fixed-term tenancy was coming to an end and you wanted to offer the tenants a new term.

I thought that this was unusual and straight away, I understood what was going on. This was an attempt to avoid compliance with Healthy Homes standards. The issue here is that under the standards all new and renewed tenancies must comply within 90 days of the commencement of the tenancy or the renewal post 1st of July 2021. There is no mention of compliance when it comes to offering an extension.

Therefore, some companies had resorted to offering an 11-month extension rather than a 12-month renewal. I for one, found this type of behaviour to be utterly unacceptable as well as unethical. It may also be viewed as an attempt to contract out of the Residential Tenancies Act which is a breach of section 137. The risks of deliberately breaching this are severe if you are a property management company. A company could face pecuniary penalties of up to $50,000.

I question what benefits a company faces by using such tactics? They are only delaying the inevitable and aren’t we best trying to get our stock up to an acceptable level?

I, for one, would never promote this as a strategy. An extension when used should be for a genuine reason. Advice such as this will only entrench the views of many that our industry is unprofessional and unethical that has no duty of care to its tenants.

Farewell from me!! I have enjoyed the ride

I have been writing articles now for several years and I have to say, I never struggle to find something to write about. It is a fascinating industry to work in and there is never a dull moment. After seven years of being in business, I am gradually stepping away from Real iQ.

Being the owner of a company does give you the freedom to express yourself which I have thoroughly enjoyed. I have always tried to keep balance in my articles and not to be controversial for the sake of it. People can see through that. I hope that you have enjoyed reading my articles as much as I have enjoyed writing them and I thank everyone who has taken the time to read them and an even bigger thank you to the people who provide me with feedback whether it be good or bad.

That is it from me, make sure that you all get to spend time with your families and whanau over the Christmas holidays. Take care, keep safe and thanks again for your support.

David Faulkner