As South Auckland’s property market heats up, those in poorly managed rentals often face a hard choice – complain and face the consequences, or stay quiet and keep their home.
Neo is a half ragdoll, half moggy eight-month-old kitten.
For Bronwyn Cann and Aaron Smith, the excitement surrounding Neo’s arrival was palpable – and finding a place that not only allowed them to welcome him into their lives, but was also close to work, was a dream come true.
The $475-a-week one-bedroom studio apartment was part of a virtually brand new multi-unit block managed by Investment Portfolio Management, nestled close to the south-western motorway, and only minutes from Māngere Bridge’s thriving café scene.
“Being close to work was the main reason we wanted to live there specifically, as we’d been commuting from west Auckland and traffic was terrible,” Cann says. “It really makes a huge difference to your quality of life when you don’t have to spend two hours everyday sitting in traffic.
“I was also super excited to finally have the chance to get a cat. We’d been wanting to get one for a while, so that was a big factor in us choosing them.”
But Cann and Smith’s ideal living situation soon turned into a nightmare.
When the country was plunged into a Covid-enforced lockdown, the pair found themselves in an uncertain situation. They were put on reduced salaries at work and were worried they might lose their jobs. Adding to their stress, a letter was slipped under their door just as Covid restrictions were lifting.
“The letter said it was time for us to renew our fixed-term contract and we could either sign up to a fixed term contract or they would assume we were moving out,” Cann says. “We asked if we could change to a periodic contract because we were on a reduced income and it was all uncertain at that point.”
Among a raft of law changes made by the government during the first lockdown was a temporary restriction on tenancy terminations: all expiring fixed-term tenancies would automatically change to periodic tenancy, unless otherwise agreed by landlord and tenant. When Cann and Smith informed their property manager that this rule meant they didn’t need to leave, things escalated.
“There was a bit of back and forth and they tried to get us to sign a shorter fixed-term contract,” says Cann. “As soon as we quoted the legislation and that we were wanting to go to periodic, they sent an email saying that we had a cat in our apartment and that’s a breach of our contract and we had 14 days to sort it out. But they had actually advertised the apartments as pet friendly.”
The couple applied to the Tenancy Tribunal to have their situation heard by a mediator – and the mediator agreed with them, saying they could keep the cat and move to an open-ended tenancy. However, two days into their new agreement, they were served a 90-day termination notice.
Cann quickly fired off another application to the Tenancy Tribunal for a hearing. Four months and two successful tribunal hearings later, Cann and Smith are owed over $1,300, but are still awaiting payout and the couple have had to move back into Smith’s parents’ place in west Auckland.
Jorden Potaka has also had to quit on the Auckland rental market. He moved into a one-bedroom, furnished apartment in Māngere Bridge after his employer transferred him to Auckland. But when Covid-19 “crushed his hours” at work, he asked his property manager if he could break his fixed-term tenancy.
“When I went to my property manager and told them I had to move out, it turns out they had not even lodged a bond and they also tried to withhold my bond and charge me all these cleaning costs which amounted to over $700.”
Potaka contested the cleaning costs at the Tenancy Tribunal and was able to win his case, but as a result of his experience and the difficulty with finding a new place, he’s moved back to Wellington.
Investment Portfolio Management was the property management firm in both situations. Charlotte Clarke, acting general manager, says the company manages over 500 properties and is always inundated with applications for their properties. She says given the complexity of the industry, it’s not unexpected that mistakes happen from time to time.
“The fact of the matter is that no property manager or property management company is perfect, and there’s always going to be times where we fall short,” she says.
“We’re no stranger to court, but to pick out some individual court orders or tribunal hearings amongst a bunch where we may have fallen short is not really fair. Everybody makes mistakes, I know the ones you’ve pulled out are ones where we’ve lost cases, or there has been some issue. But the fact is, that’s what the tribunal is there for, to make comment and rulings around how things are done – and sometimes we lose.”
Tenancy issues on the rise
But according to a number of social service and advocacy organisations, these two cases are not isolated situations, as they’ve seen a marked increase in those seeking help with housing issues this year.
Auckland Action Against Poverty’s Brooke Fiafia says her service has gone from seeing up to one to two clients a week, to multiple people a day requiring assistance with accommodation.
“We’ve had lots of people, due to Covid, who have lost their jobs and they’re freaked out about falling behind in rent, but their landlords just don’t care as they just want to get paid,” she says.
She believes the full extent of the problem is being masked by people’s reluctance to speak up, knowing there is a lack of alternatives.
“People do avoid complaining, because it’s a roof over their heads and because they know they don’t have any other choice,” she says.
Māngere-based social worker Alastair Russell is seeing similar issues with his clients. He works for ME Family Services, which supports children and their families at 16 schools in the area.
“Housing is a major issue for the families who come to us, whether they need housing or are facing homelessness or overcrowding. It is a significant amount of our work,” he says.
“We’ve had a situation where we’ve helped a family get an oven, despite them living in the property for many years and never having a functioning oven that whole time. We’ve also had situations where landlords won’t do basic maintenance. But we also find a lot of people just want to stay quiet — out of fear — because they’re scared of what the landlords will do. They’re obviously scared of homelessness and so they’re reluctant to speak out and challenge landlords with what they are doing.”
He sees many families living in garages or in highly crowded situations and, as a result, children are struggling with significant health issues, which impacts their learning at school.
Manukau Ward councillor Alf Filipaina believes things could get even worse given the area now has an average sale price of over $1 million.
“Once valuations go up, rates go up and so landlords will want to cover the extra payments they have through raising rents. But if they put up rents by too much, our renters will be asking themselves what’s more important, ‘our rent or putting food on the table?’, and some will end up saying rent is more important, which means that there’s no food on the table and it puts pressure on everything else.”
Regulating property managers
Newly minted Labour MP for Manurewa Arena Williams believes the answer is more stringent regulations on the rental market.
“There are a lot of issues related to people not knowing their tenancy rights,” she says. “I had a case recently where someone was evicted with seven days’ notice, and in that situation, we can’t do anything for her other than refer her to a community law centre. But at a policy level we can be thinking about how we regulate things so tenants are able to trust the advice of a property manager. Tenants are in a unique situation where they are reliant on property managers for good and fair advice, and perhaps there are duties there that should be owed to these tenants [by these landlords and property managers].”
The incoming government has made a pre-election promise to review the regulation of property managers and bring in a code of conduct and minimum training requirements for managers.
Real Estate Institute of New Zealand (REINZ) currently has over a thousand property managers signed up to their code of conduct and its chief executive Bindi Norwell says the government needs to ensure the industry in New Zealand raises its game to meet international standards.
“We’re one of the only countries in the OECD that doesn’t have this,” she says of a code of conduct.
“At the moment you have ones who are doing a great job and then there are those that don’t do the right thing and they are undermining the whole reputation of the industry.
“They can get away with a lot, to a certain extent, because you can’t stop them from operating. At the moment you can just pay off a fine, but if you were to have your licence taken off you, you lose your ability to generate revenue.
“So we look forward to working with the government to making some changes on this.”
AAAP’s Brooke Fiafia agrees that greater controls on property managers and landlords is the only way to go.
“We’re not regulating the market in a way to ensure everyone can access safe and affordable housing, “ she says.
“I know people talk about the government building more affordable housing, but people can’t even afford the affordable houses, as it’s only affordable for middle income earners. Leaving it up to the market to provide for these things is not working. People shouldn’t have to be paying so much for safe and healthy homes, which we believe is a human right.”