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30-12-2010

Landlord "screwed" by HNZ

Landlords.co.nz

Auckland property investor Ian Crayton is emphatic about the treatment he says he and other landlords have received from HNZ after signing up to its Home Leasing scheme.

"They've screwed us," Crayton said.

"I'm frankly pretty upset by the way we are treated by these people."

The HNZ scheme promised landlords market rate rent payments minus a 8-10% property management fee and "guaranteed rent 52 weeks a year."

Crayton said his main grievance relates to the fact HNZ - which signed up landlords to 10 year lease agreements - fails to conduct yearly rent reviews and is often paying them less than the market rents promised.

He said if he'd opted for a private sector arrangement with a letting agent instead "I could get $100 a week extra for my properties."

"Rental reviews done by HNZ's self-nominated valuers seem to artificially under value the rents to the tenants' advantage."

Crayton has since set up a Facebook page (Housing NZ Owners Landlords) after contacting fellow landlords involved in the scheme.

On the Facebook page he also said the management fee in return for continuous occupancy is unnecessary given the current shortage of rental properties and HNZ shows too much bias in favour of tenants.

"I can tell you that all my other properties (let through commercial letting agencies) have pretty much 100%occupancy so the additional 5% we are paying gets us absolutely nothing."

"For this management fee we should reasonably expect HNZ to represent us with the tenants. In fact it works the other way round and they represent the tenants' interests to us. For example obvious damage to a brand new kitchen is charged to me as wear and tear. I then have to employ someone else to represent me with HNZ to prove the damage was done by the tenant."

He was able to email the landlords after HNZ inadvertently sent out a group email to more than 500 landlords containing each other's email addresses.

Crayton then contacted the landlords on the email list to ask if any others has experienced problems and received dozens of responses.

In his email he complained that rents from HNZ were artificially low and there were no means to challenge reviews by a valuer they had lost confidence in.

He said one of his properties, which has four bedrooms, two bathrooms and was 190 sq ft, was valued at just $5 a week more than a nearby apartment.

"I'm not getting annual rent reviews, when they are done they're not done fairly," he said.

He told fellow landlords "We'd all be much better off using a commercial letting agent to manage our properties. They would charge us 7.5%, they would deal with all the damage and repair issues for us at cost, and would automatically act in our interest [not automatically the tenants]. After all we are paying!"

Another issue Crayton believes HNZ is short-changing landlords on is water rates. He said landlords have to pay the water rates on their properties and most are unaware of a rate cap that means they can claim back money spent over $500.

Crayton said he first raised his concerns with HNZ 10 months ago and has yet to receive any reply.

He said he simply wanted HNZ to fulfill the promised role and "do as much for the owner as an ordinary letting agent."

He believes HNZ is poorly managed and has called on other disgruntled landlords to contact his Facebook site and write to Housing Minister Phil Heatley and their local MP.

He also believes grounds exist for a class action lawsuit over the lack of annual rent reviews.

"We need something to be done," he said.

"HNZ is currently advertising for more owners. It is out duty to warn others away from this disastrous ‘investment' with a bureaucratic and all-powerful body whose aim is to squeeze the life out of the owners with low rents to save the government money subsidizing these rents for HNZ tenants."

Tags: ian crayton - hnz - phil heatley

Source: Landlords.co.nz

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