New Zealand houses

Fixing the rental market

Our investigation finds many renters are getting a raw deal. But property managers deserve a bigger share of the blame for problems.

We surveyed renters about the main issues they’re facing and identify 4 law changes that should be made to protect them.

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Alison rented her Christchurch flat for a year until she couldn’t stand the cold and damp any longer. There was mould growing on the ceilings and the flat was freezing, especially at night.

“I would often wake up at 2 or 3am because it was so cold,” she says. Her bed was piled with puffer jackets and sleeping bags in an effort to keep warm. The flat had a heat pump, but it didn’t work and it took several months for the property manager to get it fixed. Requests for other maintenance were often ignored.

Like Alison, more consumers are now stuck in the rental market as escalating prices make home ownership a dream. It’s no secret the quality of rental properties can leave a lot to be desired. But our survey found there’s a much higher chance you’ll get a bad deal if you rent through a property management company.

Key problems

The experience of tenants in today’s rental market varies hugely. A lucky 4 out of 10 renters in our survey reported living in quality digs that were warm and cosy. A similar number thought they were getting great value from their landlord.

On the other side of the street, it was a different story. Twenty-nine percent said their rental didn’t have good heating or insulation. Nearly as many (28%) reported doors or windows that didn’t close properly. A quarter said the property had mould that was difficult to remove or reappeared.

Renants who rented through a property manager were much more likely to report their home lacked adequate heating and had mould that was hard to remove.
Renants who rented through a property manager were much more likely to report their home lacked adequate heating and had mould that was hard to remove.

About 1 in 4 also reported their landlord had turned up unannounced, a breach of tenancy legislation. Close to 1 in 10 said they’d been charged unexpected fees during the tenancy and 6% hadn’t been given required notice of a rent increase.

Problems were significantly more likely to be reported by consumers who dealt with a property manager rather than a private landlord. Property management companies have been growing rapidly. Estimates suggest about 40% of rentals are in their hands.

We’ve previously reported on problems in this industry, which has attracted complaints from both renters and landlords for sub-par service and failing to get to grips with the basics of tenancy law. But it’s so far escaped regulation. Anyone can set up shop as a property manager, no qualifications required.

Our survey found tenants who rented through a property manager were much more likely to report their home lacked adequate heating and had mould that was hard to remove.

Tenants also reported property managers were more likely to delay getting repairs done. Forty-two percent said they’d made requests for repairs but were kept waiting for a response.

Just 35% rated their property manager’s service highly. In comparison, 54% of those with a private landlord were happy with the service.

Fear of repercussions

Tenants dealing with a property manager were also more likely to worry about the repercussions of making a complaint, fearing they’d be evicted or their rent would increase.

Across all renters, a significant proportion (35%) said they’d held off complaining about problems either because they thought their request would be rejected or they worried there would be comeback. Of those, 39% thought they’d get a bad reference while 37% worried their rent would increase.

Almost a third said they’d put off making a complaint because they thought they’d be given notice. One in 5 worried their lease wouldn’t be renewed.

Tenancy rules make it easy for this to happen. Periodic tenancies can be terminated by the landlord without reason with 3 months’ notice. Fixed-term agreements, which are favoured by property managers, expire at the end of the term with no automatic right to renew.

There’s often little room to negotiate the length of a tenancy: if you want the property, you have to take it on the terms offered or try your luck elsewhere. More than half of those who rented through a property management company had a fixed-term agreement of 12 months or less. Only 1% had leases longer than 2 years.

One in 5 renters were unsure where to go for help if they were being treated unfairly by their landlord. Among those who dealt with a property manager, only a third were confident they could easily find help if they struck problems with the company.

Fixing the market

Without changes to tenancy law, the problems identified in our survey are likely to grow as more consumers are locked out of home ownership.

The government has announced plans to set minimum standards for rentals. Regulations setting requirements for heating and moisture control are expected from July 2019.

Housing minister Phil Twyford has also announced a review of the Residential Tenancies Act, which has been largely untouched since 1986.

Based on our investigation, we’ve identified 4 changes that must be included in any law reform to ensure adequate protection for renters.

1. Regulate property managers.

Our survey provides further evidence that voluntary self-regulation of property managers isn’t working. Plans to include the industry in rules covering real estate agents were shelved by the last government. It’s time to dust off these proposals.

Regulation of this industry will also benefit landlords who put their rentals in the hands of property managers.

2. Improve security of tenure.

Renters’ fear of losing their home is one of the reasons why many don’t complain about problems. To protect tenants, legislation needs to limit the circumstances in which landlords can end tenancies without cause.

3. Blacklist unfair terms and fees.

Nearly 1 in 10 renters report being charged extra fees by their landlord or property manager. We’ve found these fees are often not disclosed upfront and are charged unfairly. We want tenancy legislation to include a blacklist of unfair terms and fees to make the rules clear.

4. Create an advocacy service for tenants.

In the landlord-tenant relationship, tenants are in a weaker bargaining position. We recommend establishing an advocacy service to help renters enforce their rights. Advocates would support tenants to get problems fixed and make sure landlords don’t ignore their obligations.

Knowing there was someone to support them would help give renters the confidence to speak out about problems.

Survey findings

Main reason for renting[width=40%] [bar][width=60%]
I can’t afford to buy a house where I live 64%
It suits my lifestyle right now 26%
I like the flexibility of renting 5%
It’s cheaper than paying a mortgage 5%

Top problems reported at rental properties [width=40%] [bar][width=60%]
Pests 34%
Insufficient heating or insulation 29%
Doors or windows that don’t close properly 28%
Mould that’s difficult to remove or reappears 26%
Water leaks 26%
Appliance that doesn’t work properly 17%
Locks that don’t work 14%

Problems reported with landlord or property manager [width=40%] [bar][width=60%]
Promised repairs not being done 35%
Not getting a response to requests for repairs 34%
Landlord or property manager visiting unannounced 23%
Inspections arranged at inconvenient times 23%
Misinformation provided about the property 16%
Dispute about bond refund 15%
Charged unexpected fees 8%
Not getting required notice of rent increase 6%
Charged a fee to end a fixed-term tenancy early 6%

Why people don’t complain [width=40%] [bar][width=60%]
Thought the request would be rejected 41%
Concerned about getting a bad reference 39%
Concerned rent would increase 37%
Concerned it would result in eviction 30%
Concerned they’d have to pay for required repairs 27%
Concerned the lease wouldn’t be renewed 19%

Satisfaction

Value for money [width=40%] [bar][width=60%]
Property management companies 32%
Private landlords 51%
AVERAGE 44%

Service provided [width=40%] [bar][width=60%]
Property management companies 35%
Private landlords 54%
AVERAGE 47%

Condition of the property [width=40%] [bar][width=60%]
Property management companies 36%
Private landlords 51%
AVERAGE 46%

GUIDE TO THE TABLES OUR DATA are from a nationwide survey of 1062 consumers who rent their home. The survey was carried out online between December 2017 and February 2018. Satisfaction scores show the percentage of respondents who provided a rating of 8, 9 or 10 on a scale from 0 (very dissatisfied) to 10 (very satisfied).

Key facts


32% of households rent, up from 23% in 1991.


Last year, rent increased by 2.3% and was a major contributor to the annual increase in the Consumer Price Index.


Compared with homeowners, renters are more likely to be putting up with cold, damp housing. Just under half of renters report their home has problems with dampness or mould, compared with about a quarter of homeowners.


37% of tenants in our survey rented through a property management company or real estate agency, 59% rented through a private landlord.


38% had been renting for 10 years or more, 18% had been tenants for 6 to 10 years.


33% had a rent increase in the past year, 17% had seen their rent increased 2 or more times.


45% had periodic tenancy agreements, 41% had fixed-term agreements.


54% of tenants who rented through a property manager were on short-term leases of 12 months or less.

You say ...

My home is super-hot in summer and super-cold in winter. To get insulation they would have to take the roof off. So it's not getting done. And they have said no to getting a heat pump. My health is not good and I just feel stuck. I can’t afford to shift so have to put up with these things.


When I viewed the place (before agreeing to rent), I was promised it would be cleaned and the stove fixed. When I moved in, neither was done, and I found broken and missing window catches. They did not tell me that it was uninsulated until after I moved in.


When dealing with landlords directly I’ve never had any major issues as a renter. My issues and problems have always arisen where property managers have been involved. They book inconvenient viewings and things take longer to be fixed.


Have been promised a heat pump every year for the 4 years and still haven’t got it. The landlord did get free insulation because I have a health condition.


My previous tenancy ended because my landlord would come over unannounced at least 4 times a week. I would tell her all the time that what she was doing was illegal and she has to give me notice. She told me if I don’t like it I can move. So I did.


I am currently with a private landlord and it is great. My last rental house was with a real estate company and it was absolutely horrible for me and my family, living in a damp, mouldy house [where] the floors were rotting so bad my freezer went through the floor. We battled to get something done about it for nearly a year!

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Share your story

If you’ve had a problem with a landlord or property manager, let us know about your experience. Your stories will help us campaign to make the rental market fair. Email hometruths@consumer.org.nz.