ANALYSIS: Being a landlord isn’t always easy. Right now, maintenance and insurance costs are rising, rents are falling, and good tenants are hard to find. The sector overall isn't viewed with any warmth, but frankly, the actions of some landlords make it hard to combat the negativity.
These are the investors who operate in that grey area between what’s legal and what’s ethical.
As a landlord and co-owner of a property management company, I’ve seen the good, the bad, and the downright ugly. In my view, landlords who do any of the following should be brought to book.
1. Charging tenants full rent while they have to make do with living on a building site
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I recently heard a case study of a tenant who’s renting a property in Wellington. It’s got a great view of the water and is a beautiful home. The landlord wanted to replace the roof and repaint the house. That’s usually a good thing, but in order to carry out the repair work, the landlord has erected a lot of scaffolding, blocking the view.
That might not be an issue on its own. In normal circumstances, the tenant would benefit from the improvements made to the house, but in this case, the landlord is only fixing the property so they can move into it themselves in a month or two.
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The tenant has to put up with living in what is essentially a building site, and they won’t get to enjoy the improvements. Worse still, the landlord hasn't offered to lower the rent. This is legal, but it’s taking advantage of your tenants.
2. Using bonds to push tenants around
Some landlords use bond refunds to put pressure on tenants. Holding back money for cleaning or minor damage is normal. But sometimes this goes too far.
Over a decade ago, I rented a small apartment near the University of Auckland. I was 19, renting my first place. When I moved out, I’d done everything right – cleaned, packed, handed back the keys. But then I got the call: “We’re keeping part of your bond.”
Opes Partners economist Ed McKnight: "Unscrupulous landlords know the tribunal process is lengthy, and that tenants often need their money back quickly." Photo / Fiona Goodall
I needed that money for my next place, and I learned the hard way how some landlords use bonds to hold tenants to ransom.
The property manager told me that when I left, the power company had shut the electricity off. That caused the ice in the freezer to melt, and some of it went on the carpet.
The landlord said I needed to pay for cleaning, arguing that I should have put a container underneath to catch the water.
I needed the money, so in the end, we split the cost. Looking back now, I should have taken my grievance to the Tenancy Tribunal. But unscrupulous landlords know the tribunal process is lengthy, and that tenants often need their money back quickly.
3. Racism by another name
Under the new privacy guidelines, there’s only so much information a property manager can share with the landlord about potential tenants. Sadly, I’ve seen cases where a landlord has refused tenants because of their names.
Some landlords see a name and assume it tells them everything – how someone cooks, how they’ll treat the place, and how their "fragrant cooking" could damage their house. It’s nonsense. Worse, it’s racism, hiding behind weak excuses.
I’m calling this out because the "fragrant cooking" excuse is used all too often by bad landlords. There’s no grey area. It’s not right.
The overwhelming majority of property investors I meet want to do the right thing. But, there will always be a small minority in any group who do the wrong thing. If you’re a landlord who wants to play fair – and most do – then don’t just avoid bad practices. Call them out. Raise the bar for the industry. That’s how we change the narrative.
- Ed McKnight is the economist at property investment company Opes Partners