What can happen when you fail to lodge a tenants bond?
The importance of lodging a tenant’s Bond money has been demonstrated by a new Tenancy Tribunal ruling which has handed out one of the largest fines yet for a Landlord in New Zealand. An Auckland based Property Manager, who manages around 100 properties, has been ordered to pay a total of $177,720.56 by the Tenancy Tribunal for deliberately, and knowingly, failing to lodge tenancy Bonds. This total amount ordered to be paid includes the Bond money which she is required to lodge immediately, a fine for close to $50,000 for committing an unlawful act, plus Tribunal and application costs.
It was MBIE’s Tenancy Compliance and Investigations Team (TCIT) who took 197 separate complaints to the Tenancy Tribunal against this landlord. TCIT focus on significant or ongoing breaches of the Residential Tenancies Act (RTA) which pose a significant risk to vulnerable tenants.
After the ruling, Steve Watson, who is the Housing and Tenancy Services acting General Manager said; “trust is a key component in the relationship between a Landlord and a Tenant, and for a Landlord to breach that trust on a scale such as this is unacceptable”. But not only is trust a key component between the Landlord and Tenant, but also between the Property Owner and Property Manager. Engaging a Property Manager means that this should all have been taken care of for the Property Owner but, in this case, it did not happen. This is a real concern for the industry and really highlights that not all Property Management companies are the same.
If a Landlord charges a Bond, there is a legal requirement to lodge it within 23 working days of the payment being received. There is also a Bond Lodgement Form that needs to be completed to accurately record details about the tenancy, the Landlord and all the Tenants. It is then signed by both the Landlord and Tenant and submitted to the Bond Centre. Lodging a Bond is not a difficult thing to do, so there really is no excuse, and with the move towards allowing people to lodge individual Bonds online, Tenancy Services is making it even easier.
The Tenancy Compliance and Investigations Team have said they will continue to focus on identifying Landlords who systemically breach the RTA. This is great to hear and what is needed for the industry.
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