With the internet and social media having such vast and instant coverage, we have found that we do not have the need to advertise for prospective tenants in the print media. All our properties are advertised on the following 5 websites, www.trademe.co.nz, www.realestate.co.nz, www.raywhite.co.nz, www.raywhite.com, and www.warkworthpropertyrentals.co.nz. We have a large number of referred prospects who register with us on a daily basis. Our ‘Prospective Tenants List’ is made up of tenants who ‘register’ either by completing the online ‘Tenant Registration form’ or who register in person at our front counter. It is not uncommon for us to have somewhere between (25-30) registered prospective tenants at any one time.
There is no cost to the owners for this advertising!
Having completed the registration form, all prospective new tenants are interviewed at the property viewing, in our offices or, if out of town, over the telephone. At this interview we ask the prospective tenants to supply a valid (preferably photographic) ID and any written rental or workplace references that they may have. We question them about their family and employment circumstances, where they have been living for the last two years, who their landlords were, their reasons for leaving, who else will be living with them, their ability to pay rent, their accommodation preferences and we also cover such topics as pets and smoking habits. From this interview and upon any subsequent enquiries (Credit Checks or Reference Checks) we are able to assess the merits of each prospect and their suitability as a tenant for Managed properties.
Tenant selection is probably the most important aspect of Property Management as both the reliability of rental income and the care and well being of the rental property depend entirely upon getting the right tenants. Unfortunately the rental marketplace does contain a hard core of unreliable tenants who consistently default on their rent payments and who have no respect for other people’s property. Our aim in the selection process is to avoid such unreliable tenants. We are very pedantic in this process as we are aware that getting the right tenant is our best ‘time saving’ device, overall.
We select tenants for our Managed rental properties strictly upon the criterion of merit. We conduct a personal interview, check ID’s, check previous rental and workplace references and carry out a credit check. We are also a contributor and user of the R.E.I.N.Z National Tenancy Database and TPS (Tenancy practice Services). Our policy is to rather have the property vacant for a few weeks than to select a less than ideal tenant. Please note that we do not accept instructions from owners that may contravene the Human Rights Act or any other enactment that could compromise the health, safety or well-being of future tenants.
Showing the Property
Once we have short listed those prospective tenants whom we believe may be suitable for the subject property, we make arrangements, either with the ‘sitting’ tenant or with the owner, to show them through. It is quite common to have a number of prospective tenants viewing the property at any one time. It is our company policy to ensure that prospective tenants have physically viewed the property prior to it being offered to them. This avoids any post possession disappointment and the possibility of litigation for misrepresentation that could be associated with such ‘sight unseen’ tenancies. In order to protect the owner from any such litigation we include a clause in all our Tenancy Agreements which states that the tenant has viewed the property and accepts it purely ‘in reliance on their own judgement’, and not on any statements, promises or undertakings’ made by us or by the owners of the property.
Prospective tenants are asked at the time of their interview to supply written copies of any previous rental and/or workplace references. Quite often, no written references are made available in which case we ask that the contact phone numbers of previous Landlords be supplied so that we can at least obtain a verbal reference. We do make contact with all these referees to ascertain and confirm the information supplied to us by the prospective tenant. Obviously the results of these enquiries goes a long way to establishing the relative merit rating of each prospect.
There are however some situations where no previous rental references are available such as a current home owner who has just sold their property or is on transfer, or a young couple who have never rented before. In the former case we would seek confirmation of the home ownership and in the latter we may well seek the backing of a written guarantor before offering them a property.
Tenancy Information Credit Checks
As part of the Tenant registration process, all prospective tenants are asked to sign an authorization in which they agree to us obtaining both credit and reference checks and for us to provide such information gained to prospective Landlords. Some of this information may well be personal information subject to the Privacy Act 1993 and as such we have an obligation to ensure that the information is used only for the purpose for which it is intended and is not made available to any other party. We do take such obligations very seriously.
The credit checks and background checks we carry out are an important indication of a prospective tenant’s ability to pay their rent regularly and a history of bad debts would undoubtedly diminish their merit rating. We are members of T.I.N.Z (Tenancy Information New Zealand) and TPS (Tenancy Practice Services), who have databases where we can obtain information such as previous addresses, credit defaults, if they have received any 14-day Notices or Breach Notices in previous tenancies and also if they have been to the Tenancy Tribunal and have any orders against them.
Armed with the above information we can then discuss the prospective tenant with the owner of the property, either by phone or via email, and the decision to go ahead is made together.
However, many investor/owners are very happy with this process and have come to trust our judgement and often wish us to go ahead without their input.
The Tenancy Agreement is the formal document that sets up the relationship between the Landlord and the Tenant and spells out the rights and obligations of each party. The Residential Tenancies Act (RTA) requires the Tenancy Agreement to be in writing and a copy must be made available to the tenant. The Act also dictates what minimum information must appear in the contract. We include approximately four pages of extra terms and conditions in all the Tenancy Agreements that we prepare. These are designed to clarify many of the ‘grey’ issues associated with the tenancy and wherever possible protect and indemnify the owner from potential litigation. It is our practice to go through the complete agreement, clause by clause, with the tenant prior to signing.
At the time of signing the Tenancy Agreement with the successful applicant, the tenants are run through a comprehensive induction process where they are informed about their rights and obligations under the Residential Tenancies Act, how our processes as Property Managers work, and our expectations of them as tenants. The tenant is then asked to sign a client acknowledgement form indicating that they understand their rights and obligations as a tenant of Ray White Warkworth. The Tenants are also given our comprehensive ‘Tenant handbook’ which they are able to refer to throughout their tenancy.