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Real Estate

Buying your own home is a big decision. It’s a commitment you may want to delay until you’re feeling settled in.

There are many different types of housing in New Zealand, ranging from rural ‘lifestyle blocks’ to villas to modern suburban homes and apartments.

Prices for homes in New Zealand are equally varied. Costs also vary within neighbourhoods and it is important to find out as much as possible about an area before you buy.

Take time to look around and become familiar with the market. Buying a home is an important decision and should not be taken lightly. Because of the level of potential risk most home buyers will engage the services of a professional agent, however this is not a legal requirement.

It is difficult to avoid property advertising. Special property features are run in the Wednesday and Saturday editions of most major newspapers. Free publications are available from real estate companies and are often added to many newspapers, and the Real Estate Institute provides national listings at www.realestate.co.nz.

Most houses are sold through real estate agents who operate on a commission that is paid to them by the seller. Agents will make appointments for you to see properties – they will usually also provide transport if you ask them. For your security, agents should be members of the MREINZ.

People who are selling their houses often hold ‘open homes’ at the weekend. This is an opportunity to visit the house and look around.

The mortgage market in New Zealand is highly competitive and it is well worth shopping around for the best deal.

Banks can choose the terms of the loan they offer based on the risk they believe is involved.

All property owners are required to pay rates to their local area authorities, to help fund the civic activities of the area, and the amount of rates for each household is based on property value.

It’s important to make sure your house insurance starts on the day you take possession of the house. In some house auctions, you are responsible for insuring the house as soon as you purchase. In New Zealand, house insurance includes a level of cover for earthquake damage. You should also insure the contents of your house. Your insurance company can organise this for you.

Letting centres
Letting centres are another way to find a property. These centres usually charge a fee for you to look at their listed properties. The fee is generally less than that charged by real estate agents, but it may be charged even if you do not find a home through their lists. If you are referred to a real estate agent by the letting centre, you may also have to pay the real estate agent’s fee.

Types of tenancies
There are two types of tenancies:
Periodic – this is any tenancy that is not for a fixed time, and continues until the landlord or the tenant ends it by giving notice, or the Tenancy Tribunal orders that the tenancy is over. This is the most common form of tenancy. In most circumstances, a tenant can leave this type of tenancy by giving 21 days notice in writing. A landlord needs to give either 42 or 90 days notice.

Fixed-term - these finish on a date recorded in the agreement, and neither the landlord nor the tenant can end the tenancy earlier unless it’s by mutual agreement. It is a good idea to seek advice from the Department of Building and Housing before signing an agreement for these types of tenancies.

Tenancy agreements
Your landlord must provide you with a Tenancy Agreement Form. This sets out the conditions of the lease in plain language. Both you and the landlord sign the agreement and keep a copy. Never sign anything you do not understand. Your landlord cannot include anything in the agreement which is different from the law. If they do, it is unenforceable. See the Living Guide for a detailed account of what information should be included in a tenancy agreement.

Property Inspection Report
A Property Inspection Report is usually included with the tenancy agreement. It is important to record and agree with your landlord not only the furniture and fittings (such as lampshades and curtains) that are provided, but also the condition of the property and any equipment. For instance, if the kitchen bench has a burn mark on it, make sure this is noted in the report so you are not held responsible for it when the tenancy ends. What you will need to pay
When you agree to rent a property, you usually need to pay:
  • a fee to the letting agent if you have used one
  • a bond
  • rent in advance.
You will also need to pay to connect the telephone, electricity and perhaps gas.

Most landlords will require you to pay a bond equivalent to 2 or 4 weeks rent. They cannot ask you for more than 4 weeks rent as bond by law.
Your landlord will give you a Bond Lodgement Form that you and the landlord both need to complete and sign.

The landlord must lodge the form and your payment for your bond with the Department of Building and Housing within 23 working days of receiving them. You and your landlord will then both be sent a receipt.

If you don’t receive this receipt, you should contact the Tenancy Advice office of the Department of Building and Housing. Your bond will be refunded when you leave the property, unless you have rent owing or you have caused any damage. If there is damage, some or all of your bond can be used to pay for the repair.

When you tell your landlord that you’re going to move out, they will inspect the property. You and your landlord then sign a Bond Refund Form, and send it to the Department of Building and Housing, and your bond will be refunded.

If you cannot reach agreement with the landlord over the return of your bond, contact the Tenancy Advice office at the Department of Building and Housing. Paying rent
A landlord cannot require you to pay more than two weeks rent in advance. However, it is possible to make monthly payments if you and your landlord agree.
The landlord must give you a receipt for any rent you pay by either cash or cheque. If you use automatic payments, your bank records act as receipts. Rents are determined by market demand and can vary widely depending on the property. You can check out market rents in your area on the Department of Building and Housing website.

If you think your rent is higher than it should be compared with similar properties, you can apply to the Tenancy Tribunal through the Department of Building and Housing for a market rent assessment.

If the Tribunal orders a lower rent, the landlord must comply with this ruling and also cannot increase the new rent for a period set by the Tribunal (usually six months).

If you have a periodic tenancy, your landlord cannot increase the rent within six months of either the start of the tenancy or the last rent increase. Rents for fixed-term tenancies also cannot be increased more frequently unless the Tenancy Agreement specifically provides for this.

When you rent a house, your rent does not include insurance for you, so it’s important that you take out contents insurance for both your possessions and to cover you for any liability for accidental damage to the property.

The insurance may also pay for you to live somewhere temporarily if there is an accident and the house can’t be lived in. It is your landlord’s responsibility to insure the actual property/building.