Handling difficult phone calls like a Jujitsu worrier!

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I often find myself talking to a tenant over the phone who has become defensive and offended about rent arrears, or the repairs they have not done. This can go two ways. A screaming match where no one wins, and the situation worsens. Or you stay in control of the conversation and work towards a solution. Through doing this on a daily basis over 5 years, I have a basic tool kit to disarm an angry tenant and work towards a solution.

Here are a few things I say when the conversation heats up.

If you find that the tenant is butting heads with you, over rent arrears. Here is what I say “John, we are beginning to but-heads on this issue. We are not going to solve anything this way, lets sit side by side and work through this together to find a solution. I value your tenancy and I am sure we can work out a weekly payment plan that will suit us both.

If the tenant “John” continues to push your buttons. This happens to me when tenants call me names over the phone. The best way I have deflected this is to pretend I did not hear him, and reply with the following “pardon?,… pardon?…. Sorry my phone seems to be playing up. Lets get back on track and work on a solution”. Usually the tenant will take this opportunity to pretend he did not just call me names and save face. This usually works a treat and things defuse from here.

Whatever you do, don’t let them get the better of you. End the conversation before you loose your cool. What I say is “John, this conversation is no longer constructive. I am ending it now, we can continue this in person in the office tomorrow if you like” Usually conversations in person a much more civil and can be mediated by a third party.

Insulation and Smoke Alarms

Kiwi houses need to be warm, especially for family’s in low income areas. Initially, the government encouraged landlords to install insulation by offering an 80% subsidy. The owners who took advantage of this were the early adaptors. Now the govt. have reduced the subsidy to 50% and set a deadline for the 1st of July 2019. So the landlords who have not done it yet get a smaller carrot, and a bigger stick to get insulation installed. We don’t know yet if there will be a penalty for missing the deadline for the late adaptors, and I don’t know how the govt. will be able to monitor this.

The govt. have also made it a requirement to state in all new tenancy agreements the level of insulation in the house. If it is insulated, you will need to state to what R rating and whether it’s in the floor, ceiling and/or walls. R ratings differ in the south Island and the North Island. Here’s a tip for insulating: Swap all your down lights for LED bulbs. LED bulbs do not heat up, so you can lay insulation right over them for better coverage.

If the property is not insulated, you will need to state in the tenancy agreement what you plan to do about getting it done. I have sent several quote requests through to Green Star Energy Solutions since the 1st of July  to find out if my houses are insulated, as its never been something I have looked at as a property manager. I sign up between 6 to 12 tenancies a month, each new tenancy agreement will need this new information for each house. Its a lot of extra work.

There are services out there like Green Star Energy Solutions, who will asses the level of insulation in your house and supply a quote for insulation if required. They can also install HRV, Heat-pumps and smoke alarms. Their company is experiencing rapid growth in light of these changes.

Lastly, photoelectric smoke alarms need to be installed within 3 meters of each bedroom. If you have a 3 bedroom house, with the bedrooms located down a hallway. You will need one smoke alarm in the hallway located within 3 meters of each of the bedrooms. If there is a bedroom by the garage, then another smoke alarm needs to be installed within 3 meters of that bedroom. Do yourself a favor and get smoke alarms with a 10 year battery, so you don’t have to worry about tenants failing to change batteries every year.

Managing a Positive Meth Test

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I’ve had three houses come back with positive tests for meth contamination over a two week period. If you manage your own property and work full time, this will be tough for you to manage and deal with in terms of stress. I’ll explain what I had to do to manage this situation. For two if these cases the properties had existing tenants at the time whom had to be vacated immediately. Under the Residential Tenancies Act, the landlord can serve a 7 day notice to terminate a tenancy if the property is uninhabitable. I’ve used this notice in the case of fire, flooding and now in this instance meth contamination. The way this meth problem is escalating in New Zealand will mean there will be a lot more of these cases coming up, and landlords will need to tread carefully, so educate your self as best you can and get someone with experience to help you along the way.

A positive test and insurance

Once you get a positive meth test. The next step is to contact the building insurer and lodge a claim for meth contamination. The policy holder will be claiming for loss of rent while the property is being further tested and decontaminated. Before a final test is done to prove the house is clean. The policy holder will also be claiming for the cost of the full test which can range from $1000 to $2000. This is because all the rooms need to be thoroughly tested using multiple kits, each testing kit is about $175 including the lab test. Then decontamination can cost from $5000 to $50,000 depending on how bad the contamination is. This may involve a thorough cleaning, or the cost can include completely stripping rooms of the wall boards and replacing them. Also plumbing may need to be stripped and replaced in the case of manufacture, where chemicals have been flushed down sinks.

While the insurance company work with the policy holder on the claim, they will need all the inspection reports done to suit the terms and conditions of the insurer. Some insurers want inspections done every 3, 4 or 6 months. Depending on which insurer it is. They will also want the tenancy agreement and the tenant application form. From my experience, the insurer will arrange the next test to be done. Which will indicate exactly how contaminated the property is before they indicate any cover for the policy holder.

Managing the tenant

The other risk you will have to deal with is the tenant. If the house has been let to a tenant whom then complains about health problems and gets a test done to find the property is contaminated. The landlord is potentially open to the tenant claiming for a full refund of rent paid during the term of the tenancy, and also replacement cost of any cross-contaminated items of the tenants. Not to mention moving costs and health checks. To manage this risk, get the property tested before any new tenancy starts. Its better for the landlord to do the testing, as they keep control of the situation, however bad it is, it could be worse if unexpected.

In two cases I have had as a property manager. I suspected the tenants were at least using meth in the property. The test was done and the properties were highly contaminated. I suspect the tenants caused the meth contamination in these cases. Both houses were severely contaminated to levels that indicated manufacture of meth. The tenants guilt was clear in their facial expressions and behavior upon receiving notice that the tests were being done, and also when they got the 7 days notice to vacate the property due to it being uninhabitable. The moved out without any hassle. In hindsight I would have managed this differently, which I will outline in my ebook coming out soon. So back to these tenants. We did not have any substantial and/or undeniable evidence that they did cause the contamination, so we have had to manage this situation very delicately. The tenants in this case vacated and went back to live with family while the owner was stuck with the problem. Without a baseline test done before the tenancy starts, and no proof of drug use or manufacture, we cant prove these tenants were responsible.

Another case I managed, involved taking over a new management from a previous property management company. Its always a good idea to get a brief on what the previous tenants were like. When I took over, the house was clean, empty and ready to re-let. I discussed with the owner the option to get a base line test done while it was vacant, to which she did not decide on until the last minute. I secured tenants to move in, and then the owner decided to get a test done. By that time the tenants were ready to move in. By the time the results came in as being positive for meth, at levels well above the MOH guidelines, the tenants had been in the house for 4 days. I then had to serve them the 7 days notice to terminate the tenancy due to the property being uninhabitable. These tenants were not happy. We ended up paying for their moving costs and to have 4 of their household items tested for cross contamination. We also offered them alternative rentals that were available. This landlord is now dealing with insurance and going through the decontamination process.

There are more tips around this situation in my ebook, “Manage your own property and save $1000’s on fees” where I give more tips on when you should do a meth test and how to manage the tenants. Follow my blog to know when the ebook will be available.

Frequently Asked Questions

Q. How often can I increase the rent?

A. Every six months with a 60 day notice of rent increase.

Q. How much notice must be given to a tenant before inspection of the property.

A. 48 hours. Make sure its communicated to the tenants and documented for future reference.

Q. How much notice must be given for access to make repairs.

A. 24 Hours. Make sure its communicated to the tenants and documented for future reference.

Q. Do tenants pay the total water bill?

A. The tenants only pay for metered charges. The owner will pay for fixed monthly charges which are outlined in each monthly water bill.

Q. How much bond can I charge?

A. 4 weeks is the maximum legally allowed. If there is a dog, I will also get one weeks rent as a pet bond.

Q. How much notice must a tenant give before they can vacate.

A. 21 days.

Q. How much notice must a landlord give to terminate a tenancy?

A. 90 days notice. or 42 days notice if the owner, or family member wants to move in.