One of the best parts of my job is travelling around the country talking to property investor associations. It’s great to meet people, find out what’s happening in their area, hear their concerns and update them on the work being done on their behalf by the Federation.

The mood around the country is subdued, with many areas having more rentals than tenants and landlords having to drop rents. Lots of factors affect the rental market, but is it just a coincidence that rents are dropping now that interest deductibility and 90-day no-stated-cause terminations are back?

No-one’s grizzling, this is business, and we’re used to dealing with ups and downs. I love how investors are still looking for that next deal that is going to give them a good return or the opportunity to add value or both. You’re an optimistic, innovative bunch.

One thing that is consistently worrying investors, though, is pets. There’s a lack of detail about the pet rules coming into force later this year, a lack of clarity that’s creating uncertainty, which is never good. I’ll try to help with that.

Pet rules

The new pet rules are due to come into force later this year, once the arrangements for taking pet bonds have been put in place. Think October/November. So do your prep now.

Some landlords have already been asked by tenants if they can have a pet, thinking the changes were in effect. They’re not, so you don’t have to grant a pet request, and you must not take a pet bond. Here’s a fishhook – you can’t add a pet bond to an existing tenancy after the changes come into effect. If you agree to a pet now, you can’t charge a bond for it later.

Once the new law comes into effect there will be a presumption that a tenant can keep a pet or pets unless a landlord has “reasonable” grounds not to allow them.

However, that presumption doesn’t mean they can just turn up with a pet without telling you. There must be written consent to keep a pet, either in the tenancy agreement or a separate document. If you do not allow a pet, the document must state the reasons why.

Existing tenants may put in a request to have pet. You’ll have 21 days to respond, in writing. The response needs to include your decision, any conditions you may have on keeping a pet and – if you refuse to allow a pet – the grounds for refusal.

The act gives some examples of what reasonable grounds for refusal might be, or reasonable conditions for keeping a pet, but these aren’t exhaustive, and I suspect that what’s “reasonable” will be subject to some debate and a few tenancy tribunal hearings.

Reasonable grounds for excluding pets include:

• the property isn’t suitable (size, fencing, or “other unique features”)
• a rule or bylaw prohibits pets – I believe this includes body corporate rules
• the tenant has previously not complied with relevant by-laws relating to the pet or type of pet
• the number of pets
• the size or type of pet
• the pet causing damage or being disruptive
• a dog that has been classified as dangerous or menacing under the Dog Control Act or if you have reason to believe it has attacked people, pets or livestock previously
• the tenant has not agreed to a reasonable condition for keeping a pet
• the tenant previously failed to comply with a reasonable condition relating to keeping a pet.

You’ll note that some conditions are general in that they apply to the property in relation to keeping pets, and others are specific to the pet, type of pet or the tenant.

Reasonable conditions you may set if you consent to pets include:

• that the tenant pays a pet bond (up to two weeks rent)
• that pets are restrained while a landlord enters the property
• if a pet is allowed inside the house, you can include a condition requiring carpets to be cleaned to a professional standard at the end of the tenancy. Note the “professional standard” wording – you can’t require that the carpets are professionally cleaned.

These are good examples, but they don’t cover every possibility and how landlords apply them may differ, so that’s where the reasonable test may come in and cause trouble. If you and your tenant can’t agree on what’s reasonable the decision may be made for you by a Tenancy Tribunal adjudicator. To make life easier I suggest using one of the examples above if you are refusing consent or setting conditions unless you have no other choice.

What is a pet?

Lots of people have asked me “what’s a pet”, worried they’re going to end up with a horse or a goat! A pet isn’t defined in the act, but most cases should be covered by the tests in the act. Clearly an apartment isn’t large enough for a horse, and few city places would be suitable for a goat (though I do have a goat story to share from my Auckland flatting days – ask me next time you see me).

An annoying rooster or other screeching bird would come under the “being disruptive” condition above, and possibly under a local by-law. What I’m saying is don’t worry about this bit so much, the pet rules are mostly intended for people with cats and dogs.

There are also changes in the act that deal with damage, but this article is long enough and that discussion will have to wait for a future date.

I hope this has been useful. To keep across this and other important topics, sign up for our weekly newsletter at nzpif.co.nz/#mailinglist.