Property management industry should be regulated

8 August 2018
For immediate release

REINZ says “KFC test” another reason property management industry should be regulated

With stories emerging around the country that property managers are now asking prospective tenants for bank statements as part of their credit check processes, the Real Estate Institute of New Zealand (REINZ) is again calling for some clear guidance for the property management industry.

New Zealand First MP, Darroch Ball, has allegedly said he was stunned by the "outrageous" admission and called asking for bank statements a "gross invasion of privacy". Similarly, Consumer NZ has said it has received complaints about the practice and said it was "very concerning" and "unethical".

Bindi Norwell, Chief Executive at REINZ says: “The government appears supportive of property managers asking prospective tenants for bank statements as the Ministry of Social Development website* actually says to prospective tenants ‘If you're in paid work, ask your employer to give you a letter stating that you’re employed in a permanent or long-term job. Or, you could show your landlord your bank statement with regular income’.

“It’s important that property managers carry out due diligence on behalf of their clients (landlords), but the focus needs to be around ascertaining whether a tenant has stable employment and can pay the rent, not whether they spend their disposable income on KFC or Uber Eats. Therefore, it’s essential that discussions are had urgently around appropriate methods for undertaking a credit check whether it be an employer reference, bank statement or a pay slip. That needs to be regulated by the government and then communicated to the industry so that there is a consistent standard across the country,” continues Norwell.

“The issue of credit checks is just another matter to add to the significant list of reasons that REINZ has been calling for property managers to be regulated for a number of years now. While there are many amazing property managers out there, unfortunately their high standards are being undermined by a lack of regulations and also by a small group who don’t have the same ethics,” continues Norwell.

“We need consistent standards to help ensure that the industry and consumers have adequate protections and clarity in place so that we don’t have some tenants living in unsatisfactory conditions, that there are consumer protections in place around holding money in a trust account, that property managers have the appropriate insurance in place to operate in the industry, have a dispute resolution process in place and ensure that regulatory compliance is being adhered to alongside operating under an industry-wide recognised qualification,” concludes Norwell.

ENDS

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