'KFC test' of prospective tenants another reason for regulation, says REINZ

Name: Focus: Landlords and property managers demand to see bank statements
Uploaded: 2018-08-08T13:50:19+12:00
Duration: 170 s
Description: As the pressures on the rental market increases with about a third of all Kiwis now renting, landlords and property managers are seeking further proof that potential tenants can cough up the rent.

NZ Herald

8 Aug, 2018 02:59 AM2 mins to read

As the pressures on the rental market increases with about a third of all Kiwis now renting, landlords and property managers are seeking further proof that potential tenants can cough up the rent.

Property managers vetting bank statements for tenants' fast food spend is another reason why the industry should be regulated, says The Real Estate Institute of New Zealand (REINZ)

Bindi Norwell, chief executive at REINZ, said consistent standards were needed to ensure that the industry and consumers have adequate protections.

"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," Norwell said.

"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."

Norwell said 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.

"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," Norwell said.

"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'."

New Zealand First MP Darroch Ball has labelled the practice of asking for bank statements a "gross invasion of privacy", while Consumer NZ called it "very concerning" and "unethical".