Category: Business

Source: Radio New Zealand

Some people are resorting to withdrawing money from their KiwiSaver accounts to clear Buy Now Pay Later (BNPL) debt, financial mentors say, in a new report that indicates recent reforms are not helping consumers.

The report by Consumer NZ and financial mentor network Fincap, with assistance from Victoria University, was released on Wednesday.

BNPL allows people to buy goods or services and pay them off, interest-free, over a set number of weeks. The main providers in New Zealand are Afterpay, Klarna, Zip and Payright.

When payments are missed, late fees are charged.

Before September 2024, BNPL was not subject to consumer credit lending requirements under the Credit Contracts and Consumer Finance Act, because they were not covered by the definition due to not charging interest.

Now, some of the provisions of that act apply, including a requirement that borrowers are given key information about the contracts, and lenders comply with some responsible lending obligations.

But the new research found that all BNPL providers had taken up the option to use credit checks and reporting instead of full affordability assessments on borrowers.

This seemed not to be stopping people from getting into problem debt, it said.

“The fact that BNPL providers must obtain a credit report on new customers and when increasing an existing customer’s spend limit is positive to a degree, in that it means the BNPL provider will have a more informed picture of the customer’s financial position. However, BNPL providers are not legally required to use the information obtained through the credit report to assess whether the customer can afford the loan.”

The report said New Zealand should require affordability assessments for BNPL lending, too.

Report author Victoria Stace noted that the UK and Australia were moving to require more comprehensive affordability assessments. She said that seemed to indicate that affordability assessments would be feasible, and that the current system was not adequate.

BNPL providers remain exempt from a requirement that they not charge unreasonable fees and the report said some still had policies letting them charge “disproportionately high” late payment fees.

The report said BNPL should also have limits on fees.

“The problem with high late payment fees, or multiple late payment fees across purchases, is that they can lead to financial overcommitment/overindebtedness, resulting in consumers borrowing more money to repay BNPL debts or forgoing other essential goods and services.”

The report said “quasi BNPL” such as where a business might offer a payment system for its own goods or services, should be regulated in the same way as traditional BNPL.

“From the consumer’s perspective, the service is the same: they receive a good or service early, must pay instalments and can be charged late fees if they default.”

Stace said the Fincap data showed the number of people presenting with BNPL debt had not gone down since the reforms.

“BNPL is fairly easy to get and it seems to have replaced what we used to have… we used to have payday loans where if people were really desperate for money they could go out and it would be reasonably straightforward to get a high-cost loan from a payday lender.

“We don’t have that facility so much anymore because of the regulation around high-cost lending. It seems that this is the go-to form of credit for people who are struggling to pay for things and it seems relatively easy to get.

“It obviously works well for those who can afford it and pay off their instalments in the requisite timeframe and don’t incur penalties but it doesn’t work well if people who can’t really afford it but can still get access to a BNPL facility.”

Jake Lilley, senior policy adviser at Fincap, said people were still presenting to mentors with BNPL debt and in budget deficit.

The report noted that mentors said BNPL providers were willing to work with people in hardship to match repayments to what they could afford but people were often reluctant to cancel their accounts.

“They’re really worried about how they’ll survive without BNPL,” he said.

“Almost viewing it like an emergency fund or an overdraft … it’s quite a harsh change to get off the treadmill of constantly borrowing for essentials. And so people weren’t opting to take up those hardship arrangements. It’s a really wicked problem… people are taking out KiwiSaver hardship to keep those accounts alive.”

He said people thought of the accounts as something they really needed. “We need to look at how people are responding to it and get smart in terms of protections to make sure we don’t get trapped.”

Mentors said BNPL providers were quick to send loans to debt collection.

The report said they also noted BNPL was sometimes accessed after other loan repayments had become unaffordable because affordability requirements that other lenders were subject to had ruled out other credit options.

Lilley said it was now up to Parliament to give the Financial Markets Authority new responsibilities and powers to be able to action the report’s recommendations.

“While that progresses we also need moves to licence debt collectors at the FMA so we are in a position to monitor the fairness of how unaffordable BNPL loans are collected over the coming years.”

Afterpay has been approached for comment.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Two courier companies found to be involved in cartel behaviour have been ordered to pay more than $1.2 million combined.

Courier service Aramex has been penalised $700,000, while a second company, GoSweetSpot, has been penalised $525,000 in two separate cases of cartel conduct investigated by the Commerce Commission.

The commission said it is also issuing warnings to another nine courier services for behaviour it believes could be considered cartel conduct under the law.

“The freight and courier sector has been an area of ongoing concern and focus for us, with the commission taking five court cases in the last 15 years,” Commerce Commission chair Dr John Small said.

“We expect these penalties and warnings to bring about a change of behaviour in the courier sector.”

Both Aramex and GoSweetSpot earlier admitted to entering into contracts that allocated customers between themselves and a competitor. Aramex also admitted to including fixed prices in its contract. The breaches were separate and the contract agreements were not with one another.

Dr Small said it was vital the courier sector remains highly competitive and free of behind-closed-doors agreements.

“This outcome sends a strong message that it will not be tolerated,” he said.

“Companies engaging in cartel conduct should expect to be on the receiving end of enforcement action.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

A former financial adviser has been convicted and fined $15,000 for breaching a banning order by the financial markets regulator, but investors remain out of pocket.

David McEwen was convicted of four charges of breaching a 2023 Financial Markets Authority stop order at the Auckland District Court.

He left the country in 2023, criminal charges were filed in March 2025, and was sentenced in absentia on Wednesday.

The convictions came after McEwen pleaded guilty in November 2025.

He has also been banned from being a director or promoter, or being involved in the management of a New Zealand company and providing financial advice services for seven years.

His application for a discharge without conviction was dismissed.

The FMA said he breached the stop order in three ways, including offering and issuing financial products relating to an entity McEwen incorporated in Singapore.

It said investors made $173,000 in payments in response to the offers.

What happened to that money remains unclear, as McEwen remains out of the country and out of the FMA’s jurisdiction, with investors losing thousands of dollars.

He also issued units in an investment vehicle called International Opportunities Partnership, which was created after the stop order was made.

The FMA said the units replaced – without investor consent – financial products that investors held relating to other entities associated with McEwen.

In return, he asked investors for an administration fee. The FMA said investors paid $17,000 to McEwen for the fee.

McEwen also offered and issued financial products, and restricted communications, related to a company called Agtech 3, which fell under the stop order.

“We were concerned about the substance of the representations he was making about the offer of the financial products to clients,” FMA head of enforcement Margot Gatland said.

“We focus our enforcement actions on preventing and addressing significant harm to consumers, markets and our financial system,” Gatland said.

“Mr McEwen breached our Stop Order in various ways almost immediately after it was made, after he had left New Zealand.”

McEwen was a business journalist prior to his investment career, and worked for well-known publications, including the Financial Times, National Business Review and Reuters.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Open work visa holders are set to see changes to their visa conditions next month.

An open work visa generally allows people to work for almost any employer, across most sectors and locations, without needing a job offer.

From 20 April, Immigration New Zealand said open work visas would include two new types of employment conditions.

Under the first set of conditions, some open work visa holders, including those on Post Study Work Visas and a range of partner visas, will be able to work for an employer or be self-employed, including as a sole trader or by owning and operating a business.

Under the second set of conditions, open work visa holders on Victims of Domestic Violence Work Visas, Migrant Exploitation Protection Work Visas, Asylum Seeker Work Visas and all working holiday visas will still be required to work for an employer, either under an employment agreement or a contract for services.

The change makes clear that open work visa holders will not be allowed to employ other people, either directly or indirectly through a business they own or operate, including where the business is the named employer.

Peter Elms, director of visas at Immigration New Zealand, said the changes were prompted by sector feedback and were intended to remove uncertainty created by existing work visa settings for both visa holders and immigration advisers.

He said updating and standardising the conditions would provide clearer guidance and reduce the risk of unintentional breaches of the Immigration Act.

“Overall, the changes are intended to help migrants better understand their visa conditions and work rights while they are in New Zealand,” Elms said.

The upcoming changes have been welcomed by immigration lawyers and advisers.

David Cooper, chief executive of New Zealand Immigration Partners, said the update to immigration instructions and policy would remove confusion and close a grey area that had existed previously.

“Particularly for people who held open work visas, whether or not they were allowed to work for themselves was never clear in the immigration instructions,” Cooper said.

“This will now allow them to do it and make it very clear that it’s legal for them to be able to do that.”

Cooper said that while self-employment would not apply to every type of open work visa, it would give eligible visa holders another option beyond finding a job.

“If they do struggle to find a job, they can at least consider setting up their own small business and trying that,” he added.

Sonny Lam, an immigration lawyer at Queen City Law, said clearer guidance could spur a modest lift in the recruitment of non-resident workers.

“The rules become muddled due to frequent changes and create a perception in busy employers’ minds that they can only hire someone on the Accredited Employer Work Visa,” he said.

“With this latest change, it will likely remind employers that they can hire such workers on open work visas again, leading to a slight increase,” he said.

Lam said the restriction preventing open work visa holders from employing others appeared to envisage gig-economy work, such as ride-share driving or delivery services.

This sort of work was a popular way for migrants to generate income and could provide a small boost to the wider economy, he said.

Arunima Dhingra, a senior licensed immigration adviser and chief executive of Aims Global, said clearer rules could reduce risk and improve compliance.

“In recent years there has been increasing confusion around what ‘open’ actually means,” she said.

“Many migrants and employers assume ‘open’ means unrestricted in all respects. At the same time, we have seen growth in contracting, project work and small-scale sole-trading arrangements.

“Those grey areas can create compliance risks if visa holders inadvertently step outside what is permitted.”

Dhingra said that once the rules were explicit, employers could have greater confidence in engaging open work visa holders under appropriate arrangements.

For visa holders, she said, it reduced the risk of unintentionally breaching visa conditions.

Dafydd Parry, a licensed immigration adviser at Greenstone Immigration, said the restriction preventing open work visa holders from employing others could affect some current open work visa holders who are already running businesses that employ staff.

He said transitional arrangements and support would be available for those people until their current visa expires, after which the new rules would apply.

He said the clarification could also help ensure that employment created by temporary visa holders was sustainable and compliant, and that vulnerable workers were protected.

“Allowing temporary visa holders to employ staff could be deemed to create risks,” he said.

“If the visa holder must leave New Zealand, their employees may suddenly lose their jobs,” he said.

“Some cases may raise concerns about exploitation or non-genuine job arrangements.”

Elms said not all migrants were familiar with New Zealand’s employment laws or business obligations, and that allowing self-employment and business ownership while restricting the ability to hire staff helped support safe and compliant work practices.

He said it also reduced the risk of employers unintentionally breaching employment or immigration requirements.

Elms added that the rules also reflected a distinction between activities that signal temporary intent and those that suggest a more permanent footing.

“Running a business that employs others generally indicates a more ongoing and established presence in New Zealand, which is not the intent of a temporary open work visa,” he said.

– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

The owner and developer of the 187-metre 52-storey Seascape development near Auckland’s waterfront has been put into receivership.

Receivers Brendon Gibson and Neale Jackson of Calibre Partners said the immediate priority was to ensure Shundi Customs’s development continues to remain safe and secure.

Shundi has been unable to restart major construction works since it was ceased on-site in August 2024.

“We will work with the current contractor onsite (Icon Construction) to ensure the development remains safe and secure. Our focus will then move to assessing options that will see funds generated to repay creditors,” Gibson said.

“Seascape is a partially completed development. While we will move as quickly as possible to assess options, it may take some time considering the nature of the asset.”

The receivers will make further statements as the receivership progresses.

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Source: Radio New Zealand

KiwiSaver funds with exposure to oil and defence stocks might benefit from conflict in the Middle East in the short term, but providers are divided on whether to invest in them.

Oil prices have increased and stocks in companies that make weapons have also lifted.

Follow updates with RNZ’s blog

Over the past year, the share price of Lockheed Martin has lifted almost 50 percent.

It could mean investors and funds with exposure to those sectors record better returns in the short term than those who have taken an ethical stance against fossil fuels, or against investments in weapons.

“Defence stocks will outperform,” Koura founder Rupert Carlyon said.

“Not just because of this, we’ve got to think about the significant increase in defence spending across the globe over the last 12 or 24 months and what’s expected to continue. Particularly with Europe slowly increasing their defence spending towards 5 percent of GDP.”

He said he was not opposed to invest in companies that made weapons.

“The question we need to ask ourselves is why is it wrong to invest in defence stocks? The world is a pretty ugly place…. there are a lot of bad actors out there, right?

“Whether you’re concerned about Russia, China, North Korea, Iran… at the end of the day we need weapons. There’s no hiding the fact a world without weapons made in the West is a world controlled by people that we do not want controlling the world.

“We need to think really hard around our weapons exemptions – I understand we might not like cluster bombs, and other things that are deemed illegal. But the truth is we need defence contractors. We need weapons.”

But Berry said it was a decision that needed to be made by investors according to their own ethical viewpoint.

“It’s a very personal question. And for me personally, I don’t want my KiwiSaver – to the extent absolutely possible – I don’t want my KiwiSaver invested in profiting from war.”

He said investors in weapons companies could not discern whether they were supporting weapons used offensively or defensively.

“The question is, do you want a connection with conflict in your KiwiSaver?”

Companies like Lockheed Martin, General Dynamic, Northrop Grumman and RTX had generated strong returns in the last one, three and five years.

But investors should remember they were only 2 percent or 3 percent of the S&P500 index. Carlyon said the average KiwiSaver probably only had about 0.1 percent added to their return in the last year from defence stocks.

Oil versus lower carbon economy

Oil also posed questions investors had to grapple with.

“The question with oil is from an ethical perspective, it is problematic because we’re in a world that needs to transition to a lower carbon economy,” Berry said.

“If you look at oil companies, they have had strong performance for the last year. And while, although oil itself, West Texas Intermediate was up 5 percent overnight, but it’s actually slightly lower than it was three years ago.

“But oil companies have done well. Again …oil is about 3.5 percent of the S&P index. And so you compare that to technology at 33 percent, financials and banks at 13 percent, and healthcare at 10 percent.”

He said KiwiSaver was designed to be a long-term investment and in the past 10 years, oil and defence stocks had returned slightly less than the US market average. Technology stocks have been much stronger – recording such an increase that there have been fears of an AI bubble forming.

The founder of Mindful Money, Barry Coates said investors might react by thinking they should invest more in fossil fuels to make higher returns from supply disruptions.

“This temptation to go for short-term returns may override their ethical position to use their investment to support the energy transition. Others may choose to maintain their ethical principles, and recognise that oil price instability is more likely to result in a more rapid transition to renewable energy.”

He said it could be argued that the oil supply disruption and likely increase in the price of oil had already been taken into account in the forward prices of oil and share prices of some oil companies had already risen.

“Financial analysts in the US have been far closer to the politics of launching bombing on Iran than NZ commentators or members of the public.

“Oil price rises are often temporary. For example, the price increases after Russia’s invasion of Ukraine had a short blip on oil prices and oil and gas company share prices. Both measures soon resumed their pattern over the past decade, which has been to significantly under-perform the S&P500.

“The impacts may vary between individual companies in unpredictable ways. For example, with supply disruptions in the Strait of Hormuz. These disruptions might affect different companies in different ways.”

Gold has also been pushed up by the uncertainty, which Berry said was a rational move to safe assets.

Overall, equity markets have largely taken the turmoil in their stride so far.

The Vix index, which measures volatility, was on Tuesday morning at about half the level it was when President Donald Trump announced tariffs in April last year.

Berry said what happened from here would depend on how long the war continued and whether there was a regime change in Iran.

“What happens in terms of disruption globally? How is oil and shipping distribution impacted globally and for how long? And you really need to answer those questions to know what the long-term impact is.”

He said KiwiSaver members should remember they were diversified across asset classes and countries and that would reduce risk.

“Get your risk profile right, focus on the long term, and think about values you want to take into account in your investing, particularly around weapons and whether you want to be profiting from war.”

Carlyon agreed the market response had so far been much more muted than had been feared.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Latest house sales data indicates there is a shortage of ultra-luxury housing to meet the requirements of high-net-worth immigrants.

Changes to the Active Investor Plus visa, which take effect next week, limit house-buying immigrants to homes priced over $5 million.

Data collected by sales portal realestate.co.nz indicates the tightest house supply constraints were emerging well above that level, with only 142 properties listed above $10m available nationwide.

International premium-grade homes priced more than $20m were scarce.

Realestate.co.nz chief executive Sarah Wood said the top end of New Zealand’s residential property market was relatively immature by global standards.

“The AIP visa programme effectively introduces a positive demand shock into this segment of the market overnight, however, the supply has not had a chance to grow organically over time. The result is significant pressure on the supply of houses valued in the tens of millions.”

Data supplied by Immigration NZ indicates nearly 590 people from 33 countries have so far applied for residency under the AIP visa programme.

Agents reported a growing segment of applicants who were only interested in property priced more than $20m, with demand outstripping supply by about five times.

Portal data indicated there had been 36,000 overseas-based searches for homes price over $5m over the past year, with North America and UK making up over a third (34 percent).

“The United States accounts for around a fifth (19 percent) of international $5 million-plus searches, followed by the United Kingdom at 9 percent and Canada at 4 percent. That profile reflects demand from established wealth markets rather than speculative traffic.”

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Source: Radio New Zealand

Women are being told to take more risk with their KiwiSaver to help close the gap between their average balance and those of men.

Westpac said while the gender gap had narrowed from 17 percent in 2020 to 14 percent in 2025, men were contributing and saving more even though women live longer on average.

In the Westpac KiwiSaver funds, men had higher average balances in all age groups once people were over 18. The biggest gap was in the 30 to 39-year-old age group, where men had an average balance of $28,992 compared to $21,740 for women.

Westpac general manager of product, sustainability and marketing Sarah Hearn said part of the different was the gender pay gap and time out of the workforce. But women were also more likely to be in less risky funds.

Men had 37 percent of their total balances invested in growth and high-growth funds, compared to 32 percent for women, who hold more of their KiwiSaver in moderate or conservative funds.

Higher-risk funds should deliver higher returns over time.

Morningstar data shows that aggressive funds have returned an average 9.5 percent a year over 10 years compared to 4.2 percent for conservative.

Hearn said women taking a more defensive strategy early in life could miss out on tens of thousands of dollars over the decades.

Earlier, Westpac estimated that the gap in outcomes between someone in a conservative fund and someone in a growth fund over 30 years could be more than $225,000 for a median earner on a total 6 percent contribution.

“Historically women have made more conservative fund choices, but if they’re saving for the long term – at least 13 years – and are comfortable seeing larger up-and-down movements in their balance over time, I’d encourage them to consider what type of fund they’re in,” Hearn said.

She urged women to talk about their financial decisions. “We know men are really much more comfortable taking about numbers and money than women are… I think there’s a great opportunity where we could be talking more about our KiwiSaver balances, our returns, the types of funds we’re in and just having more conversations about money.”

She said people should check the type of KiwiSaver fund they were in and make sure it was right for them.

“Make sure it’s in line with your risk appetite and also the timeframe. I think that’s the most important thing. we know that balances can go up and down over time. There can be volatility, but this is the long haul. We’re all looking forward to retirement one day but in most cases it’s a couple of decades a way. It’s definitely the right time to take on a little bit more risk so that we can have our money working harder for us.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

There are calls for more support for green fuel alternatives as the Middle East conflict exposes New Zealand’s vulnerability to fuel supply chain shocks.

Auckland University economic modelling has found green hydrogen – hydrogen produced by renewables – could have some limited use in future for industries heavily reliant on gas and coal for production.

But cost and limited infrastucture remained major barriers, as did a lack of government policy.

“If we can use renewable electricity, wind, for example, or possibly geothermal as a source of electricity, then that is an attractive option,” Auckland University energy economist Professor Basil Sharp said.

“But until such time as the technology improves and we can get the costs down, it’s going to be somewhere out in the future.”

As the government pushes ahead with a liquified natural gas import facility and global LNG prices soared as a result of Qatar halting production, Sharp said more attention needed to be paid to New Zealand’s energy independence.

“There could be an unintended impact associated with promoting importation of LNG that could and I’m not saying it will, but it could have an impact on the rollout of our renewables.

“It could have an impact on the technology, such as the viability of green hydrogen going forward.”

Green hydrogen a bit player in road to net zero

The modelling found that at best, green hydrogen was capable of supplying about 12 percent of industrial process heat energy by 2050 .

Because it was so expensive to produce, green hydrogen needed the right conditions to be viable and was more attractive when carbon prices were higher, renewable electricity was cheaper, and hydrogen technology costs fell.

It was in those scenarios researchers said hydrogen could play a complementary role in helping New Zealand reach net zero emissions, but electrification was still the key.

“Even if they are making very small contributions to our energy independence when the technology and and the costs come down, we need to be in a position, to take advantage of that and actually promote the utilisation of hydrogen in the economy,” said Sharp.

A new export for NZ?

One of the model’s co-authors and senior economics lecturer Le Wen said New Zealand was already well-placed to produce green hydrogen because 80 percent of our electricity was renewable.

Wen said that if the country invested in and scaled up green hydrogen production, the country could become a leader in genuinely low-emissions hydrogen.

“It may not solve everything on its own, but it could give the country a strong new export opportunity,” he said.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

A “very small dent” or black mark on a wall. A Raro spill on the carpet. A broken mop and bucket.

These are some of the issues that have divided landlords and tenants who have appeared before the Tenancy Tribunal in the past month, working out what is “wear and tear” and what counts as “damage” to a rental property.

Tenancy Services says fair wear and tear refers to the gradual deterioration of things that are used regularly by people living in a property. Tenants are not responsible for this provided they are using the property, or the chattels provided, normally.

But tenants are responsible for intentional or careless damage.

“An example of this would be where a stove element wears out from normal cooking. This is fair wear and tear. However, if the stove was being used to heat the kitchen and stopped working properly, this would not be considered normal use.”

It’s an issue that can cause a lot of consternation.

In one case heard last month, a landlord sought compensation for the $28.82 cost of replacing a mop and bucket, among more expensive items.

The adjudicator said the evidence did not prove the damage to the mop and bucket was more than normal wear and tear.

But in another, a tenant’s former partner spilled Raro on the carpet and the adjudicator was “satisfied that the damage was caused carelessly”.

Last month, a landlord who argued the walls had been damaged was told one area of damage looked to be a “very small dent or black mark” and fair wear and tear.

Another landlord was told that there was not enough evidence that the tenant caused damage by causing chips on a granite bench top or pin holes to her walls.

Cassie Metcalfe, of iRentProperty, said there was confusion among landlords and tenants about how the rules might apply.

“When we think of what’s reasonable, different people will have different interpretations of that.

“There’s a lot of things to consider. One is the number of occupants in the house, the length of the tenancy, the condition of things when the tenants first moved in. I think it takes all parties to apply a level of fairness and reasonableness to come to an agreement. There’s no clear cut line unfortunately.”

She said landlords should make sure their inspections were done to a good standard and records kept. Tenants should report issues.

“You want to make sure these are documented, photographed wherever possible. If there is wear and tear at the end of the tenancy this could end up going to the tribunal where the mediator or adjudicator is making a decision and they can rely on the evidence you have.”

Sarina Gibbon, director of Tenancy Advisory, agreed people entered tenancies with different expectations.

She said wear and tear could be thought of as “time doing its thing” while damage was “someone not doing their job”.

“When I reflect on talking to landlords and tenants it’s always that expectation if you’re on the landlord side of the equation that you expect the property to be left in a pristine condition – that the tenant should take extra care as if they own the property. Let’s be honest, we’ve all hired a car before, we know how we treat a hire car … it’s really about the relationship rather than nitpicking the little things.”

She said having a bit of room to move meant tenants and landlords had to engage with common sense and be pragmatic.

“In a way it is good that wear and tear is not strictly defined – I’m not convinced that it would serve the benefit of the sector to have it strictly defined but I understand that from a day to day it does create some frustration.

“When people are trying to nitpick a tenant for $30 damage I would say the problem isn’t the $30 problem, your biggest problem is that it is not a productive relationship.”

She said landlords were often caught out by betterment. They cannot expect to be put back into a position that is better than they were in before the damage occurred.

“The tribunal is consistently good at accounting for betterment when it is ordering compensation. If the tenant had damaged something the tribunal would say – let’s say we’re talking about carpet … the tribunal will account for the fact that it is 10-year-old carpet, you’re not going to get replacement value.

“This isn’t an insurance policy, this is about restoring the landlord back to the position the landlord would have been in if the damage had never occurred. I don’t think people go into the process expecting that they get betterment, they don’t consciously think about it because think they ‘I have to put in a new carpet so the tenant should pay for the carpet – what they don’t account for is the carpet had deteriorated for 10 years.”

NZ Property Investors Federation spokesman Matt Ball said that was a bigger problem.

“On the face of it, this seems like fair principle, however the practical application of it sometimes results in significant financial harm to the landlord. For example, you may have a perfectly good five-year-old dishwasher that has been fully depreciated, with a book value of zero. The tenant can literally destroy this appliance and the landlord cannot claim any compensation, even though the appliance may have had many years of useful service left.

“The reason for this unfairness is that depreciation isn’t a measure of the item’s actual value. Depreciation is an agreed way a business owner can offset the cost of assets against income over time. It is never a full recovery of the cost of the asset, so if the asset is damaged or destroyed, the landlord is left out of pocket. In the same way that insurance policies often have an agreed value for items covered, it would be good if the law was changed to allow the Tenancy Tribunal to set an agreed value for destroyed or damaged assets so that landlords aren’t financially disadvantaged when a tenant causes actual damage.”

He pointed to a case last year in which a landlord said insurance had covered a claim up to $15,000 for meth contamination but the cost had been $18,000 more.

The adjudicator said that after three years, things like linen, bedding, crockery and cutlery were deemed to have no value for tax purposes. The adjudicator said when things were taken out of the claim that had no residual value, there was $10,836 in damaged goods – below the insurer’s payout.

“What strikes me in this case is that the landlord is left worse off, even though, as the adjudicator states in their ruling, ‘the landlord should be returned to the position they would have been in had the tenant not breached their obligations, and should not be better or worse off’,” Ball said.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand