Property managers The Rent Shop apologise after renaming Christmas 'termination season'

A property management company has apologised after warning tenants "termination season" is approaching.

The email, sent out by The Rent Shop's Dunedin office, also urged tenants on a budget to prioritise rent over buying Christmas presents so staff members' holidays wouldn't be ruined.

"Christmas time is... known in property management circles as 'termination season', as so many people choose to use their rental payments for Christmas spending instead of ensuring that accommodation for them and their family remains top priority over this period," the email, obtained by Newshub, read. 

"We see so many tenants get behind, and then not be able to catch up. We then have a difficult time with the unfortunate job of having to remove and terminate these tenants from their properties. It is not pleasant at all, and we can only enjoy our Christmas less because of this.

"We urge you therefore, that you pay careful attention to ensure that throughout December and January, you pay your rent on time, every time. We ask this simply so that your living arrangements are not jeopardised over this coming festive season."

The email was apparently sent to tenants in Dunedin regardless of their payment record. One recipient, who wished to remain anonymous, told Newshub they and their flatmates had been in their place two years and only missed a single payment because of a bank mix-up. 

"The Rent Shop has been the most onto-it property managers we've had to deal with, but they obviously have a landlord-first attitude and with emails like this I worry for poorer tenants," the tenant said. 

Another person posted a section of the email on social media, calling The Rent Shop "property parasites".

"I like how they're trying to elicit sympathy by saying it makes their Christmas less enjoyable when they evict people," they wrote, saying the email had been sent to one of their friends. "Being a property manager shouldn't be about sending tenants unnecessary threatening emails saying pay your rent or we will have a sad Christmas, but here we are," they added. 

Alex Watson, chief executive of The Rent Shop, apologised for the poor wording of the email. 

"Fundamentally the word termination was wrong... I can see how it's been deemed a bit threatening, definitely threatening to tenants. It's not a nice word and we certainly do apologise that that wording was used."

He said it's true the Christmas season historically sees more people evicted than usual, but that's a "last resort". 

"We don't enjoy taking tenants to the [Tenancy] Tribunal... and it's not pleasant for our tenants either. It was more a case of a reminder - it should have been worded much better - as a reminder, to say if you are struggling over this time please get in touch."

This year has seen property values skyrocket, fuelled by a lack of supply and cheap borrowing. The Reserve Bank has kept interest rates at record lows to fulfil its stated objectives of controlling inflation and maintaining employment. But with concerns it's also making housing unaffordable, the Government has recently asked the Bank to keep house prices in mind when it makes decisions about monetary policy.

While many landlords are getting richer on paper, Watson said those gains are only realised when the property is sold - and in the meantime, they rely on tenants paying their rent on time.

"Many landlords actually have a mortgage on their investment property, and they need the rental income to service that mortgage. That's fundamentally a reminder as to why rent's being paid - many landlords can't actually afford for tenants not to pay their rent at any time of the year, let alone Christmas."

The growing gap in wealth between property owners and those stuck renting has been cited as a potential cause of growing social instability from both the left and right. In November, Green Party co-leader spoke of a "wicked divide" growing in New Zealand society, and earlier that month Eric Crampton of the NZ Initiative said "hammering the throttle on asset prices will widen inequities between housing's haves and have-nots", calling it a "threat to equity and social stability". 

The average house price in New Zealand is more than seven times the average household income - more than twice what it was 20 years ago. In Auckland, the ratio is more than 10. A Commission for Financial Capability survey earlier this week found a third of Kiwi households had less money in the back pocket now than at the start of the year.

Watson said 2020 had been "a tough time for everyone", both tenants and landlords - despite the state of the housing market -  

"The word 'termination' was wrong, and I do want to emphasise we don't want to go through that process, and we would encourage anyone that may be struggling for whatever reason...  to get in touch with us." 

Newshub reached out to the NZ Property Investors' Federation and Renters United for comment, but didn't get a response from either.