On November 19 2020, Barrie Sutton, Chief Investigator of the Commerce Commission, gave a Zoom presentation to members. Here are the slides of that presentation.
Here is a video of the presentation
Meeting with the Commerce Commission 8 October 2020
Those attending were:
Katie Rubatch Head of Competition and Barrie Sutton Principal Investigator.
Andrew King, Sharon Cullwick and Jan Hains
The purpose of the meeting was to explore and understand the role of the Commerce Commission and how the laws apply to landlords and the rental property industry.
The role of the Commission is to enforce competition, fair trading and consumer credit contracts laws. As rental property owners are in trade, the laws do apply. Landlords of residential properties in the same geographic area are in the same market even if the properties are very different – for example a stand-alone house and an apartment. Competition is affected if there is agreement to set future prices and there is a very low threshold for this agreement. It could be the result of a casual conversation in a social setting or in an online chat group or it could be at a formal meeting. Each property owner must make an independent decision about the level of rental he or she will charge to avoid being accused of cartel like behaviour.
Associations and the Federation are able to present information but it is important not to take the next step which would be to recommend a particular level of rent. The information provided could be all the things to consider when setting rent – the costs and the desired margin – but each owner must make an independent decision. Providing guidance and regular reviews of costs and rents is acceptable but forecasting and sharing information of intention is starting to get into risky behaviour.