RSS Feed

Associated person - there is no there there

Friday, March 13, 2020

Some concerns have been raised about the application of the associated person rule (APR) vis-à-vis 218-1’s infringement offence regime. More specifically, how the rule interacts with the two-tiered penalty system that fines landlords with 6 or more tenancies twice the amount of what it would a landlord with 5 or less. We are aware of some interpretations out there suggesting that the APR would capture all tenancies within the same whānau/extended family group. This is not the case.

It should be pointed out that the APR is distinct from the new definition of ‘member of the landlord’s and owner’s family’. The Bill specifically states that the APR is only applicable to provisions that relate to landlords with six or more tenancies. Generally speaking, the application of the APR relates to the infringement offence regime (see above). The new definition for 'member of the landlord’s and owner’s family' is intended to be applied to the terminaiton provisions as relate to the landlord and/or his family moving into the property or being on the receiving end of anti-social behaviours. To be clear, the definition of ‘member of the landlord’s and owner’s family’ has no place in determining where an infringing landlord sits in the penalty tiering system (i.e. how many tenancies the landlord is deemed to have for the purpose of working out the applicable fine).

So what exactly does the APR capture?

For two individuals, you are an AP of a landlord if you are

  • a parent or a child of the landlord;
  • a spouse, civil union partner or de facto partner of the landlord;
  • a parent or child of the spouse, civil union partner or de facto partner of the landlord

For an individual and a company, a company is an AP of a landlord and vice versa if the landlord is

  • a director or an officer of the company;
  • associated as an individual would (see above) to a director or officer of the company;
  • is directly or indirectly able to exercise control over the affairs of the company

For two companies, one is an AP of the other if

  • it is a holding company or subsidiary of the other within the meaning of section 5 of the Companies Act;
  • one owns or controls enough shares to exercise 20% or more voting power at the other’s meetings;
  • both have the same holding company within the meaning of s5 of the Companies Act;
  • if a third person owns or controls enough shares to exercise 20% or more voting power at each companies’ meetings.

While this piece does not seek to comment on the rightness or wrongness of the infringement offence regime, on the face of it, the APR seems to be a reasonable control in determining the true number of tenancies an infringing landlord has for the purpose of imposing the appropriate financial penalty. We remind readers not to be confounded by suggestions that the APR and ‘member of the landlord’s and owner’s family’ have a compounding effect on infringement penalties. That is simply false.


Recent Posts


relationship yield heater auckland rental wof negotiation DTI nzpif trust recycling equity rta reform Guest blog letting worksafe equity short-term rental water bill Must knows bond tenancy tribunal khh data security interest rates RBNZ Jeff Bezos robert kiyosaki finance mindset rent bad tenant Market report covid-19 meth contamination Must know election 2017 property cycle trademe ventilation Property (Relationships) Act tenancy issues development termination rent increase trespass warren buffett insulation Standards New Zealand subdivision LIM return damage education Case study ring-fencing tax first home buying HSWA partners skill shortage sale and purchas reserve bank management clnz Gluckman lvr warm up new zealand cash-flow wealth creation property maintenance HHGA personal growth Q&A cgt boarding house Sponsored post speculator house prices market rent anz watercare tenant legal maintenance Investment tip structure interest only p lab Kris Pedersen Mortgages and Insurance cat financial advisers act investment strategy buying rules ocr meth parry v inglis Tribunal case study rent arrears TCIT smoke alarm scotney williams banking rta debt enforcement Holler housing affordability housing bubble privacy rental market unitary plan business off the plan income RTAA 2019 CCC investor extractor fan ird buying beginner investor insurance sublease Level 4 letting fee property building holiday house minor dwelling Editor's Choice landlord Question and answer productivity advice shower dome HHS positive cash flow wins CoreLogic principal and interest twg report Landlording tenancy services fixed-term tenancy ask an expert asbestos inspection Investor story renovation market sale and purchase property value mortgage airbnb initio auckland council government How to buyer's agent heating television winz property management capital gain bond form gluckman report


Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo Keith Hay Homes logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo
09 360 2376

The Tenancy Practice Service and TPS Credit Control work closely with the Auckland Property Investors' Association. Our vision of bringing helpful resources, documents and high quality services to Auckland Property Investors and Property Managers is shared by APIA, so its a partnership that works well. 

The Auckland Property Investors' Association is a great organisation for those who want access to advice and information from a range of industry experts and partners. 

Mathieu Holt- Managing Director, The Tenancy Practice Service & TPS Credit Control
Through the Association I found the channels and methods to fund the purchase of property I never dreamed about. Grant Brown

All round it has been one of those things Neil and I felt was really worthwhile belonging to. We have learned so much it has just built our confidence in what we are doing.

Janice Bieleski
I read two articles in the monthly magazine that saved me over $5,000. That is my membership fee for the next 26 years and I am sure I will learn a whole lot more! John Duncan
Fantastic organisation. The networking opportunities are brilliant and provide us with information and opportunities that cannot be obtained anywhere else. We learn something new at every meeting and we've been in this game for nearly 20 years. Pauline and Gyanen Kumar

I find the information obtained from various APIA meetings very useful in guiding my own property investment and rental management.  I also enjoy the networking opportunities with like-minded investors.  I am inspired by other investors’ success and find the more experiences and knowledge that I share with others, the more confident I become.  

Thanks to all APIA event organizers and administrators for your brilliant work. 

Stella Shao

I like talking to people and learning from their experience because it gives me the confidence to invest well. I think it is a knowledge thing. I now know I am doing things the right way.

Stephen Weatherall

My APIA membership has become a total success.

Every time I attend a monthly or regional meeting I come away with so many useful and positive tips that have added value to my property investments and management.

Not only that, the website is a great place for practical advice and useful information. It has now evolved into an important resource for my business.

Talk about value for money! The discounts I have been getting at Bunnings when I present my APIA membership card have more than paid for my annual subscription!

Tim Duffett, Plan A Investments Limited