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Address to the Board of Watercare Services

Thursday, October 24, 2013

The Board of Watercare Services invited public deputations at its board meeting this morning.  Below is a statement read out by John Priest, Secretary of the Auckland Property Investors' Association, outlining two fundamental issues Auckland landlords seek to have addressed: 

Good morning. 

My name is John Priest.  I am here in my capacity as Secretary of Auckland Property Investors' Association. 

The association is an independent, non-profit organisation.  It was established in 1994 and is affiliated with the New Zealand Property Investors' Federation, the umbrella body for 20 local property investors' associations throughout New Zealand.

The Auckland Property Investors' Association seeks to provide professional development and education for its members. 

We also aim to represent the interests of our members and landlords in general, to Government and Local Authority organisation.

That is why I am here this morning to address the Board of Watercare Services.

In its Statement Of Intent, Watercare has six Key Goals, one of which is:

Satisfied customers and stakeholders: To provide great service and value. 

On behalf of our residential landlords I can advise that we are not satisfied with some aspects of your service: 

The first issue I want to address is the disparity between Watercare's standard terms of service for residential and commercial customers. 

Within Watercare's standard terms of service there is the statement: 

You are a residential customer if you own a residential property and only use our goods and services for domestic purposes.

Compare this with the statement: 

You are a non-residential customer if you own or lease a non-residential property, or use our goods and services for non-domestic purposes.

These terms make no mention of residential tenants, who are also water consumers.  

Watercare appears to have made an arbitrary decision to differentiate between residential and commercial tenants.  It acknowledges commercial tenants as a class of water consumers but falls short at doing so for residential tenants.

We are left with a situation where Watercare has decided that residential landlords are liable for their tenant's use of water.

This policy is out of kilter with Section 39 of the Residential Tenancies Act 1986.

But, as landlords we currently have to accept that Watercare Services chooses to bill us for all of the water charges for residential tenancies, and that we are responsible for these charges even through we have no control over them, and that it is up to us to try and extract the water supply and wastewater components of these charges from our tenants to reimburse ourselves.

This policy is at variance with every other domestic utility supplier, including electricity, gas, internet, and telephone services.  These other utilities place no restrictions on accepting residential tenants as customers.

The relatively recent Watercare policy of installing water meters and charging on the basis of consumption envisaged water as a scarce resource, and aimed to limit consumption and eliminate wastage by financially penalising those who were careless in their water use.  So it is logical that residential tenants end up paying for the water they use.

Watercare appears to have no basis to justify its differentiation between residential and commercial tenants other than the convenience of having landlords act as its debt collectors.  

The Auckland Property Investors' Association would like the standard terms of services to be re-worded, to read:

You are a residential customer if you own or rent a residential property and only use our goods and services for domestic purposes.

This morning I also want to address the implications for residential landlords of Watercare not invoicing separately for fixed charges and usage charges. 

As part of the educational function of the Auckland Property Investors' Association, we stress to our members that they cannot charge tenants for the fixed component of each residential water bill.  But Section 39 of the Residential Tenancies Act 1986 does allow us to charge for water consumption.  So it is common practice for residential landlords to charge tenants for water usage.

Each time a responsible landlord receives a bill from Watercare and seeks to re-invoice the tenant, he or she has to go through the exercise of deducting the fixed charge from the bill.  This was onerous enough before Watercare chose to adopt monthly billing.  Now, any landlord with multiple properties faces an administrative burden each and every month.  The monthly fixed charge is not even uniform each month or between different properties within the same month - it depends on the number of days covered by the invoice and which day of the month it is issued.

There are at least 180,000 residential rental properties in Auckland.  Not all landlords understand that they cannot pass on the fixed charges and there are also many tenants who are aware of this. 

The Watercare practice of putting fixed and consumption charges on the same invoice often leads to confusion among landlords and tenants.

We see no reason why Watercare cannot issue separate invoices, one for the fixed costs and another for the variable component.  Watercare could then send the bill for fixed costs to the property owner, while the bill for water usage would be sent directly to the tenant.

At the least, we believe Watercare should provide residential landlords with the option to pay the $190 annual fixed charge in advance, so that for the remainder of the year only consumption charges would appear on invoices. 

To conclude, I have two questions I would like the Board to answer:

FIRSTLY, will Watercare change the wording of its terms of service to correct the current disparity in its treatment of residential and commercial tenants?

SECONDLY, is Watercare willing to consider issuing separate invoices for fixed charges and consumption charges? 

Watercare has advised that a written response to this submission will be made within 7 days.  

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