Who’s Afraid of Virginia’s Wolf?

9 Sept

You’re in the business of getting investors. So tell me this: Do investors like restrictive covenants?

Yeah… nah.

Yet I’m aware of a landlord who, while staring down the soon-to-be presumptive right for tenants to have pets, made the baffling choice of covenanting his own title against all animals.

Bonkers, yes. Predictable, ABSOLUTELY. Fear makes smart people do dumb things. And this is where sharp property managers step in.

Sixty-four percent of New Zealand households have a pet. Fewer than fifteen per cent of landlords allow them. That mismatch has defined the market until now; it explains why fear has been so commercially corrosive. Landlords who said no to pets shrank their pool, stretched vacancies, and left money on the table.

But that mismatch is about to collapse. Once the presumptive right comes into force, tenants will no longer be locked out. The risk shifts. For now, the cost of fear was lost opportunity. After the rule comes in, the cost of fear will spell Tribunal trouble. Saying no without valid grounds will not just be irrational, it will be unlawful.

Fear versus risk

Fear is emotional. Pets are dirty. Pets destroy carpets. Worst of all, it’s yet another win of the woke left that seeks to undermine the free market. Yeah, yeah. I’ve heard it all before.

Risk is measurable. How does the insurance policy respond? What will wear and tear look like? How should it be managed?

Pre-rule: Fear drove landlords to walk away from commercial upside.

Post-rule: Fear will drive landlords into breaches of the RTA and potential unlawful-act penalties.

Don’t dismiss fear. Acknowledge it, then reflect it into lawful levers: pet bonds where available, pet-specific clauses that set behavioural expectations, advice to upgrade to hard-wearing materials, and better use of property inspections. Before, these steps protected yield. After the law change, they also prove compliance and keep landlords out of enforcement crosshairs.

Garlic at the door

When people are spooked, they reach for talismans. In property, that talisman has been the no-pet clause.

Pre-rule: Most landlords defaulted to a blanket ban, scratching it into the tenancy agreement and hoping the Tribunal would enforce it. Sometimes it does, sometimes it doesn’t.

Post-rule: A blanket no-pet clause without valid reasons will be an unlawful act, exposing landlords to fines of up to $1,500. Fear disguised as boilerplate is no longer harmless, it carries a statutory penalty.

Shift landlords from superstition to structure. Build a record of reasonable decision-making. Offer three lawful pathways: accept with conditions, accept with modifications, or decline with documented grounds that align with the Act. Pre-rule, this helped in grey areas. Post-rule, it will be the evidence you need if a decision is challenged in the Tribunal.

The interplays that matter

The new pet rules don’t exist in isolation. They mesh with the rest of the Residential Tenancies Act.

Pre-rule: Refusing a pet often ended the story.

Post-rule: A refusal may be the start of a bigger legal test. Tenants can request alterations. Some are “minor changes” that landlords must consent to. A dog refused on the grounds of fencing may reappear once the tenant installs compliant fencing at their own expense.

Liability follows the same arc. Yes, tenants are responsible for pet damage. But liability is not recoverability.

Pre-rule: With fewer pet tenancies, the issue rarely escalated.

Post-rule: More pets mean more claims. And if the tenant cannot pay, insurance must respond. Landlords who ignore exclusions, excesses, and subrogation rights are leaving themselves exposed.

Teach landlords to stop thinking in absolutes. Reframe objections as lawful forks. “If your concern is fencing, the tenant may solve that lawfully. If it’s damage, insurance will share the risk. Here are your options.” Before, this was persuasion. After the law change, it is a compliance defence.

Market signals and silver bullets

Tenants are already voting with their searches. “Pet-friendly” sits near the top of TradeMe’s filters.

Pre-rule: Saying yes to pets was a commercial advantage.

Post-rule: Saying no without justification risks a Tribunal case and fines for an unlawful act.

The advantage will fall to managers who combine EQ with systems. EQ allows you to hear the fear without absorbing it. Systems make that EQ actionable: insurance reviews, upgraded fixtures, and a documented ye-no-maybe framework that can withstand Tribunal scrutiny.

Recast the presumptive right as leverage. It’s not grudge-compliance, it’s opportunity; stronger tenant retention, reduced vacancy, better risk sharing with insurers.

The wolf in the mirror

The Labrador at the door is not the problem. The real danger sits in the reflection that’s staring right back at you, the mindset that treats every tenant request as a threat.

Pre-rule: Fear corroded yield.

Post-rule: Fear will corrode compliance. Both end in penalties and lost value.

Here is the roadmap. Stop confusing fear with risk. Step away from garlic-clause superstition. Master the interplays between pets, fixtures, minor changes, liability, and insurance. Turn fear into confidence. Because the alternative is far too unthinkable: trapped in paralysis, clinging to unenforceable bans while the rest of the market moves on without you.

At my upcoming Fur Real workshop (6-10 October), we will spend a good amount of time unpacking these critical interplays to support your decision scaffold once the pet rules go live: