Initiatives to clean up local rental properties are being launched by the Queenstown Lakes District Council following widespread complaints from tenants.
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Tenants complained to Radio New Zealand of squalid living conditions and bond money being kept in landlord's personal bank accounts.
The council said it would be working with the Ministry of Business Innovation and Employment to pressure landlords into complying with Tenancy Services' agency requirements.
The council recently discovered one landlord holding $58,000 of tenants' cash, which has now been deposited with Tenancy Services.
The landlord at the centre of the current rental accommodation debate, Perry Noyce, said he would not be putting his tenants' bond money into the Government scheme as he was about to shut down the house for urgent repairs.
No formal policing
Currently there is no formal policing of the Tenancy Services requirement for tenancy agreements and bonds. In Queenstown landlords have only been discovered withholding bond money when the council has responded to a noise or public health complaint from neighbours.
Council inspectors visited Mr Noyce earlier this year when neighbours complained about noise and overcrowding at one of his rental properties in the suburb of Fernhill.
Mr Noyce argued that he lived in the house full time, which meant he avoided many of the Government's tenancy requirements.
But it has since been discovered he lives at at least two other addresses, and the council believes tenants' money should be lodged with Tenancy Services, regardless of planned repairs or a shut down.
In the meantime, more tenants have contacted Radio New Zealand, one complaining of his belongings being thrown out of his rental house because of an argument with the landlord.
The locks have been changed and his bond money, held by the landlord, has not been returned. That tenant has involved the police and the courts in a bid to get his belongings, and his cash, back.
Comply or risk prosecution
Queenstown Lakes District Council property services manager Peter Laurenson said landlords operating under the radar needed to comply with Tenancy Services or risk prosecution.
"It's not something we want to do but we are prepared to go that far if landlords don't respond to our requests," Mr Laurenson said.
The booming local tourism economy brings more than $1.4 billion each year to Queenstown but produces massive pressure on local housing due to many workers being on low pay and having to pay high rents.
A meeting between lower South Island councils and the Ministry of Business Innovation and Employment will be held in Queenstown later this month.
It will look at ways to improve compliance with Tenancy Services requirements and decide which agencies will enforce compliance.
