Answers to Frequently Asked Questions about how a Compass Private Lease can provide you with up to 10 years guaranteed rent on investment properties in some of the fastest growing hot spots in the North Island

A Compass Private Lease is a contractual arrangement where CPI leases your property from you and then sub-leases it out to their own tenants. Typically, this type of lease applies to top-of-the-range properties in some of the North Island's most up-and-coming property investment hot spots. 

Although Housing New Zealand Home Leases apply to the majority of CPI's properties on offer, there are always occasions where Housing New Zealand has no presense in a given "highly sought-after" area. It's under these circumstances that Compass will provide its own private lease option incorporating a rental guarantee and full property management service for properties it's offering for sale at these locations.

You or your nominated entity i.e. an LAQC, retain full ownership rights to your property.

CPI Property Management offers a 5 year lease with a 5 year right of renewal on a year-by-year basis i.e. years 6 - 10 will see the lease reviewed annually, giving you greater flexibility through the second half of the Compass Private Lease period.

You can "sell" your property at any time during the Compass Private Lease period provided you sell the property with the lease intact i.e. the property is on-sold as an investment property to the new purchaser. The new purchaser would then benefit from the rental guarantee for however many years were remaining on the lease.

CPI Property Management assumes full responsibility for finding and managing tenants for your property.

Not at all. However, if you do wish to meet the tenants for some reason, permission must be sought through CPI Property Management, first.

CPI Property Management has the contractual responsibility of providing "full property management services" for the entire term of the lease.

CPI Property Management undertakes to inspect your property every three months. You're welcome to come along and participate in the inspection process if you wish.

CPI Property Management places a $5,000 cash bond into a solicitor's trust account for each property it has under management i.e. each property with a Compass Private Lease.

In the unlikely event that CPI ceases to operate, the cash bond represents between three and four month's worth of rent - depending, of course, on the amount of rent being paid at the time - that can be honoured in the event of a tenant defaulting.

It should also be said that "if CPI ceased to operate, the property book i.e. the properties under CPI's direct management at the time, would almost certainly be taken up by another property management company.

The rent is paid on the first day of each month, monthly in arrears. The first rent payment would therefore be a "proportionate payment" determined by the commencement date of the Compass Private Lease.

You are guaranteed your rent payment from CPI Property Management on the first day of each month, regardless of whether or not the tenants pay CPI Property Management on time.

All rent paid to you throughout the term of the Compass Private Lease will either be at market rates or at the "floor rate" i.e. should CPI Property Management need to honour the rent guarantee - either during a period of vacancy or tenant payment failure - the rental amount paid to you during this period will be equivalent to 90% of the rent at the commencement of the lease.

CPI Property Management conducts a rent review each year on the anniversary of the commencement date of the lease.

Any repairs resulting from tenant damage - intentional or otherwise - are covered in full by CPI Property Management.

Typically, CPI property Management carry out such work. The resultant cost is then deducted from the monthly rent payable to you.

Urgent maintenance is carried out by CPI Property Management or contracted out to appropriate parties. The cost is then deducted from the monthly rent payable to you.

You would be notified by CPI Property Management of any such urgent maintenance work being undertaken.

CPI Property Management pays the Water Rates and then claims this money back from the tenants.