Warning all landlords - compliance non-negotiable
Tommy’s Property Management, the property management division of Tommy’s Real Estate says that the Ministry of Business, Innovation and Employment (MBIE), has put landlords and property management companies on notice. MBIE is the government agency responsible for tenancy services in New Zealand.
Jack Vale, Business Development Manager with Tommy’s Property Management said, “Landlords and property managers are now being put on notice that it is imperative that they ensure compliance is a number one priority or face the consequences.”
The warning shots follow an audit of five separate property management companies across the country that found varying levels of compliance in some of the most basic requirements of being a landlord, namely insulation and smoke alarms.
Jack Vale says the changes to the legislation surrounding smoke alarms and insulation have been well-publicised and must be complied with. Smoke alarms must be within three metres of bedroom doors and insulation must be in all rental properties where applicable by 1st July 2019.
“However, many private landlords are unaware that despite the deadline for insulation being a little over two years away, the Residential Tenancies Act (RTA) requires all tenancy agreements to include the type of insulation in the property, where the insulation is and the ‘R’ rating of this insulation. Failure to do so is treated as an unlawful act under section 13(a) of the RTA and as such landlords can face up to a $500 fine for an incomplete tenancy agreement.”
Team manager Steve Watson of MBIE’s compliance and tenancy team said, “We take breaches of residential tenancy law seriously and are working to crack down on poor landlord behaviour across New Zealand.”
The team, who were founded in 2016 have the power to prosecute landlords who persistently and seriously breach basing housing standards.
The warning shots stand as a reminder to landlords that they are running a business. As such, they have certain responsibilities and obligations to their tenants to provide a service.
Tommy’s says landlords can no longer assume that tenants are happy to sit back and tolerate poor living condition and failure to act will encourage tenancy services to investigate. With the increasing number of regulations in the industry, property managers and landlords alike would do well to keep up to date and aware of these changes.
The New Zealand Property Investor Federation (NZPIF) believes that most landlords take their obligations seriously. NZPIF data shows that 83% of their members’ properties are fully insulated to the RTA’s standards, two years ahead of the 2019 deadline.
Despite this, Tommy’s Property Management encourages residential property investors to be aware of their current insulation and whether this is compliant. In Wellington, the new standard requires an ‘R’ rating of 2.9 in the ceiling and 1.3 underfloor. Tenancy services declare “any new insulation installed into rented home (income related or not) from this date (July 1, 2016) must meet or exceed the higher requirements for newly installed insulation.” In general, all areas of ceiling insulation should have a thickness greater than 70mm above all habitable spaces.
Homes built after 1978 with insulation which met thermal requirements at the time of construction are still likely to comply with regulation, providing that the insulation is still in good condition.
Jack Vale says, “Checking that your home is up to the outlined standards should be a number one priority for landlords and should be covered in your annual property inspection.”