Changes coming soon for Insulation and Smoke Alarms – September 2015

by Tracey Sparrow

As a Landlord, are you aware the Government is proposing to amend the Residential Tenancies Act 1986 to improve rental standards and tenancy services?  These amendments will mean that Landlords will have to meet new requirements in regards to:

  • Insulation,
  • Smoke alarms and;
  • A new 10 day process of re-tenanting properties where a tenant has abandoned their obligations.

For many Landlords the proposed legislation changes will be significant and Irelands are here to guide our Property Owners through the new requirements.  The following outlines the implications of the proposed changes, and what Irelands will be doing to ensure our Owners are compliant moving forward:

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Insulation

Everyone agrees that insulation is an important provision for a household.  From the point of view of a Tenant, their home is healthier and more economical to heat when insulated.  From the Property Owner’s perspective, their investment is easier to rent (marketable) and could potentially attract a higher yield.

Amongst the changes to the Residential Tenancies Act 1986 is the enforcement for a minimum standard of insulation in all tenanted properties – both floor and ceiling insulation will be required to meet this new standard by the 1st July 2019.

It is important to note there are some exemptions to the new legislation – specifically in relation to a house which does not have the physical space to implement the minimum standard of insulation. This is where it is physically impractical to retrofit insulation due to limited space underfloor or inaccessible raked ceilings.

In addition to the above, from July 2016 all Property Owners/Landlords will be required to declare the extent of insulation in the ceiling, underfloor and walls of their property within their Tenancy Agreements.  Based upon this information being provided, Tenants will be able to make more informed choices when choosing where to live in the future.

carryinginsulation

What Irelands will be doing next……

We will be working with our Property Owners in order to ascertain what insulation is installed at their tenanted property.  If Owners are unsure, we will be happy to arrange an insulation assessment of their property including recommendations to meet the minimum standard to be imposed.

Irelands recommend the services of the Community Energy Action Charitable Trust (CEA) who are assessment specialists.  The CEA also have the knowledge and understanding of the various Government subsidies, including excellent discounts, available to Tenants who hold community services cards and are over the age of 65.   Property Owners/Landlords can take advantage of these subsidies/discounts when installing insulation.   This means the associated costs are reduced if it is necessary to complete work to meet the proposed minimum standards required under the Residential Tenancies Act 1986.

Irelands will be updating our Tenancy Agreement to incorporate a statement advising Tenants of the standard of insulation present at their property to assist our Owners meet their legislative requirements and avoid any possible infringements.

 

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Smoke Alarms

Caroline Ireland, General Manager and two of Irelands’ Senior Property Managers, Jane Burnand and Vicki Law, attended the REINZ Residential Property Management Conference held recently in Auckland.  At this conference the Fire Service spoke about the importance of fire alarms.  We were advised that 90% of houses which experience a fire are tenanted properties.  This is quite a frightening statistic therefore installing smoke alarms is not only ensuring the safety of your tenants’ lives but is protecting your investment.

The new changes state that smoke alarms will be required in all tenanted properties from 1st July 2016. The regulations will make Property Owners/Landlords responsible for ensuring an operational smoke alarm is in place and that Tenants are responsible for replacing batteries or notifying Landlords of defects.  Long life (10 year) photoelectric alarms will be required where there is no existing alarm or when replacing an alarm in the future.

What Irelands will be doing next……

Even now, when our Property Managers carry out quarterly inspections they are encouraged to check there are smoke alarms present at the property.  If it is identified these are not installed, they highlight this to the Owner and co-ordinate to have alarms installed.

We are looking to work with a company, SATS (Smoke Alarm Testing Services) who we recently met at the REINZ conference.  SATS (www.sats.co.nz) works with many Property Management companies and have an excellent competitive offering.  They ensure tenanted properties achieve maximum compliance on an annual basis and are well positioned to assist Owners meet their obligations from 1st July 2016.  Watch out for more information on this offering which we will be promoting soon.

Important Message to Property Owners/Landlords

It is important to note that the enforcement of the changes to insulation and smoke alarms could result in possible prosecution if not adhered to.   Nick Smith, the Building and Housing Minister has stated that “The Ministry of Business, Innovation and Employment will have new powers to investigate and prosecute Landlords for breaking Tenancy laws as part of these reforms, particularly where there is risk to the health and safety of Tenants.  The changes will also ensure Tenants can take concerns to the Tenancy Tribunal without fear of being evicted for doing so.”[1]

Abandoned Properties

Having a Tenant abandon a property is one of the most frustrating things to happen to an Owner/Landlord as the financial cost can be high with no income being produced from their investment property.  It is uncommon however when it happens it requires significant work by the Property Manager/Owner to ensure the property is made habitable and re-tenanted again.

An amendment to the Residential Tenancies Act 1986 will include the introduction of a new 10-day process which will enable re-tenanting of properties where a Tenant abandons a property with no intention of returning.  We are very excited to see this new change put in place as it will allow Irelands’ Property Managers to act quickly to minimise the impact on the Owner’s income.

For additional information on these changes, refer to Ministry of Business, Innovation and Employment – Changes to the Residential Tenancies Act.

We are interested in hearing what you think of the proposed changes.  Make a comment, send us an email or if you would like advice on these changes (no obligation), feel free to call Caroline and the Irelands team on Ph 03 377 2090.
[1] beehive.govt.nz, 9th July 2015

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Changes coming soon for Insulation and Smoke Alarms – September 2015