Published 1 July 2016

Changes to the Residential Tenancies Act

Changes to the Residential Tenancies Act came into effect today and set a new standard for insulation in rental properties.

 It’s good news for tenants and landlords in establishing baselines for a healthy home, and is a real sea change on energy efficiency. Sustainability Trust chief executive Philip Squire shares his views.

Changes to the Residential Tenancies Act are good news for tenants and landlords in establishing baselines for a healthy home.

The main updates to the Act include:

• All new tenancy agreements must have a statement on the depth, condition, and extent of the insulation in the ceiling, underfloor and walls

• All properties must have smoke alarms installed – one on each floor and at least one within three metres of every bedroom

• By 1 July 2019 insulation must be installed in the ceilings and underfloors of all rentals that have accessible ceilings and underfloors

This is a real sea change. Ministry for Business, Innovation and Employment (MBIE) estimates there are at least 180,000 properties that will need to be insulated over the next three years.

We think that’s a bit on the light side and the number could even be double that.

Based on our knowledge of the rental market and the number of homes that, even if insulated are likely to be below the government insulation standards, we expect any property that hasn’t been insulated within the last ten years under a government programme will not be compliant.

That’s a tremendous amount of work.

As a landlord or a tenant, we think you would be well advised to get in early and make sure your properties are compliant.

We are providing landlords with a service that includes a Rental Asset Report that outlines the levels of insulation in the property. We also assess any heating and ventilation/dampness issues.

If the property meets the standard we will provide a Certificate of Compliance to attach to the property records. If not, we will provide documentation to show what failed and provide costings to bring it up to the Act.

The Trust is taking the regulatory requirements very seriously and are assessing homes against the NZ Insulation Standard. We are also aware that regulations contained in the Housing Improvement Regulations (HIR) may be given some teeth in the near future – this piece of legislation has two applicable clauses:

1. An approved heating source must be provided in the living area of every house

2. The house must be free from damp.

We expect that local and central government will be looking closely at both the RTA and HIR to ensure rental homes come up to a minimum standard for healthy homes.

Wellington City Council and Dunedin City Council are also planning on bringing in a rental Warrant of Fitness within the next year which will focus on these areas as mandatory requirements.

There have also been changes to the EECA Warm Up New Zealand: Healthy Homes scheme, which provoides subsidies for insulation. You can check if your property might be eligible for the subsidy on the Energywise website.

We are very happy to provide landlords with advice on their obligations under the RTA and HIR and look forward to continuing to warm up Wellington homes.