Healthy Homes Standards will drive up rents – Simon Bridges
The new Healthy Homes Standards to make rental properties warmer and drier have been announced but National leader Simon Bridges says they will drive up rents.
The standards set minimum requirements for heating, insulation, ventilation, moisture and drainage, and draught stopping in residential rental properties.
Bridges says while the standards are well intentioned, it will be tenants who will ultimately pay for the improvements.
“What I do know is if you do all this in one big bang, say, ‘Right, let’s pile all this on,’ … there’s thousands of dollars of cost – who’s going to pay that? It won’t be the landlord,” Bridges told TVNZ.
The new standards are:
• All rental homes will be required to have a heater that can heat the main living area to 18oC.
• Rental homes must have ceiling and underfloor insulation that either meets the 2008 Building Code insulation standard, or (for existing ceiling insulation) has a minimum thickness of 120mm.
• Rental homes will also be drier under these changes as kitchens and bathrooms will have to have extraction fans or rangehoods.
• Where rental homes have an enclosed subfloor space property owners will need to install a ground moisture barrier to stop moisture rising into the home
• The standards also reinforce existing law that says landlords must have adequate drainage and guttering to prevent water entering the home.
• Draughts that make a home harder to heat will have to be blocked.
Housing Minister Phil Twyford said making sure all New Zealanders had warm, dry homes was one of the most important public health changes the Government could make.
“The standards are pragmatic, enduring and don’t impose an unreasonable burden on landlords and industry while being mindful that renters need to have warmer and drier homes as soon as possible,” Twyford said.
The next step is for the standards to be drafted in regulations and approved by Cabinet. The regulations will become law by mid-2019.
Compliance timeline for the new standards:
• 1 July 2021 – From this date, private landlords must ensure that their rental properties comply with the Healthy Home Standards within 90 days of any new tenancy.
• 1 July 2021 – All boarding houses must comply with the Healthy Home Standards.
• 1 July 2023 – All Housing New Zealand houses and registered Community Housing Providers houses must comply with the Healthy Home Standards.
• 1 July 2024 – All rental homes must comply with the Healthy Home Standards.
Insulation uptake increases, but thousands of landlords could still miss deadline
Landlords appear to be upgrading properties ahead of a July deadline for mandatory insulation, but not quickly enough to clear a backlog projected by the government.
Government-funded insulation grants for landlords ended last June. In November the Ministry of Business, Innovation and Employment estimated that, as of February last year, there could be almost 173,000 private rental properties still needing upgrading, reports BusinessDesk.
Smart Energy Solutions, the country’s biggest home energy efficiency company, says there has been an increase in business from landlords.
But director Paul Thomson said the uptake was nowhere near enough to meet the projected shortfall by the July 1 deadline. From that date rental properties must meet the 1978 standard for ceiling and underfloor insulation where practicable.
“The uptake has increased but is still not what we had budgeted for,” said Thomson, himself a landlord. “We thought there would have been much greater uptake.”
Landlords face fines of up to $4000, payable to tenants, if they fail comply with the 2016 Insulation Regulations.
Landlords and property managers criticised for checking bank statements
Landlords and property managers are being criticised for asking prospective tenants for their bank statements when vetting for new tenancies.
NZ First MP, Darroch Ball, said the practice is exploitative and risks being used as a mechanism for discrimination.
“It only serves to prejudice tenants who have very little choice about the demands if they are competing for a home,” Ball said.
Housing Minster Phil Twyford said that it wasn’t necessary illegal but said it should be.
“When property managers or landlords request that information they are skating very close to the line of discrimination,” Twyford told media.
Tenancy.co.nz legal consultant Scotney Williams said there are other ways to get the necessary information from a prospective tenant.
“Property managers and landlords simply need to know that the tenant has the money and can pay the rent on time,” Williams said.
“A previous landlord reference, a payslip or bank statement showing your wages going in every week or your rent going out every week is enough in most circumstances.”
“But a bank statement could be a useful way of showing you’re a suitable applicant if you have no prior history of being a tenant. This could be appropriate for a first-time tenant or someone who is new to the country.”
Landlords and property managers have other vetting methods they can use including credit checking and background checking.
Tenants claim landlords are failing to prepare for Healthy Homes Bill
Less than a year out from the introduction of new healthy home laws for rental accommodation, almost 60% of landlords had done nothing to prepare for the changes, according to a new survey.
The HRV State of the Home Survey, found 58% of tenants said their landlords were yet to make any changes ahead of the Heathly Homes Guarantees Act coming into effect in July 2019.
The new law will require minimum standards for heating, insulation, and ventilation in rental homes to ensure properties are warm and dry, although regulations for heating and ventilation are yet to be released.
“The first question I have is – how can one prepare for legislation that has not yet been confirmed or released?” asked head of Ray White property management Zac Snelling.
“While it is safe to say that this Bill will outline new or updated requirements for heating, insulation, internal temperatures and more, we are yet to see any detail on exactly what is required of us and our landlords.”
It’s understood, the regulations for the Healthy Homes Bill are set to be released sometime this month.
So not surprisingly, just 1 in 10 landlords had installed new heating, and fewer still had talked to tenants about making their home drier and warmer.
The response was different when landlords were asked the same questions, with 16% saying they have done or are planning to install new heating and 17% saying they had consulted tenants about the new regulations.
The survey of more than 1000 respondents, which was commissioned by HRV and done in association with AUT Professor of Sociology, Charles Crothers.
Professor Crothers said many landlords were under prepared for the new law, and while a third planned to put in new insulation, the need to make changes was not a priority for well over a third of landlords who said they planned to do nothing.
“Insulation is great, but the new laws are far wider reaching with requirement for ventilation and heating options. It will mean extra costs for landlords, however on the flipside these improvements, and making a home warm and dry, will be good for the condition of the house in the long term,” Crothers said.
“It has to be seen as an investment in their tenant’s well-being and into the longevity of their property.”
The survey found 63% of Kiwis would like to be living in a warmer and drier home – with renters it’s even higher at 75%, compared to only 57% of homeowners.
Professor Crothers said renters were significantly more likely to suffer from condensation, cold, mould and dampness than homeowners.
Tenancy Tribunal awards Wellington landlord Airbnb profits minus ‘service fee’
The landlord of a Wellington apartment has been awarded the tenant’s profits from Airbnb.
The tenant, Jeff Walter Patterson, had illegally sublet the Bellagio apartment, in central Wellington, on 54 occasions over six months.
It’s believed Patterson made more than $12,450 but only $2,150 of those profits have been awarded to the landlord because the Tenancy Tribunal took into account net profit and ‘services fees’ the tenant would have incurred.
“After deducting rental over the 6-month period, then the potential profit would reduce to $3150,” Tenancy Tribunal adjudicator Rex Woodhouse wrote in the order.
“It can be accepted that in commercially renting the premises, as the tenant has done, then it is likely other costs would have been incurred, such as costs for linen and servicing of the apartment, as well as the tenants administration of the premises.”
“In the absence of more accurate costing’s being presented, I will apply a nominal amount of $1000 for those costs. The remainder ($2,150) I will accept as a net profit figure for which any claim could be based.”
The tenant had signed an agreement that said the property could not be sublet, including Airbnb and similar platforms, without the landlord’s consent.
The landlord’s lawyer successfully sought an account of profits by demonstrating it was unreasonable to allow the tenant to profit from a breach of the tenancy agreement.
Keith Powell, from Nice Place Property Management, says it’s not the first-time people have tried this.
“I’ve never seen anyone do it so deviously and so purposefully, his lease agreement specifically said no Airbnb,” Powell told Newshub.
It’s understood that this is the first time in New Zealand that the Tenancy Tribunal has awarded a landlord the profits from a tenant’s sub-leasing, rather than just exemplary damages.
“There is a strong public interest, and interest for the landlord, in tenants not subletting premises without consent, as has occurred in this case,” adjudicator Woodhouse wrote in the order.
On top of the profits, Patterson was also ordered to pay unpaid rent, damages for abandonment, sub-leasing, replacing locks and costs for door replacement.
Landlords blame extra costs as rents skyrocket
Extra landlord costs are being blamed for higher rent prices around New Zealand.
Just released March rental statistics show that New Zealand rental prices have continued to grow over the past year.
“There have been so many cost and regulatory increases over the last few years that it isn’t a surprise that rental prices are increasing as they are” said NZPIF Executive Officer Andrew King.
“Unfortunately the situation looks likely to continue.”
In order to remove monthly variations, the NZ Property Investors’ Federation has averaged three months of rental prices for the year ended March 2018 and compared this to the same period in 2017.
Overall, rental prices are up 6.1% to $433 per week. This is a higher price rise than during the last two years when rental prices increased 3.4% in the year to March 2017 and 3% in the year to March 2016.
Hutt Valley had the largest increase at 17.1% to $413pw. However this area can be quite volatile due to low numbers of new rentals. Porirua was next with an 11.6% increase to $407pw, although Porirua statistics can also be quite volatile. Wellington Central rents increased by 6.8% showing that the region overall had the highest rental price increases.
Nelson saw the third highest rental price rises at 9.2% to $382.
Auckland rental increases ranged from 4.2% in Waitakere to 5.2% on the North Shore.
Twelve of the 17 main areas had rental price increases below the national average, indicating that rental price increases in the regions are growing quite strongly.
In Christchurch, rental price falls over the last few years appear to have bottomed out. While the 3.8% increase in Christchurch rental prices to $386 is lower than the national average, it is the first time that rental prices have shown an increase since 2014.
Landlord fined $4,100 for failing to have working smoke alarms and non-compliant gas supply
A Christchurch landlord has been ordered to pay $4,100 after a non-compliant gas supply and non-working smoke alarms were found at one of her properties.
Lina Liu, the landlord of two boarding houses, was taken to the Tenancy Tribunal by MBIE’s Tenancy Compliance and Investigations Team (TCIT) for failing to meet her responsibilities under the Residential Tenancies Act (RTA).
“Following complaints of a gas leak at one of the boarding houses, the gas supply to the property was found to be non-compliant. When the TCIT team looked into Ms Liu’s operations, it was established that Ms Liu failed to have working smoke alarms at both of her properties and there were no written tenancy agreements with insulation statement in place,” National Manager Tenancy Compliance and Investigations Steve Watson said.
The Tenancy Tribunal Ordered Ms Liu to pay $4000.00 in exemplary damages for these health and safety breaches, and additional $100.00 for failing to provide a written statement that adequately described the levels of insulation – a legal requirement that came into effect from 1 July 2016.
“Insulation statements were introduced to give tenants certainty and choice when it comes to choosing which rental house to live in. The lack of understanding in this area is something we see a lot in our work – it is great to see the Tribunal support the importance of these statements,” Mr Watson said.
“Just as important as the financial deterrent, the Tenancy Tribunal issued an Order that allows TCIT to return to the property to ensure the gas work has been fixed, which will ensure future tenants can safely live in the rental.”
The Tribunal Order also issued a restraining Order for two years, which means if Ms Liu is found to breach the law again in that period, she could face criminal charges in the District Court.
“Landlords need to comply with the provisions of the RTA and not put tenant safety at risk through poor maintenance and ignoring the law. The Tenancy Tribunal Order rightly stated that smoke alarms ‘go to the very heart of tenant safety’.
“Securing this type of Order highlights the important work the Team is doing across New Zealand to hold landlords who seriously breach the RTA to account,” Mr Watson said.
Wellington focus needed for tenancy reform
A report on New Zealand’s housing market needs better analysis of the Wellington rental market to identify long-term solutions that will ease pressure on the city’s rental stock.
A Stocktake of New Zealand’s Housing released by the Government this week points to trends that show 70% of the new households formed over the past decade and 574,000 homes in New Zealand are renters. The Government commissioned the report in late 2017 to better understand the problems facing the housing market.
The report has taken a holistic view across New Zealand and identified improved housing supply as a critical factor in easing pressure on the rental market. As recently as December both the Housing Minister, Phil Twyford, and Wellington Mayor, Justin Lester met to discuss addressing the housing shortage in the Capital, agreeing a solution was needed for Wellington.
Grant Foggo, Director of property management company Comprende, says the report would have benefited from a closer analysis of the Wellington rental market, to identify specific local issues and guide future policy and strategy.
“The report makes reference to things that aren’t common in Wellington – for example, sales of homes, requiring the end of the resident’s tenancy, and constant rental increases,” Mr Foggo said.
“This does not reflect our knowledge of the city’s market – and suggests the authors have mostly turned their attention to areas like Auckland to make their conclusions. It’s important we are a relevant part of the conversation.”
“Better understanding of why people rent in Wellington is also needed. We are slightly different in our local market and attract a broad range of people – for example, we have a large student population, a number of foreign workers who are drawn to the city to work in our vibrant creative sector, as well as many who relocate to the capital for work opportunities. 12-month term tenancies are preferred by both owners and property residents.
It’s likely Wellington’s housing market will experience significant changes over the next few years, with both the Government and the Wellington City Council indicating a Housing Accord is being considered for the Capital.
“With possible changes to zoning, and potentially building ‘up’ instead of ‘out’ in the suburbs, we need to make sure we understand as much as we can about our local housing market now. This will help us make better decisions for the future – delivering a supply of housing that meets the needs and demands of Wellington,” Foggo said.
Tax extension to dampen property speculators
Revenue Minister Stuart Nash has confirmed the bright-line test on residential property sales will be extended from two years to five years in legislation currently making its way through Parliament.
Mr Nash will introduce a Supplementary Order Paper to the Taxation Bill to give effect to the changes, which were signalled prior to the election.
“The extension of the previous government’s bright-line test will help dampen property speculation and make homes more affordable,” Mr Nash said.
“The previous government required income tax to be paid on any gains from residential property sold within two years of acquisition, with some exceptions.
“The extension means that profits from residential investment properties which are bought and sold within five years will generally be taxable.”
The extension to the bright-line test will apply to residential investment properties purchased from the date on which the bill receives the Royal Assent, which is expected in March.
The passage of the bill will also enable the Tax Working Group to factor the change into any consideration of a comprehensive capital gains tax.
“This proposal will ensure that residential property speculators pay income tax on their gains and makes property speculation less attractive. We need investment which grows the economy and creates jobs, not the sort of investment which distorts the residential housing market. This measure will bring fairness back into the tax system,” Nash said.
“Reducing speculative demand will also help improve housing affordability for owner-occupiers. Current exemptions from the bright line test will remain. This includes the exemption for the main home of owner-occupiers of residential property.
Time to punish landlords who exploit tenants with unfair rent rises – Robertson
Finance Minister Grant Robertson has called for Wellington tenants to dob in dodgy landlords who are unfairly raising rents.
As students return to Wellington, the rental housing market is heating up and some landlords appear to be significantly raising rents to take advantage of student allowance increases.
“My office has heard from Wellington renters who have suddenly had their rent increased by $50 a week – exactly the amount that the maximum loan living costs will be increasing by this year,” Robertson, who is the Wellington Central MP, said.
“There are other stories of rent auctions and supplementary payments that are adding to the squeeze on renters.”
“Landlords will increase rents from time to time, but this should be fair and reasonable. These kinds of rent increases look like exploitation, and like they are taking advantage of a group of vulnerable people in a tight market.”
While it’s currently lawful for landlords to raise rents to reflect market rates, Robertson says those who cross this line should be punished.
“The Government is committed to working with the Wellington City Council and private developers to increase the supply of rental accommodation. We are also reviewing the Residential Tenancies Act to improve the rights of renters. But these steps will take time, he said.
“In the meantime, tenants who are experiencing these unfair rent rises should get in touch with my electorate office. It is important to find out which landlords are taking advantage of their tenants, and then take action to expose this, and where possible to stop this practice.”