Property management involves a lot of risk, and at Auckland Property Management our focus is on risk reduction strategies for our owners. Part of this service includes monthly property investment seminars on topics of interest to our clients.
Our second property investment seminar of 2019 was held on 2nd May and was a great success with attendees representing both current clients and private property investors.
This seminar covered the legislation passed in December 2017 as the Healthy Homes Guarantee Act and the newly released housing standards for the Act with specific focus on heating, insulation, ventilation, moisture barriers and draught stopping.
After a brief overview of the Act, the floor was opened to Scotney Williams from The Tenancy Practice Service (TPS). Scotney is a highly experienced consultant on tenancy law and property management and provided the legal interpretation of exactly how this new Act may affect landlord obligations, in order to help remove some of the confusion currently facing investors.
It is important to note that tenants have the right to inspect homes they rent to ensure they are compliant, including checking with third parties such as insulation and heating professionals. In extreme cases tenants can also lodge a case with the tenancy tribunal for action (which may cause landlords to face a $4000 compliance fine).
Below follows the brief overview of the Healthy Homes Guarantee Act and what was discussed at the latest seminar.
Rental properties must have a fixed heating device capable of achieving a min temp of 180C in the living room only. This is the minimum recommended indoor temperature that adults should be living in according to the World Health Organisation.
The Government plans to release an online tool that will help determine the heating device needed for living rooms. This will allow you to input the living room size, number of windows, insulation levels, and from these parameters then determine what sort of heater is needed. The online tool aims to provide a printout of variables and the minimum capacity of the heater. This printout can be used to show compliance with the heating standard.
What can you do now? It’s safe to install a heat pump or wood burner, as both devices have been earmarked as acceptable and will meet the standard. BUT investment in any other heating device should be delayed until further information is released e.g. smaller electric heaters may be acceptable in smaller living rooms or apartments, so landlords should wait until further details and clarification on the heating requirements are released. More information on the preference for fixed heating devices to maintain the minimum indoor temperature required can be found here.
Compliance at 1st July 2019 means adhering to the 2016 insulation requirements and having a rental property with no less than 70mm of ceiling insulation and complying 1.3 R-Value underfloor – both in good condition.
Under the Healthy Homes Standards, all rental properties will need to have insulation that either meets the 2008 Building Code for new properties (120mm of ceiling insulation and 1.3 R-Value underfloor) or for existing ceiling insulation have a minimum thickness of 120mm by 1st July 2021. All existing tenancies must be compliant with the 120mm standard by 1st July 2024. All new tenancies commencing after 1st July 2024 must be compliant within 90 days of the tenancy start date.
What can you do now? Assess your home through certified insulation providers and work out a plan of action from the results – does the insulation need topping up, does it need replacing, or does it meet the requirements already? It is also a legal requirement that Tenancy Agreements have an insulation statement outlining what insulation is where and the condition it is in.
Rental properties are to include openable windows in living rooms, dining rooms, kitchens and bedrooms. The window area must equal 5% of the room’s total floor area.
An appropriately sized extractor fan must be installed in rooms with a bath, shower or indoor cooktop. Estimated cost of an extractor fan can be $200 to $300.
If there are sufficient windows that can be opened in rooms, then an extractor fan may not be required. It is advised that landlords hold off on purchasing anything until further details are released on the type of extractor fans and how powerful the air flow needs to be.
What can you do now? Install extraction fans in bathrooms and kitchens although it is advised that Landlords hold off on this for now. Note that the switchboard may require an upgrade prior to installation.
Damp homes promote mould and dust mites which can cause respiratory problems for those living in the property.
Landlords are required to ensure rental properties have efficient drainage and guttering, downpipes and drains. If a rental property has an enclosed subfloor it must have a ground moisture barrier where possible to install one. Enclosed subfloor means that the airspace under the floor is enclosed between the ground and the floor level by walls which have only subfloor vents.
What can you do now? Ground moisture barriers are an effective and low cost retrofit option (approx. $800). This will prevent the possibility of moisture seeping into the property from below the house and in turn cause mould issues.
Landlords must stop any unnecessary gaps or holes in walls, ceilings, windows, floors and doors that cause noticeable draughts. All unused chimneys and fireplaces must be effectively blocked off.
What can you do now? The soon to be published guide from the Ministry of Housing and Urban Development on the Healthy Homes Guarantee Act will detail reasonable thresholds and how to stop common draughts. In the meantime, look at common areas that may require stopping such as unused chimneys, fireplaces, gaps in windows and doors.
The Healthy Homes Guarantee Act ensures rental properties meet minimum standards in insulation, heating and ventilation. This bill is a duplication of the amendments to the Residential Tenancies Act; for example insulation deadline according to Residential Tenancies Act July 2019 and Healthy Homes July 2025.
Tenancy Agreements will require a heating statement similar to the insulation and smoke alarm statements once the Healthy Homes Guarantee Act comes into effect. There is an expectation that it will become a legal requirement for all rental properties to have a heat pump within the next 5 years.
Auckland Property Management is your partner in risk assessment; talk to us today for a free no obligation rent income assessment, an update on current market conditions and / or to arrange a property health check. In addition we have access to certified industry specialists in the specific areas covered by the Act who can assist you with ensuring your rental property is compliant.
Property investment is best when everything is running smoothly, our focus on reducing or removing your risks will ensure it does. Contact Toni Heath on 021 894 546 or [email protected] to book in a free rent income assessment and property health check.
If you have any questions relating to the topics outlined above then please email Toni Heath on [email protected].
APM will be holding more events like this in 2019. If there are specific topics you would like to hear about then we would love to hear from you. Email Lana on [email protected] with your suggestions or if you would like to be added to our seminar mailing list.