Otago Property Investors Association Inc

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23-04-2016

Minimum standards confirmed

The Minister of Housing, Nick Smith, has announced the final look for regulations introducing minimum standards for rental properties. The actual title of the Bill is the Residential Tenancies Amendment Act.

The new rules will now be put forward to parliament for a second and third reading, but in all likelihood will become law in the final structure announced by the Minister.

The NZPIF is pleased that the Select Committee and Government have agreed with the NZPIF on insulation and smoke alarm standards and reporting requirements for insulation. We were surprised, however, that penalties for not complying with the new regulations and retaliatory action by a landlord were increased.

The development of the Act has occurred at speed, however this doesn't appear to have resulted in poor design.

Following the first reading in December 2015, the Social Services Select Committee considered the Bill and reported back to the House on 8 April 2016 with its recommendations.  The Committee received 706 written submissions and heard 57 oral submissions, including those from the NZPIF. Having considered the submissions, the key changes to the Bill proposed by the Select Committee were:

  • Higher maximum payments for two unlawful acts in the new Act. 1) Where a landlord fails to comply with their responsibilities regarding smoke alarm and insulation requirements (increased from $3,000 to $4,000); and 2) where a landlord issues retaliatory notice to tenants who ask landlords to comply with their legal obligations (increased from $2,000 to $4,000).

  • landlords be given a specific power of entry to install smoke alarms and insulation, in the same way that landlords can have the power of entry to do repairs and maintenance. 

  • For buildings where the insulation details are unknown and the landlord has made all reasonable efforts to obtain the required information, they are able to make a statement to this effect.

  • That although landlords should install smoke alarms and replace them when they break, tenants will be responsible for replacing batteries.

    The key points of the Bill confirms that rental properties will have to have smoke alarms by 1 July 2016 and insulation installed by 1 July 2019.

    Rental properties with existing insulation will need to be at 1978 standards as a minimum, which will save many rental property owners from making expensive upgrades for a very minor improvement in insulation performance.

    Smoke alarms will be required within three meters of any bedroom and in living areas on separate floors of a rental property by 1 July this year. Existing alarms are acceptable for existing tenancies, however for new tenancies after 1 July 2016 the alarms will need to be of the photoelectric type with internal 10 year batteries. (Click here for a NZPIF negotiated discount on smoke alarms that meet the requirements of the new regulations)

Read the Minister's media release here

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