RENTAL REFORM

The Healthy Homes Guarantee Bill (No. 2) passed into law on the 30th November 2017, resulting in changes to the minimum standards of heating, insulation, ventilation and drainage of every rental home in New Zealand.  This bill amends the Residential Tenancies Act 1986.

When will it come into effect?

The new standards will be set out by The Ministry of Business, Innovation, and Employment (MBIE). The exact details of the bill will be established before 2019.  Landlords must ensure they meet the standards for all new tenancy agreements within a year of the Act coming into force. Within 5 years, all rental homes must meet the standards.

Mandatory heating:

It is likely that the MBIE will set specifications around a compulsory heat source, how the house will be ventilated and how to maintain a minimum temperature.  There are talks that the MBIE may even dictate that all houses must have heat pumps as the chosen source of heat. However, this may not be a practical solution for all New Zealand homes. Some tenants won’t be able to afford the use of a heat pump and may not even choose to use it. A better solution would be to have a variety of approved heat sources to suit different property types.

Costs:

It is likely new builds will be less affected by these changes but the cost for some landlords with older rentals could be huge. There are some landlords who have recently improved insulation to meet the previous compulsory standards which was required by 1st July 2019. These landlords may now have to top up again. However, some landlords may be eligible for heating and insulation grants.

Another thing to consider is compliance. How are houses going to be checked to ensure they are adhering to the new standards?

Despite all of this, it is important for all landlords and property managers to understand the new legislation and adapt accordingly.