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Why we don't agree with the Latest Regulation Announcement affecting Property Investors

February 25th 2019

With residential investors already having increased insulation in rental homes to meet the new requirements effective 1st July 2019, the latest announcement may seem like get another target against private landlords.

In short, the latest announcement stipulates that the 2008 Building Code insulation standard will be the minimum for rental properties, with other requirements around provision of heating and extraction fans also coming into force.

All rental homes will be required to:

  • - Have a heater that can heat the main living area to 18 degrees Celsius.
  • - Have ceiling and underfloor insulation that either meets the 2008 Building Code insulation standard, or (for existing ceiling insulation) has a minimum thickness of 120 millimetres.
  • - Kitchens and bathrooms will be required to have extraction fans or rangehoods.
  • - Install a ground moisture barrier to stop moisture rising into the home where there is an enclosed subfloor space.
  • - Have adequate drainage and guttering to prevent water entering the home.
  • - Block draughts that make a home harder to heat.

Now all of the above is both good practice and common sense. Good landlords want to look after their tenants, protect the dwelling from moisture by installing a ground barrier underfloor and extraction devices inside, and have heating that is easy to use and keeps the home to a reasonable temperature.

So no argument from Ruby Housing about the intention or implementation of these latest changes.

However, as with many of the proposals landlords have been subjected to over the past few years, this latest one gives only part of the answer.

Our two main objections are:

1. If the concern is around housing quality, and damp cold homes are making people sick, particularly children and vulnerable adults, why is this only being implemented for rental homes?

I have heard many commentators saying if landlords aren’t willing to do this then those landlords will exit the market, and the homes would then be available for first home buyers, as though this is a solution. But surely if the house isn’t fit for purpose as a rental home, how does it then become fit for purpose to a homeowner, without any of the improvements landlords will be required to make. Is a homeowner somehow not affected by a damp, cold, mouldy home, whereas a tenant is? This seems a major flaw in the reasoning, with no-one highlighting the unintended consequences of increasing the burden for landlords.

2. Currently most landlords install extraction devices and heating systems, but many tenants won’t use what is provided, air the house, or even open curtains. The result is a damp, cold home, with mould getting into curtain linings, carpets and paintwork. The cost to landlords to remedy the effect of damp and mould in the building envelope in order to re-let the home is massive; mould treatments, repainting, replacing curtains and even re-carpeting. Currently it is extremely difficult to claim these  costs from the tenant, with the landlord at the mercy of tenants doing what they should to keep the home dry.

If landlords are required to install additional heating systems, moisture prevention and extraction devices, and there are penalties for landlords who don’t comply, why are tenants not required to use what is provided to keep the home warm, dry and mould free, with commensurate penalties for those tenants who won’t do this.

If we agree we want to improve housing stock and prevent the issues of poor health resulting from low quality homes, surely it makes more sense to improve housing stock across the board. Perhaps all homes should be required to meet these insulation and heating standards, with this being checked at the time of sale. This would encompass both private homes and rental housing, and would mean all families then have a warmer drier home to choose from.

Read more here.

If you’d like to find out how Ruby Housing can protect your rental investment, mitigate your risk, and keep you ahead of regulatory requirements, contact us today on 379-5033, or email to office@rubyhousing.co.nz