Patrick Wynne, Law Clerk (Property) at Cavell Leitch, discusses the looming requirement for all residential rental properties to have ceiling and under-floor insulation compliant with the Residential Tenancies Act 1986 and the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016.
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By July 2019 all rental houses must have ceiling and under floor insulation compliant with the national standard. The time bomb is slowly counting down and Richard Arkinstall from the Insulation Association of New Zealand, stated a “survey of its members indicated tens of thousands of rentals would not be insulated on time.”
A warning has been issued by Arkinstall stating simply that within the next 12 months the demand for insulation installation services is going to be too high for the supply.
If rental properties do not have sufficient insulation by 1 July 2019 the punishment for not meeting the deadline is a fine of $4000.00. Although the onus to complain and raise this issue is on the tenant, they will have every motivation to do so, as the $4000.00 fine is to be paid directly to them.
There are two important matters to consider, now that we are within the one-year timeline. Firstly, if a house is on the market and the insulation works have been completed, are the works up to the required standards? Secondly, should real estate agents be advising purchasers if the insulation works have not been completed?
Taking a look at the first matter, the reason behind this due diligence is that the owner, as at 1 July 2019, will be the entity liable for the $4000.00 fine, regardless of who completed the insulation works. As it is entirely legal for landlords to install the insulation themselves there may be very real risk that the insulation does not comply with the insulation standards as set out in this brochure. Therefore, if a rental property is on the market and the current landlord has stated the insulation works have been completed there are two questions that we consider would be prudent to ask:
1. Were these works completed by the landlord or an insulation provider?
2. If they were completed by the landlord, is there proof that the insulation meets the required standards?
In the second situation, where the rental property has not been insulated it appears it is now a race against the clock for landlords to acquire the services required. Therefore, if you have clients who engage in property management services the mantra ‘the sooner the better’ is as applicable as it ever will be. If you deal with clients who own a number of rental properties, delivering this mantra to them will be just as beneficial.
Readers are welcome to contact the author if they have any queries about this article.
Patrick Wynne is a graduate in the Cavell Leitch residential property team and is currently completing his professional legal studies course. Patrick recently graduated from Otago University, gaining a double degree in Law and Commerce. He is a strong communicator and has proven his ability as a forward thinker by creating business opportunities, including his own start-up company, while completing his studies. Patrick is looking forward to building strong relationships with his clients and utilising his problem-solving strengths to assist them with all their legal needs. Contact Patrick at patrick.wynne@cavell.co.nz
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