Better deal will hit landlords

Dan Lusby, Tauranga Rentals owner, says the new rental requirements may force out some landlords.

Tauranga landlords and property investors say the Government's decision to tighten rental-property requirements meant great news for tenants, but an added expense for landlords.

Every rental property in New Zealand will have to be fully insulated and fitted with smoke alarms within four years, the Government confirmed yesterday.

Housing Minister Nick Smith announced plans to strengthen residential tenancy laws, including requirements for landlords to provide smoke alarms and insulation, and to declare the standard of insulation on tenancy agreements.

"The new law will require retrofitting of ceiling and underfloor insulation in rental homes over the next four years," Dr Smith said.

The requirement would apply from July for Government-subsidised social housing and from July 2019 for all other rentals including boarding houses.

Tauranga Rentals owner Dan Lusby said though great news for tenants it would be expensive for rental owners.

"I don't know how that's going to play out for those who can't afford it, whether that means they have to sell up and get out of the business, I don't know," Mr Lusby said.

But the health benefits tenants would receive from living in a well-insulated home would be substantial, he said.

"From a tenant side of things, it'll be really good for their health. If we can get rid of mould and dampness in houses - that's really great. They'll have healthier children, they'll be able to do their jobs better and it'll be cheaper for them to heat their houses.

"They'll also stay longer in their houses too, which is benefit of the owners as well."

Mr Lusby believed the only way the new requirements could be enforced would be from Government subsidies.

Dr Smith said landlords would save money in the long run from investing in insulation. They could seek a subsidy through the "Warm up New Zealand: Healthy Homes" scheme, but funding for that was only guaranteed until June.

There would be some exceptions, such as in houses where it was physically impossible to retrofit insulation.

Smoke alarms would be compulsory from July, and he said smoke alarms would save three lives every year.

Property Investors Association president Grant Harris welcomed the rental requirements over the previous Warrent of Fitness trial, but said the expenses were not encouraging for landlords.

"My preference would be for Government to incentivise with landlords rather than opposing regulations on them and that's the way of keep the costs to a minimum for everybody."

A Cabinet paper showed Dr Smith deemed a "Warrant of Fitness" trial for homes less cost-effective "for tenants, landlords or society".

Dr Smith said the Ministry of Business, Innovation and Employment will have powers to investigate and prosecute landlords for breaking tenancy laws as part of the new reform, particularly if there is risk to the tenants' health and safety.

"The changes will also ensure tenants can take concerns to the Tenancy Tribunal without fear of being evicted for doing so."

A total of 180,000 New Zealand homes required insulation and 120,000 needed smoke alarms.

"The health benefits of this will be reduced hospitalisations from circulatory and respiratory illnesses, reduced pharmaceutical costs, and fewer days off work and school," Dr Smith said.

New rules
•All rental properties must be insulated by July 2019, though exemptions apply to nearly 100,000 homes.
•Smoke alarms must be installed in all rentals from July 2016, but tenants will be responsible for replacing batteries and notifying landlords of defects.
•New powers to prosecute landlords for breaking tenancy regulations, particularly where tenants' health and safety is at risk.
•The changes ensure tenants can take concerns to the Tenancy Tribunal without fear of retaliatory evictions.