Auckland Council trawled real estate listings and sent warnings to agents after an investigation exposed the widespread marketing of illegal garage conversions as bedrooms.
The council received more than 40 complaints about so-called "utility rooms" - garages that have been lined and carpeted to look like habitable spaces - following the Weekend Herald report .
It will now run an education campaign to ensure both homeowners and agents are aware of the requirements around creating extra bedroom, kitchen and bathroom spaces and the "potential consequences" - the most serious being prosecution.
"Clearly there is a large amount of misinformation and confusion out there," compliance manager Steve Pearce said.
"We are really concerned about landlords creating substandard living environments for Aucklanders."
The council said it had monitored real-estate listings for mentions of "utility rooms" and had directly written to seven agents to remind them of the regulations for habitable spaces - which require sleeping areas to be insulated and damp-proof and have adequate light and ventilation.
It also wrote to the regulatory body for agents, the Real Estate Authority, with its concerns.
"Whilst the need for affordable accommodation is recognised, it is also important to ensure that the accommodation provided is of a standard that enhances the health and wellbeing of our people and our communities," the council said.
The Herald 's inquiry found dozens of property listings featured conversions termed "utility rooms", which were not consented and therefore could not be advertised as bedrooms under the Building Act.
Despite that, a number of real estate agents advocated renting the utility rooms as bedrooms, and some even staged them with beds.
One agent said a garage had previously been rented for $300 a week, and that while it would be against the Residential Tenancy Act to have a formal tenancy, a landlord could treat the tenants as "flatmates".
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Investors said the garage conversions "added value" to a sale, and that it was well-known that families would sleep there, particularly in South Auckland.
"If they choose to make it a bedroom that's entirely up to them," one investor said.
The practice was slammed by critics. Green Party co-leader Marama Davidson said deliberately getting around council rules to make money was "nothing short of exploitation".
Auckland Councillor Chris Darby - the chair of the council's planning committee - urged the council to investigate further.
He said he was pleased at the follow-up, but he was hopeful council officers would now visit the sites mentioned in the complaints.
"If council is aware of a dwelling in that utility room category that isn't legally established and there's a health and safety risk - I would expect us to act with the knowledge that there's a risk to human life," he said.
Darby said the issue was fraught as it was likely investigations would end in people being left without a home.
"And while building consent numbers are at a high, we need to see the results of that. You can't provide habitation in a consent."
Real Estate Institute chief Bindi Norwell said agents could not mislead a customer or provide false information, and it did not condone marketing utility rooms as an extra bedroom.