Last-minute rush leaves Northland rental properties uninsulated; MBIE warns no extension to deadline

George Marriner, left, and Philip Bowers putting underfloor insulation in a rental property in Maunu. Photo / Tania Whyte Photo/Michael Cunningham

A last-minute rush to comply with new government regulation will result in more than a third of rental properties in Northland left uninsulated.

An upsurge in demand has resulted in a shortage of insulation materials, both for ceiling and underfloor, and those who have booked orders in the past two to three weeks will have to wait at least a month.

The New Zealand Property Investors Federation believes a third of all rental properties won't be able to be insulated in time for the deadline but the Northland Property Investors Association says that figure will be higher in the region.

From Monday next week, a landlord who has not installed ceiling and floor insulation where reasonably practicable will be in breach of the Residential Tenancies Act and may face damages of up to $4000.

Some exceptions to this requirement apply to certain property types that are either physically impossible to insulate, or would require major renovations to do so.

The Ministry of Business, Innovation and Employment (MBIE) said the Act did not allow for extensions, and landlords have had three years to have their rental properties insulated.

Association president Mike Tasker said the rate of non-compliance in Northland would be higher because landlords had left it to the last minute and because of the costs involved.

"Everyone has left it to the last minute. I'd imagine there will be houses that will be sold rather than being insulated because owners just can't be bothered. They've never done it and don't believe in insulation."

Northland Property Investors Association's Mike Tasker said landlords just couldn't be bothered to have their rental properties insulated. Photo / Michael Cunningham

In the past two to three months, Tasker has had to insulate seven of nine rental properties he owns in Whangārei at a cost of $3000 to $5000 per property.

As a rough guide, MBIE said the average cost for a professional installer to put in both ceiling and floor insulation is about $3400, excluding GST, for a 96sq m property.

A larger home will cost more.

Owner of Northland Insulation, Warrick Rusk, said such was the demand it took up to three weeks for insulation to arrive from the manufacturers in Auckland.

"There's a shortage of underfloor and ceiling insulation because most people have left it to the last two weeks, thinking they can have it done easily but it's not that easy.

"It takes half a day to do the ceiling and half a day for underfloor, and that's just one house. I am getting requests to do more than 10 houses a week and I just can't keep up with the demand," he said.

Warrick Rusk, of Northland Insulation, with a limited quantity of insulation amid a surge in demand from rental property owners. Photo / Tania Whyte

There were 11,224 bonds lodged for private rentals in Northland with the Ministry of Business, Innovation and Employment as at May 1, this year.

However, the data does not reflect Northland rental property numbers as a whole, as there may be property owners that do not ask their tenants for bonds.

Vacant rental properties also won't be reflected in the MBIE data.

Bond lodgments from Northland hit the 10,000 mark in May 2013 and the numbers have been climbing steadily since, reflecting the demand for rental properties in Northland.

A woman paying close to $300 for a one-bedroom stand-alone uninsulated house just north of Whangārei uses an electric heater only if it's freezing.

"I am a low-income earner who's worried about my power bill so I just use a blanket, unless it's freezing. The house was supposed to have been insulated but that didn't happen so I don't know when it will happen," she said.

The woman, who preferred to remain anonymous, said although compulsory insulation was a good idea, she feared private landlords might not be able to afford the cost of insulating their properties.

"Homelessness is really bad in Whangārei. I'd hate to think landlords would rather keep their properties empty than foot the cost of insulation. Compulsory insulation may also result in rents rising," she said.

Under the Residential Tenancies Act, landlords with more than one tenancy may face separate damages for each property that doesn't comply.

They will still need to install insulation that meets the correct standard.

Any landlords who still don't comply after paying the penalty, may face further action.

"Having a plan in place will not be enough to protect a landlord them from financial penalties," MBIE tenancy, compliance and investigations acting national manager Peter Hackshaw said.

"With more and more New Zealanders renting, it's important that landlords are meeting regulations and providing their tenants with warm, dry, safe homes.

Any tenant who feels their landlord has failed to meet their responsibilities to have the correct insulation installed by Monday can apply to the Tenancy Tribunal for an order resolving the dispute.