Insulation, smoke alarms required in tenancy law changes

Housing and Building Minister Nick Smith (Photo: Simon Wong)
Housing and Building Minister Nick Smith (Photo: Simon Wong)

Changes to tenancy law will mean houses will need to be better insulated and require smoke alarms, however there are a few exceptions, the Government has announced today.

Housing Minister Nick Smith says the Residential Tenancies Act will be amended to also include better enforcement and faster resolution of abandoned tenancies.

Changes would come into force for social housing that is heavily subsidised by the Government from July 1, 2016 and from July 1, 2019 for other rental housing including boarding houses.

The insulation change will affect 180,000 homes, while 120,000 more homes will have smoke alarms.

"This pragmatic package of tenancy law changes will make homes warmer, drier and safer for hundreds of thousands of New Zealand families without imposing excessive bureaucracy or cost," Dr Smith says.

The changes are more efficient in improving housing standards than a warrant of fitness for homes Opposition parties have been calling for, Dr Smith says.

Dr Smith says Government advice shows rents will likely go up about $3.20 per week as a result of the changes.

However, he said there was nothing stopping landlords from putting rents up higher than that.

"Landlords can use all sorts of reasons, with or without this package, to put rents up," he said.

Exemptions will be in place for houses where it is "physically impractical" to retrofit insulation because of limited underfloor or inaccessible raked ceilings.

From July 1, 2016, all landlords will be required to state in tenancy agreements the level of ceiling, underfloor and wall insulation and to make sure there are operational smoke alarms inside properties.

Tenants will be responsible for replacing batteries and telling the landlord of any defects.

Long-life photoelectric alarms will be mandatory where there is no existing alarm or when replacing an existing one.

Dr Smith says the insulation requirements are the "next logical step" after the Government programme to retrofit insulation in state homes and grants under the Warm Up New Zealand programme.

New powers will be given to the Ministry of Business, Innovation and Employment to investigate and prosecute landlords for breaking tenancy law, particularly in relation to health and safety of tenants.

Dr Smith says the changes will ensure tenants can take concerns to the Tenancy Tribunal without fear of being evicted for doing so.

He says the law as it stands doesn't give the ministry the ability to deal with "bad apple landlords which are a small minority".

A new 10-day process will also be introduced to allow a re-tenanting process where the tenant abandons the property without the intention to return. The current process takes up to six weeks.

Retrofitting insulation is expected to cost $600 million, with benefit of $2.10 per dollar spent. Smoke alarms, while much cheaper in comparison at $7 million, will provide a $15.10 return on every dollar.

Cabinet agreed to the changes on Monday and will be included in a Residential Tenancies Act Amendment Bill which will be introduced into Parliament on October.

Consultation on the regulations on the insulation and smoke alarm changes will be done in a select committee process.

The Green Party believes the Government should re-commit to its memorandum of understanding on the Warm Up New Zealand programme.

Co-leader Metiria Turei says insulation and smoke alarms are "just two small steps" to keep tenants safe and healthy in their homes.

The Warm Up NZ scheme, which the Government abandoned in 2013, should be reinstated because it achieved real results in insulating 235,000 homes, Ms Turei says.

"Insulation and working smoke alarms are not in themselves going to fix the appalling state of rental stock in this country, or prevent New Zealanders from getting sick from their cold, damp homes this winter.

"If this Government is only willing to do the bare minimum for renters, then they at least owe it to renters to do a good job of it."

The NZ Property Investors Federation believes the proposed changes are "reasonably balanced", allowing better standards for tenants without a reduction in rental property supply or excessive rent increases.

Executive officer Andrew King says while the Government's announced reforms would put pressure on rental prices, it would be "significantly less" than the warrant of fitness which is expensive to administer and comply with.

Landlords will also need to school up on their knowledge of the Residential Tenancies Act and the consequences for breaching it, he says.

Members of the federation and other association around the country can buy the photoelectric alarms for a discounted price of $25 down from the regular $45.

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