The Ever Changing Rules – Are You Compliant?

Part of being a property investor is staying on top of the legislation changes as they happen and taking action where required to keep you compliant. Today we are running through the largest recent changes which are comprised of 3 parts. We talk through the actionable steps you can take today to make sure you remain compliant.

Smoke Alarms

Insulation

Meth

With our new Labour government we expect further changes to be on the way and we will be covering our take on any new legislation and what it means for you as it happens.

Smoke alarms

As of July 2016 all properties are required to have smoke alarms provided by the landlord.

There must be at least one smoke alarm within 3 metres of every bedroom door.

There must be at least one smoke alarm on every floor of the house, whether there are bedrooms or not.

Existing smoke alarms are acceptable, generally single placed and battery powered.

Any new alarms, replacing worn out existing alarms must be the new photoelectric alarms which should last for 7 years +

These new alarms can be installed by yourself or you can get professionals in who can install and maintain these.

While it is your responsibility as Landlord to purchase and install the alarms, if you have old, normal smoke alarms it remains the tenants responsibility to service and check the alarm – that is, to replace batteries and or let you know if they are not working as they should be. We also suggest checking on these when you stop by for inspections in case the tenants are not playing their part.

We also recommend having a clause in your tenancy agreement against tampering with the smoke alarms by tenants. In body corporates where tampering or negligence by tenants can trigger full fire service call outs, body corporate charges and building management charges, we also have clauses indemnifying the landlord for their tenants actions and incurred costs (can be thousands of dollars) to the full extent of the law.

Landlords and tenants can be fined up to $4,000 for not meeting obligations so get familiar and compliant.

Meth

A growing epidemic in NZ is affecting property investors everywhere. Don’t be complacent.

Meth contamination in properties can lead to severe illnesses for those staying in the properties. As such new limits and testing methods are constantly being draw up by legislators in effort to put a stop to contamination.

So what can you do as a landlord to protect your property and your tenants?

The only way to be able to pin meth use or contamination to a specific tenant is to test in-between each and every tenancy. Without this testing you will likely be wearing any costs for cleaning and repair which tend to be running in the tens of thousands of dollars.

We also recommend including in your tenancy agreement a clause allowing for meth testing. This may be some small deterrent to users and cooks to keep looking for another property.

The government is not alone is making changes – major insurance companies are also doing what they can to protect themselves. Policies are being changed to reflect the increase in probability of your property being meth infected.

Check in with your policy provider to make sure you are compliant with their cover regulations – usually this now means quarterly routine inspections.  If you do not do these inspections it may jeopardise your cover.

Insulation

The trickiest to date in my opinion is the insulation change.

This affects all rental properties throughout the country as the government works to provide warmer, safer, drier NZ homes to tenants

As of July 2016 Landlords must now declare to tenants on tenancy agreements, not just whether the property is insulated but what level of insulation is present in walls, ceilings and floors.

In most cases we just don’t know. Many landlords didn’t build the property or install the insulation and the only way to find out is whack a hole in each area and pull some out for testing.  As most of us won’t be able to just tell from looking at some fluff out of a wall we’re going to need to get some pros in.

By 2019 this is upping the stakes by requiring specific levels of insulation to be present, where it is practical to do so.

Landlords who are not compliant by 2019 may be paying penalties of up to $4000 (at time of writing).

We suggest speaking to an insulation supplier now, get quotes and start putting aside funds. Look around for a deal, with suppliers knowing this is coming they will likely compete with each other.

We never said being a property investor was easy, but it can be very rewarding. Once the tasks have been done – new smoke alarms, insulation and a new schedule for inspections is all set – it’s done and you can relax for a while.

Disclaimer: The information contained in this publication is exclusively for promotional purposes and is not to be relied upon for legal or contractual dealings. Tenant Source recommends you seek independent legal advice, and that you may need to seek technical or other advice and information prior to making any actions in regards to tenancies in your investment properties. Tenant Source Ltd including its staff and directors accepts no responsibility for any issues arising as a result of taking advice from this publication.