Every rental property in New Zealand will have to be fully insulated within four years, the Government has confirmed.
Housing Minister Nick Smith announced plans today 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. The requirement applies from 1 July 2016 for social housing that is heavily subsidised by Government, and from 1 July 2019 for other rental housing, including boarding houses," he said in a statement.
There would be some exceptions, such as in houses where it was physically impossible to retrofit insulation, Dr Smith said.
Smoke alarms would be compulsory from July next year also.
"Regulations will make landlords responsible for ensuring an operational smoke alarm is in place, and tenants responsible for replacing batteries or notifying landlords of defects," Dr Smith said.
"The Ministry of Business, Innovation and Employment will have new powers to investigate and prosecute landlords for breaking tenancy laws as part of these reforms, particularly where there is risk to the health and safety of tenants."
Dr Smith said landlords would save money in the long run from investing in insulation.
"The insulation retrofitting is expected to cost $600 million, with benefits of $2.10 for each dollar of this cost. "
The minister said smoke alarms would save the lives of three people every year.
Some 180,000 New Zealand homes required insulation and 120,000 homes 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.
Based on the limited information available, officials estimate that about 270,000 private residential rental properties are inadequately insulated. These include 150,000 rental properties occupied by low-income tenants, but exclude properties where it is not practicable to insulate due to physical design of the property.
Since 2001, the Government has spent $500 million to insulate all state houses where practicable and since 2009, subsidise retrofitting of insulation in 280,000 private residential properties.
Officials estimate 180,000 privately tenanted rental properties will require retrofitting of insulation in the period up to July 2019.
Key points
• All rental properties must be insulated by July 2019, though exemptions apply to properties where it is physically impractical to retrofit insulation.
• 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 there is risk to tenants' health and safety.
• The changes also ensure tenants can take concerns to the Tenancy Tribunal without fear of retaliatory evictions.
Subsidy for landlords
The Government said the average cost of retrofitting both ceiling and floor insulation was about $3300.
Landlords could apply for a subsidy through the "Warm up New Zealand: Healthy Homes" scheme, but funding for that programme was only guaranteed to run till June next 2016.
The new smoke alarm standards required a minimum of one working smoke alarm in a hall or similar area, within three metres of each bedroom door. In self-contained sleep-outs or caravans, at least one working smoke alarm would be needed, in line with Fire Service recommendations.
A Cabinet paper showed Dr Smith deemed a "Warrant of Fitness" trial for homes less cost-effective "for tenants, landlords or society" than the law changes announced today.
The Cabinet paper showed properties sold and immediately rented back to the former owner-occupier for up to 12 months would be exempt from the new laws.
Properties a landlord intended demolishing or substantially rebuilding within 12 months of a tenancy starting could also be exempt, as long as landlords provided evidence of relevant resource or building consent.
The minimum insulation standards were consistent with national requirements introduced in 1978.
"We are not wanting to require the replacement of insulation installed since then. The greatest benefits are obtained from this first minimum amount of insulation," the Ministry said in a related document.
Abandoned properties
Landlords will be able to take control of abandoned properties faster than the law currently allowed.
Dr Smith said the new laws would create a ten-day process introduced to enable "re-tenanting" of abandoned properties. He said the process currently took up to six weeks, leaving houses empty and landlords out of pocket.
"These reforms are to be supported by a $1.5 million information campaign aimed at improving compliance with existing and new tenancy law requirements, as well as providing guidance on the practical ways that homes can be made healthier," the minister added.
Changes welcomed
A Fire Service spokesman said today it welcomed the requirement to install smoke alarms in rental properties because renters were more at risk than owner-occupiers.
"About 90 percent of house fire fatalities are in rental properties, which often do not have working smoke alarms. This measure will give renters greater warning and protection."
Tenants' Protection Association (Auckland) coordinator Angela Maynard was thrilled by the changes which would help thousands of Auckland tenants keep safer and warm.
However, regulations around insulation and fire alarms were simply common sense which should have been introduced years ago, she said, and the changes did not go far enough.
Dr Maynard said as house prices rocketed across Auckland and wages failed to keep pace, many people were being shut out of homeownership and forced to rent for life. She wanted better tenure security for tenants like those in place in some overseas countries, notably Germany and Switzerland.
"So people know that the house is not going to be sold out from under them.
"Living in a house and seeing it as your home rather than always having to look over your back, [worrying] that at any time it could be sold. There's just no security in that and because a lot of people are going to have to rent for their lifetime there should be means for them to be able to do that comfortably and stay in one area ... for community stability."
- NZ Zealand Herald and NZME. News Service
