Are the new changes to the Residential Tenancies Act achievable?

August 24, 2015

You’ve probably already heard of, or had the opportunity to read Melissa’s latest article, on the changes to the Residential Tenancies Act, namely the requirements for:

  • Insulation in all tenanted property by mid-2019
  • Installation of long-life smoke alarms by 2016

Fortunately members of the First Avenue Property team and I had the opportunity to attend the 2015 REINZ Residential Property Management Conference held recently in Auckland. It was a great industry-led conference with plenty of take away points to help increase our knowledge and continue on the path of customer service excellence.

One of the discussion topics was on the whole insulation requirement that had come from central government. It is also important to note that the requirements of the installation of long-life smoke alarms was an actual non-event and something that has widely been accepted by the industry.

Back to insulation. We’ll this was a highly debatable and contentious issue for Property Managers (and no doubt owners alike). From our perspective, the marketability of a property is something that we will always advocate and insulation is definitely one of those factors. Practically, the industry would love to provide insulation ratings on properties as one part of advertising mix. In fact, it appears when a Property Management Company signs-up a new tenant and subsequently lodge a new tenancy agreement, they will be required to state the insulation (measure) in the ceiling, walls, and underfloor.

But the wider questions have to be ‘how do we know if something is insulated?’ and ‘Can we be held accountable if we misrepresent a property based off what we have been told in regards to a property’s insulation?’

It is extremely difficult to determine if a property is insulated, and to what standard. While one would assume that it would be relatively easy to climb through a man hole to check insulation has been installed in the roof, or clamber under the floor to check for insulation, it is not always possible. Thankfully there are some exemptions under the new legislation, for example if it is practically difficult to insulate under floor or in roof cavities, due to accessibility[1] etc. but in terms of wall insulation – how does one ‘check’ that there is wall insulation without physically putting a hole in the wall?

While discussions were rampant on whether this is physically possible without invasive techniques, notions of removing electrical light switch and plug face plates to see if insulation is installed were discussed. While on the face of it that this is a possibility, it was noted that rogue, dodgy or ‘cowboy’ developers have sometimes simply ‘insulated’ these sources and not completed the insulation over the whole wall – leaving the property manager or a new landlord none the wiser. 

This highlights the importance of extremely good certification practices that will be required in the years to come. While the dodgy builder will always be a risk, landlords purchasing new properties will be looking for some certainty around their investment and its insulation. Unfortunately for those that have purchased previous to this point, there will always be a point of apprehension that what you ‘see’ is actually what is present in terms of insulation and any associated insulation rating.

One other point to think about in terms of insulation is around how good is it? For example, it is well known that Pink Batts degrade over time. So 10 years ago when your Batts were installed in your ceiling they may have had a nominal thickness of 70 mm – 10 years later it may be 50 or 60 mm thick. Yes there are Batts in the ceiling, but how efficient are they? And will the rating provide indicate the level of insulation 10 years ago, or today?

One school of thought from the Property Management conference was that potentially it would be safer to understate the level of insulation. Though this is devaluing the product you’re marketing, it does safeguard both company and landlord against possible Tenancy Tribunal action.

While there are surely more questions than answers at this time, no doubt with time, further clarification will be provided, but at the moment it is an area of contention. While across the board as a society we all see the benefits on insulation in terms of warmth, wellbeing and health of tenants, it is also an added cost to the already diminishing margins faced by Christchurch landlords.


Citations
[1] http://www.stuff.co.nz/business/70096597/Landlords-required-to-insulate-and-install-smoke-alarms-to-rental-properties

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Filed under Property management \ Real Estate

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