Landlords worry tenants will cash in on insulation penalties

Monday, 24 December 2018

Christchurch City Council said it couldn't be done - so this social housing tenant took matters into her own hands.

Tenants are just over six months away from being able to access a windfall by dobbing in lagging landlords - and some investors are worried.

From July 1, rental properties are required to have floor and ceiling insulation installed, unless it is not physically possible to do so.

Any tenant who can prove that their landlord is not meeting their obligations will be able to take their case to the Tenancy Tribunal.

The landlord could be required to pay a financial penalty of up to $4000, which would go to the tenant.

* Property manager and landlords fined $34,000 for bond and insulation breaches

* Rental insulation: Can I take matters into my own hands?**

From July 1, rental properties are required to have floor and ceiling insulation installed, unless it is not physically possible to do so.

The tenant could also apply for a work order that would require the landlord to have insulation installed by a certain date. The tribunal could impose further sanctions if that was not complied with.

It is estimated that the owners of tens of thousands of rental properties are not on track to meet the deadline.

Property investor Nick Gentle, who also owns iFindProperty, which helps investors find rental properties, questioned whether incentivising tenants to report uninsulated properties was the right course to take.

'Come July 1, tenants could potentially earn thousands from reporting non-compliant homes. Some landlords might be thinking how are they going to find out - that's how.'

Nick Gentle says tenants are being encouraged to dob in their landlords.

All new tenancy agreements must also include an 'insulation statement' detailing what insulation a property has.

Gentle said he was concerned about the possibility of insulation being removed.

'A colleague inspected a property recently and found that some had been taken out from the underfloor,' he said.

'It terms of enforcement, I think lodging the insulation statement along with the bond and creating some kind of a centralised database would be better. That way a house goes on record as being verified as insulated or exempt and the [Tenancy Tribunal] could see that if a claim is lodged. Also with upcoming heating requirements, it probably makes sense to have such a database, otherwise we will go through this whole process again.'

It is estimated that the owners of tens of thousands of rental properties are not on track to meet the deadline.

Steve Watson, acting general manager of housing and tenancy services at the Ministry of Business, Innovation and Employment, said landlords and property managers had known about the insulation requirement since 2016.

'Tenancy Services has worked hard to make sure that landlords know what they need to do to comply with insulation requirements,' he said.

'In addition to engaging with the landlord sector via public seminars and industry presentations, we have provided information and videos via the tenancy.govt.nz website, broadcast, online and social media channels, and have reminded landlords of the upcoming deadline regularly since 2016.

'The Tenancy Compliance and Investigation Team will be focusing on compliance and enforcement of insulation requirements. The team has the ability to make applications to the tribunal on behalf of a tenant or in its own right where there is the most harm to the health and safety of tenants. Any exemplary damages secured by the team when it applies on behalf of a tenant would be passed on to the tenant.'

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