New law means insulation, smoke alarms required in rentals

Building and Housing Minister Nick Smith announced today that the Residential Tenancies Act will be strengthened with new requirements for insulation and smoke alarms and better enforcement of those requirements.

He said the 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 costs.

The new law will require retrofitting of ceiling and underfloor insulation in rental homes over the next four years.

There will be exemptions, such as where it is physically impractical to retrofit insulation due to limited space underfloor or inaccessible raked ceilings.

It will apply 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. 

From 1 July 2016, there will also be a new requirement for all landlords to state in tenancy agreements the level of ceiling, underfloor and wall insulation to help better inform tenants.

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.

Long life (10-year) photoelectric alarms will be required where there is no existing alarm or when replacing an existing alarm.

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.

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

Smith said the package was a more pragmatic and efficient way of improving housing standards than a housing warrant of fitness scheme.

Such a scheme would cost $100 million per year, or $225 per house for inspections alone, and these costs would be passed on to tenants in rents. and faster resolution of abandoned tenancies.

The government believes this money would be better spent on real improvements like insulation and smoke alarms which are practical and deliver benefits far in excess of the costs, Smith said.

“The insulation retrofitting is expected to cost $600 million, with benefits of $2.10 for each dollar of this cost.

“The smoke alarms are expected to cost $7 million and provide benefits of $15.10 per dollar of cost.

“Officials estimate the flow-on effect on rents for a property requiring ceiling and underfloor insulation and a new smoke alarm to be $3.20 per week.”

Significant issues like leaky roofs, insecure doors, excessive dampness and unsafe wiring were already covered by existing regulations, and the best response to them was tougher enforcement, Smith continued.

Other issues like window stays, glass visibility safety strips and hot water temperature were best improved by education.

Smith said the reforms will require 180,000 homes to be insulated and the 120,000 homes currently without smoke alarms to have them installed.

“The health benefits of this will be reduced hospitalisations from circulatory and respiratory illnesses, reduced pharmaceutical costs, and fewer days off work and school. The smoke alarms are expected to save three lives per year.”

To support the reforms, there will be a $1.5 million information campaign aimed at improving compliance with both existing and new tenancy law requirements.

The campaign will also provide guidance on the practical ways that rental homes can be made healthier.

As an upside for landlords, the changes to the Residential Tenancies Act will also include a faster resolution process for abandoned tenancies.

The tenancy law changes announced today will be included in a Residential Tenancies Amendment Bill that will be introduced to parliament by October.

The specific regulations on the insulation and smoke alarms will be consulted on in parallel with the select committee process.

To find out more, the MBIE has more information here.