Ensure rental property compliance
Question from Nikesh updated on 15th December 2016:
We have a house in Papakura, Auckland. It is a two level house with each level having a separate entrance. There is an internal stairway connecting the two.
But we intend to put a wall at the ground floor to seal off this entrance, so that the bottom level becomes a self-contained one bedroom flat with bathroom and kitchenette (not a full kitchen as this would need resource consent, etc.)
My question is - is there anything that I need to consider before letting the two levels separately to two tenants? (Other than electricity/water cost share.) Are there any requirements that need to be fulfilled?
Our expert Allan Galloway responded:
The renting law (Residential Tenancies Act 1986) requires that a landlord must make sure that any premises they rent out complies with all building health and safety requirements (that relate to the premises).
Before undertaking any renovations, check with your local council to confirm what consents may be needed and to ensure that the building and its use complies with all legal requirements and local bylaws. The Council will also be able to tell you if the facilities (such as the kitchenette) meet the required minimum standards.
If the power and water (or outgoings) are in your name and you want to recover the costs from the tenants, you will need to ensure that independent ‘check- meters’ are installed for each tenancy at your cost. Alternatively, if the power accounts are to be in the names of the tenants, then separate electricity connections are required.
You can only claim costs for outgoings if you can prove the exclusive use of them by a tenant - for example: fixed charges that are incurred whether or not the premises are occupied are the responsibility of the landlord.
A recent Tenancy Tribunal decision awarded a full refund of all rent paid to a tenant where it was proven that the rented premises was non-compliant. Therefore it’s worthwhile taking the time to ensure any changes to the property meet all the necessary legal and compliance requirements.The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.