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Focus: Healthy Homes Bill – what does it mean for you?

By David Kneebone on 2017-12-20

New Blog Image.jpgThe Healthy Homes Guarantee Bill has had its time in Parliament and is now coming into effect. David Kneebone, Lodge City Rentals General Manager, looks at what this means for landlords.

There’s been a lot of debate of late about the onus being placed on landlords to provide healthy homes for tenants to live in. This obligation has now become law with the passing of the Healthy Homes Guarantee Bill.

At Lodge City Rentals, we ensure all our landlords provide quality homes for tenants to rent. We do so because better homes attract better tenants, better tenants stay longer, and better homes attract greater rent. It’s also the right thing to do.

But it can be confusing whenever legislation is passed. Now that it’s law, do standards have to be met straight away? Is there a deadline by which homes must be improved? And what cost is involved in meeting these requirements.

To help understand the changes the Healthy Homes Guarantee Bill will bring about, we look at what we know of the Bill so far.

The background to the Bill

The Healthy Homes Guarantee Bill has been knocking around since 2013 but it wasn’t until the Labour party came into power in October this year that the Bill was once again bought to the fore. It was part of the new coalition-led government’s 100 day plan and sure enough, within a month of Prime Minister Jacinda Ardern taking the helm, the Bill saw the light of day.

This Bill sets out minimum standards of housing relating to warmth and insulation and encompasses all rental properties throughout New Zealand.

In five years’ time, every rental property will be required to have a modern heating source, effectively making it illegal for landlords to rent out properties that are a threat to their tenants’ health.

If you own an investment property, it’s important to stay up to date with the latest property management legislation, but understanding and being aware of legal changes can be tricky and time consuming.

What is the Healthy Homes Guarantee Bill?

The Healthy Homes Guarantee Bill sets out to ensure all homes, rental or otherwise, are fit for people to live in. The Bill requires landlords meet new heating and insulation standards.

What specifically does the Bill mean for landlords?

The law will require landlords to guarantee that any new tenancy from 1 July 2019 must be either properly insulated or contain a heating source able to make the home warm and dry. As of 1 July 2024, all tenancy agreements that landlords issue, must meet these new standards.

The exact requirements are not in the Bill, but will be set by the Government before 2019. Grants of up to $2000 will be available for eligible landlords to upgrade their stock.

How does this Bill differ from the way things were?

As a landlord, there are obligations you must ensure your property or properties meet before you can rent them out. The Healthy Homes Guarantee Bill specifies and enforces standards that ensure warm and insulated homes.

Under the previous law, rental properties were only required to be insulated by 1 July 2019, if it was practicable. Now, there will be further heating and insulation standards to adhere too. Every rental property must meet these standards within five years of the Bill coming into effect.

How was the Bill introduced?

Housing Minister Phil Twyford's Healthy Homes Guarantee Bill was first drawn from the Parliamentary ballot in 2013, but was struck down at its first reading.

Then-Labour leader Andrew Little introduced a second version, which made it through its second reading with the votes of every party except ACT and National.

This allowed the Labour-led coalition led Government to pick up the Bill, modify it, and pass it relatively quickly. The Bill passed 63 votes to 57, once again opposed by National and ACT.

Who might the Bill affect?

  • People who rent properties
  • Landlords
  • Property managers

Why are warm homes important?

Research into the link between housing and health has found warm and insulated homes can reduce health risks such as respiratory illnesses, and diseases like rheumatic fever, which can be caused by cold, damp housing.

Can you explain the one-year/five-year timeframe again?

If you are a landlord with a new tenant on or after 1 July 2019, your property must meet the new heating and insulation standards prior to your tenant(s) moving in.

If you have existing tenants in your property, you have until 1 July 2024 to ensure your property meets the new standard.

Where can I see the Bill?

The details of the Healthy Homes Guarantee Bill (as they exist) can be viewed here.

How can Lodge help?

Lodge City Rentals property managers ensure their landlords meet all legislative requirements and keep abreast of all upcoming changes.

All our property managers are highly trained and familiar with the Residential Tenancies Act 1986 & Amendments and the rights and obligations for both landlords and tenants.

They will work with you to ensure your properties meet the standards imposed by the healthy Homes Guarantee Bill as they come into effect.

What are the Landlords’ other responsibilities?

As a landlord you must comply with Section 45(1) of the Residential Tenancies Act 1986, which sets out your responsibilities. These include:

  • * Provide the premises in a reasonable state of cleanliness,
  • * Provide and maintain the premises in a reasonable state of repair having regard to the age and character of the premises and the period during which the premises are likely to remain habitable and available for residential purposes,
  • * Comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises,
  • * If the premises do not have a reticulated water supply, provide adequate means for the collection and storage of water,
  • * Compensate the tenant for any reasonable expenses incurred by the tenant in repairing the premises where the state of disrepair has arisen otherwise than as a result of a breach of the tenancy agreement by the tenant and is likely to cause injury to persons or property or is otherwise serious and urgent and the tenant has given the landlord notice of the state of disrepair or made a reasonable attempt to do so,
  • * Take all reasonable steps to ensure that none of the landlord's other tenants causes or permits any interference with the reasonable peace, comfort, or privacy of the tenant in the use of the premises.

The Bill inserts a new responsibility which is that the landlord must “comply with the standards of heating and insulation under Section 132A.” Failure to observe this is declared an “unlawful act.”

Protecting your investment

At Lodge City Rentals, we believe that owning a well maintained rental property is a great investment and pathway to financial independence. Although the Healthy Homes Guarantee Bill appears to be another layer of complexity added to rental property ownership, our team are all over this and will ensure your investment is compliant and you, our valued owner client, will be meeting your obligations as landlords.

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