The new year is a great time to start planning for the year ahead and it's necessary if you're going to meet your obligations under the healthy homes standards. The July 2020 compliance date is less than six months away when you will need to know (and disclose) your current level of compliance with the healthy homes standards.
2019 has been a year of change for the property management industry and most landlords have adapted and responded well to these changes. Harcourts has welcomed the reforms which have been largely positive, in particular the introduction of the healthy homes standards.
Unfortunately, there are rental homes in New Zealand that are below par and these reforms will ensure that landlords bring those rental properties up to standard. The spotlight on maintenance highlights to landlords their responsibilities under the Residential Tenancies Act 1986 (RTA), the standards a property needs to meet before it is rented and the maintenance a landlord is responsible for during a tenancy.
In July 2016, legislation came into force that gave landlords three years to install insulation in all rental homes. Some landlords did not meet their obligations or didn't meet them before the July 2019 deadline. In keeping with our legal and professional obligations, Harcourts took a firm approach with those landlords and we no longer manage those properties. A refusal to adhere to the insulation standard was a warning sign for property managers that a landlord was unlikely to meet their future obligations under the Healthy Homes Guarantee Act or commit to ongoing maintenance. We are fortunate that these landlords are the exception and that the vast majority are committed to meeting their obligations.
Being a landlord is being in business and a landlord has a contractual relationship with a tenant to maintain the property in accordance with the RTA. Section 45(1)(b) of the RTA states:
"The landlord shall 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."
It is important to remember that failure to maintain a property is a breach of the RTA and therefore an unlawful
act. Landlords that have refused to do required maintenance are being taken to task by the Tenancy Tribunal, with some hefty penalties issued to non-compliant landlords in 2019.
Our job as property managers is to protect landlords by identifying and addressing maintenance requirements. Sometimes this can result in difficult conversations, but property managers have been fined for continuing to manage properties that do not meet maintenance standards, regardless of the level of communication they've had with a landlord. As property managers, we must tell landlords what they need to hear, which is not always what they want to hear. It's the property manager's job to act professionally in the best interests of the landlord and the landlord's investment.
We congratulate landlords that are already planning to meet the healthy homes standards. These landlords will have fewer vacancies and attract the best tenants.
From July 2020, landlords must declare in each new, varied or renewed tenancy agreement the current level of compliance with the healthy homes standards and tenants will be well informed to make decisions before committing to renting a property or extending their lease.
By including insulation statements, healthy homes statements and insurance statements in Tenancy Agreements, tenants are well informed about their rights and responsibilities under the RTA. The inclusion of these statements also ensures that landlords and their property managers are engaging in better conversations with tenants.
As we head into 2020, the condition of rental properties will continue to improve and we anticipate that the understanding and commitment from landlords towards their maintenance obligations will also improve.
Harcourts property managers maintain a high professional standard and enjoy working with landlords who are committed to maintaining their rental properties, not only to protect their investment, but also the health and wellbeing of their tenants.
This article is featured in Harcourts' Property Management Focus Newsletter Issue 1, 2020.