New insulation standards see property managers, landlords part ways

Juli Anne Tolley, from Quinovic Property Management. Photo / Andrew Warner

Median rents in the Bay of Plenty reached an all-time high this year as landlords prepare for new legislation to take effect. One housing expert says the insulation standards are just the beginning and landlords need to be prepared to meet the "tsunami" of new legislation coming in over the next few years. Zizi Sparks reports.

Some property managers are cutting ties with landlords whose properties do not meet new standards as median rents continue to climb.

But one housing expert says the insulation standards are just the beginning and landlords need to be prepared to meet a "tsunami" of new legislation in the next few years.

Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys, said the group had severed ties with some landlords over standards, but not many.

"There are some situations we've got where we've had to do that, but typically we've been working with landlords for the last year or so and most have come into line with new regulations.

"There are challenges in certain areas but, across the board, we're comfortable where we got to. With some, we've had to say sorry we can't continue."

Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys. Photo / Supplied

Tauranga Harcourts managing director Simon Martin said there had been a small drop-off.

"It might have been closer to the deadline or when people were going to sell their properties anyway," he said. "We were told about the changes well in advance."

Martin said, going forward, Harcourts would not take on any properties unless they were compliant.

"It's illegal to rent them out if they aren't compliant."

Tauranga Harcourts managing director Simon Martin. Photo / File

Martin said property managers were now focusing on the next changes - the Healthy Homes legislation.

"It is a target all the time that's moving, but we've got to keep aware of what's required."

Tauranga Property Investors Association president Juli Ann Tolley said she had not seen any cases of landlords and property managers cutting ties, but she had heard about it happening.

"Most active investors acted pretty early doing insulation back when it was announced or even before then. Some utilised the grants that were offered and did what they needed to do."

Tolley described the deadline for the new standards as being a bit like Christmas.

"Some people are alarmed by Christmas every year. They knew it was coming but other things are always more pressing and important."

She said landlords were already talking about the next lot of incoming standards and some were taking action.

"Some places are going to be easy [to make compliant]. Older homes are problematic.

"It's going to be interesting to see what happens and how many stay in the rental pool."

Nik Gregg, manager of Sustainability Options, said some of the homes they had visited were still not up to scratch.

"Most property managers have nailed it. The homes that we are seeing that require work are generally directly managed by landlords.

Nik Gregg, of Sustainability Options, giving free advice. Photo / File

"There's certainly a reasonable number that still require insulation."

Gregg said a properly insulated home was "critically important".

"If we want to achieve warm, dry, more comfortable homes for all of New Zealand, first base or ground zero is getting insulation in place."

He said meeting new Healthy Homes legislation standards was the next phase.

"We've got landlords going. I can see the tsunami coming and I'm just going to watch, wait and stand on the shore."

But it was not just up to landlords to keep homes healthy. Gregg said tenants needed to know how to keep their homes warm and dry.

The comments as Ministry of Business, Innovation, and Employment figures reveal the median rent in the Bay of Plenty reached an all-time high of $448 a week in May. It dropped slightly to $441 in June, but this was still up 4.5 per cent from $422 in June last year.

In Tauranga, the median rent in June was $490, up 3.8 per cent from $472 in June 2018.

OneRoof editor Owen Vaughan said some landlords were now assessing whether having a rental was worth it, but the changes meant high standards and better living conditions.

"If landlords can't afford to make changes they should get out of the game.

"It's better to have a landlord who can take care of tenants and properties."

Vaughan said best business practice was for property managers to get away from anyone breaking the law.

Landlords who did not meet the standards set out by the Ministry of Business, Innovation and Employment are in breach of the Residential Tenancies Act and may have to pay a penalty of up to $4000.

Landlords who still did not comply after paying the penalty may face further action.

In Tauranga the median rent in June was $490 up 3.8 per cent from $472 in June 2018. Photo / File