As the deadline looms for insulating rental properties, some operators are taking advantage of landlords. Photo / Supplied
As the deadline looms for insulating rental properties, some operators are taking advantage of landlords. Photo / Supplied
Landlords have a little over a year to insulate their properties as the Healthy Homes Guarantee Act comes into force — and sharks are circling.
Some insulation providers have been said to jack their prices up by the amount of government subsidy and then essentially offer non-existent discounts to cream the grant off for themselves. Or there is no subsidy available so the homeowner is effectively paying their own subsidy.
"It used to be a good deal, but then the prices doubled, so when the government subsidy was applied, it made no difference at all," says Andrew King, executive officer of the New Zealand Property Investors' Federation.
When the Herald contacted property investor associations across the country, examples of price gouging and alleged fake subsidies emerged.
Capital Property Investors Association secretary Dean Jackson says members of his association have noted that installers approved for insulation subsidies will typically charge around 30 per cent more than other companies which aren't approved, and then take this same amount off as "discount".
Like many landlords, Jackson qualifies for Warm Up New Zealand: Healthy Homes subsidies for homes that are occupied by tenants holding a valid Community Services Card.
Jackson received a $3300 quote after the subsidy was applied for insulating 180sq m of roof cavity in a large block of flats he owned.
My experience is that when the subsidy was on, operators were jacking the price up by adding the subsidy and then taking it off again.
"I purchased the Knauf Earthwool insulation from (now defunct) Right House for $1300 and paid one of their installers $80 an hour to install it on a Saturday," says Jackson.
Jackson says the same company quoted $6700 for a 374sq m underfloor area in another property. In that case he contacted the not-for-profit Sustainability Trust, which quoted $1897.31 for the same job.
Auckland investor Lee Whalee, who insulated all his rental properties, noticed that prices increased when subsidies became available.
"My experience is that when the subsidy was on, operators were jacking the price up by adding the subsidy and then taking it off again. Net result being subsidy was going to the operator not the client."
South Island property investor Kerry Beveridge has nearly insulated all his rental properties in recent months.
Beveridge sought two quotes for a large boarding house he owns in Timaru. The first quote was $8496.96, with a $2486.80 "discount" and a net price of $6010.17. The second was $5624, less $209 discount, which came to $5415.
"I would say: get multiple quotes to determine whether that discount is meaningful or not," says Beveridge.
It's not just property investors who need to be wary. Plenty of home-owning Kiwis can also be the target of less scrupulous operators and stories of pensioners being ripped off have emerged.
The Wairarapa Times-Age, for example, reported the case of Masterton couple Raymond, 85, and Rosalind New, 77, who were not told by a salesperson that they could qualify for free insulation through other companies and were quoted nearly $6000.
After finding out from a friend, whose home was insulated for free, that they were eligible Rosalind New cancelled the cheque just in time and was able to get free insulation through EnergySmart Wairarapa, funded by the Energy Efficiency & Conservation Authority (EECA).
Beacon Pathway Incorporated, a society dedicated to improving New Zealand's homes, has seen aggressive marketing in insulation to households irrespective of the cause of the problem.
"Often industry will advise households that they 'save money, you don't need that much insulation'," says Beacon's Vicki Cowan.
"If you have damp issues, it could be caused by a multitude of different things — a broken pipe under the house, drying washing inside, not enough insulation, not heating enough, no extractor fans in wet areas."
Cowan adds that insulation installers will often tell customers not to go above the Building Code. Yet the code is the minimum "worst house you can legally build in NZ," she says.
As a result of some of the problems associated with rogue insulation sales, the Community Energy Network, Beacon Pathway and the Toimata Foundation have set up a training programme for Home Performance Advisors (HPA) to become certified.
Cowan says the programme arose from the need to ensure practitioners gave households advice on how to improve home performance by making them warmer, dryer, healthier and more energy-efficient. The aim was to offer robust training and an ongoing professional development pathway.
"HPA prioritises provision of robust, whole of house advice that is independent of sales/products."
A public register of certified HPAs is available on Beacon Pathway's website at Beaconpathway.co.nz. There could be valid reasons for some of the quotes being higher for insulation provided under the Warm Up New Zealand programme. EECA chief executive Andrew Caseley says: "The cost of insulation under the Warm Up New Zealand programme may be higher than prices charged by some other companies that aren't subject to EECA's quality standards and audits."
Complaints should be addressed to the service provider that did the job, says Caseley.
Citizens Advice Bureau New Zealand received 150 enquiries related to insulation issues in the six months to April. Of those, 10 related to concerns about insulation providers, in particular when clients had been cold-called or felt a provider might be targeting a particular group such as the elderly.
"Issues with providers also included problems with quotes and whether the agreed work was done, payment made and work not completed and difficulties contacting providers — not answering calls or emails," says CAB national advisor legal and strategic, Sacha Green.
As well as a wide range of prices being quoted, investors and homeowners need to look at the R-value (thermal resistance) of the product being used to ensure the quotes are comparable, says Andrew Bruce, president of the Auckland Property Investors Association.
Landlords and homeowners who want to get insulation installed over the next 14 months could find themselves at the mercy of whatever operator will take their business. King advises investor to get onto the work fast to avoid the rush.
Sustainability Trust's chief executive Phil Squire says the industry predicts long waiting lists and turnaround times as the deadline gets closer.
The trust is part of a Community Energy Network (CEN). Members of the network have insulated the homes of more than 80,000 families. Local member organisations can be found at Communityenergy.org.nz. Some deal only with vulnerable families; others will give advice to anyone.
What landlords need to do
• Insulation statements are compulsory with all new tenancy agreements. • Insulation for ceiling and floors will be compulsory for all rental homes from 1 July 2019. • Installations must comply with regulations and be safely installed. • A landlord who fails to comply with the regulations is breaking the law and may be liable for a penalty of up to $4000. • Tenants who have a problem with insulation must first talk with their landlord. • The Tenancy Tribunal can order landlords to comply with insulation regulations. • Some landlords may be eligible for subsidised insulation through the Warm Up New Zealand: Healthy Homes programme. Source / Tenancy.govt.nz
