Their work is underway, with Dunedin flats being one of the first areas to be investigated by the team. While this has some landlords worrying about getting a knock on their door, there is no need for concern if your rental property is up to standard. But it is still critical for property investors to be aware of what this enforcement team will be doing, and why.
A quick recap
In June 2016 the Ministry of Business, Innovation and Employment (MBIE) announced it was establishing a Tenancy Compliance and Investigation Team. This coincided with changes to the Residential Tenancy Act. Due to the far reaching impact of these new laws on the rental property landscape, the MBIE established the Tenancy Compliance and Investigation Team to monitor and enforce compliance of the Residential Tenancy Act.
How these changes impact landlords and property investors
The only way these changes will affect landlords is if their rental homes do not meet the minimum compliance standards, or if tenants believes the property does not meet a basic level of living conditions.
So to recap on the changes in the Residential Tenancies Act - smoke alarms are now compulsory in all rental homes. Landlords must ensure there is at least one working smoke alarm in each bedroom or within three metres of each bedroom door, at least one on each storey or level, and at least one in any caravan, sleep-out or similar. Tenants are responsible for replacing batteries in smoke alarms during the tenancy. (You can read about the smoke alarm regulations here.)
Insulation will be compulsory in all rental homes from 1 July 2019. There must be underfloor and ceiling insulation meeting the required standard, where it can be practically installed. (You can read more about the insulation regulations here.)
The other five big changes are; keeping records, expedited abandonment process, retaliatory notice, work orders, and of course, new enforcement powers, as was detailed below.
New enforcement powers. Tenants can redirect rent to MBIE
Another significant modification to the Act is that tenants who are waiting for specific repairs to be done to their rental home, and have a work order issued through the Tenancy Tribunal, are able to redirect their rent payments to the MBIE. These funds will be held by the MBIE until enough has been acquired to cover the cost of the repairs.
And while there may be some landlords who may feel like this tactic similar to being ‘held to ransom’ - it will only occur in extreme circumstances. An MBIE spokeswoman said that landlords who meet their obligations by maintaining their premises in a reasonable state of repair, or even those landlords who get it wrong but comply promptly with any Tenancy Tribunal order to get work undertaken, are unlikely to find themselves facing this situation.
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Here’s a tip - if you aren’t already a member of a Property Investor Association, think about joining one. They can be a great support when it comes to big changes in legislation, like what was experienced in 2016, as well as guiding you on your duties as a landlord and assisting with any problems or issues you may have. They also lobby to the government around property investment and tenancy policy, so you can have your say on how changes may affect you as a landlord. And their membership fees are tax deductible too!
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