Saturday, July 20, 2024

Changes to better regulate rental property sector

A suite of measures to improve the lives of nearly 600,000 household renters and landlords has been announced by Housing Minister, Megan Woods, today.

Dr Woods said the new measures will result in regulated oversight of residential property managers, science-based rules on meth residue testing and a reprieve for landlords in meeting a compliance deadline.

“The Government aims to ensure every New Zealander has a warm, dry, and safe place to call home, regardless of whether they own or rent. These initiatives build on the important work we’ve already done in the rental sector which all ultimately serve to improve the lives and outcomes of renting New Zealanders and their whānau,” the Minister said.

Residential property management regulations

The Government has pledged to regulate residential property managers so that they are registered, trained and licensed, with complaints and disciplinary matters to be dealt with through a new regulatory framework.

“Sometimes tenants are vulnerable to poor behaviour from residential property managers, especially in a tight rental market. Following our moves to give tenants more protection through the Residential Tenancies Act, we made a manifesto commitment in 2020 to regulate residential property managers,” Minister Woods said.

“This means that like many other professions such as real estate agents, builders and lawyers, they will have conduct and competency standards to abide by and if they don’t, they can be held to account.

“Nearly one in three households rent their homes and 42 per cent of these tenancies are managed by residential property managers, so they have a lot of access to rental homes and interaction with tenants. Having safeguards to ensure they meet minimum conduct and competency standards is in the best interests of both property owners and tenants,” she said.

Cabinet has agreed the Real Estate Authority will be the regulator and that the Real Estate Agents Disciplinary Tribunal will have an expanded role as Disciplinary Tribunal for residential property management-related complaints. 

Public consultation on proposals to manage methamphetamine contamination

The Minister said the Government will consult the public before making binding rules on what an acceptable maximum allowable level of methamphetamine residue is, at what levels those homes need to be decontaminated to, and when tenancies can be terminated due to high levels of residue.

“Currently there are two levels used – neither of which are legally binding – which create uncertainty for landlords and tenants,” she said.

“We have proposals that are informed by science, on screening, testing, and decontamination, with clear obligations for landlords.

“Under National, this issue was a dog’s breakfast; hundreds of tenants were unnecessarily evicted from public housing through the application of pseudo-science and we are cleaning up that mess.

“While the witch hunt on public housing tenants stopped under this Government and the former Chief Science Advisor Sir Peter Gluckman’s 2018 report resulted in a more scientific approach to residue dangers, it’s time to settle the rules once and for all.”

In the proposals, a maximum acceptable level of surface methamphetamine residue is proposed to be set at 15 micrograms per 100 square centimetres, which is also the level which a property needs to be decontaminated back to, or below.

“This level of residue is consistent with the findings of Sir Peter Gluckman’s report and advice from ESR,” said Dr Woods.

“The sector needs certainty on what level of methamphetamine residue requires decontamination, so making regulations to clarify this is a priority.”

Once relevant regulations are in place, landlords will not be able to knowingly rent out premises that are contaminated above the prescribed levels (as set out in the regulations), without decontaminating in accordance with the regulations. They will be liable for a financial penalty of up to $4,000 if they do so.

Detail on the proposed Methamphetamine regulations and an opportunity to submit feedback can be found on the Te Tūāpapa Kura Kāinga – Ministry of Housing and Urban Development website.  Feedback is welcome up to 5pm, Friday February 20, 2023.

Extension to the Healthy Homes Standards

The Government is also giving private landlords, Kāinga Ora – Homes and Communities, and Community Housing Providers more time to comply with the healthy homes standards. Legislation will be introduced in the House today and passed under urgency before the end of the Parliamentary year, to ensure certainty for landlords.

“We recognise the impact that COVID-19 has had on getting this work done because of global supply-chain and delivery challenges, including limited workforce challenges,” Minister Woods said.

“It makes sense to be pragmatic as most landlords are genuinely trying to comply with their obligations but are at risk of breaching them because of issues outside of their control.

“The change means private landlords have one more year to comply, so all private rentals must comply by 1 July 2025, instead of 1 July 2024. The timeframe for compliance for a new or renewed tenancy* shifts from 90 days to 120 days.

“For Kāinga Ora and Community Housing Providers, the timeframe for compliance shifts from 1 July 2023 to a new date of 1 July 2024.

“We are monitoring how the private sector is tracking for compliance; the last survey in 2021 indicated 85% of private rentals met, or had action underway to meet the standards.

“Similarly, 84% of Kāinga Ora homes either meet the standards or there is work in progress to meet them. Currently Kāinga Ora are bringing around 600 homes a week up to the new standard, as part of a wider programme that is making the biggest improvement to the quality of public housing in a generation.

“Pragmatically delaying the timeframes for compliance will ease pressure on landlords, however we do expect Kāinga Ora to aim to have as many properties as possible to be compliant by the original deadline of July next year. Projections indicate they could achieve around 95 percent compliance by the original date,” she said.

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