Posted on 17 08 2021

What Happens When A Rental Property Isn’t Compliant

Insulation, ventilation, moisture ingress and drainage, heating, and draught stopping are five things that have occupied the minds of most rental property owners and tenants.

But what happens when a property isn’t compliant with the Healthy Home Standards? Many landlords could be left open to hefty financial penalties if they don’t comply or aren’t aware of what they could potentially be stung with.

 

Healthy Homes Compliance Statement

As of 1 December 2020, all rental property owners were required to provide a completed Healthy Homes Compliance Statement with any new or renewed tenancy agreement. This statement stands as a comprehensive report, covering all five of the standards, identifying the property’s level of compliance.

Failure to provide the compliance statement can result in a $500 financial penalty. If this statement is found to contain false or misleading information, the landlord can be subjected to a fine of $900.
As of 11 February 2021, not providing a completed and accurate compliance statement could result in an infringement notice.

How will a property be found to be non-compliant?

There are two ways a property can be found to be non-compliant. Either an inspection by the council will identify areas of the property that don’t meet the standards, or a tenant can hold a landlord accountable and file a complaint with the Tribunal.

If a property doesn’t hold up to the standards, the property owner will have very little time to make it compliant. With many businesses who install and supply the materials needed for the Healthy Homes Standards getting an influx of requests in, it may prove not easy to secure a spot and get your property compliant on time.

This can result in high penalty fees and stress and result in landlords having to spend a significant amount of time sorting out the home. It could also result in loss of income if the tenants decide to leave the property due to the non-compliance.

 

How much will it cost?

When a property is non-compliant, the Tenancy Tribunal can award exemplary damages to the tenant of up to $4000. When you look at how much it costs to get a rental to meet all the necessary standards, and considering how much time and energy will be needed to deal with a non-compliant property, it is much more cost-effective to get everything installed rather than face a fine from the Tribunal.

And the Tribunal is taking the matter of the Healthy Homes Standards very seriously.

However, this isn’t the only financial penalty introduced by the government this year. The most severe penalties are reserved for serious breaches. Landlords with six or more properties can be fined up to $50,000 and up to $100,000 in hearing claims.

As it currently stands, the percentage of rental properties that pass a Healthy Homes inspection on the first go is 25%, and formal inspections by the council are only at about a 10% pass rate. This means there are still many properties in New Zealand that have yet to meet the standards. The final deadline for the standards is 1 July 2024, and while that might seem a ways away, the number of properties that still need work will result in landlords fighting against each other to schedule in work.

GreenSide provides insulation, heat pumps, and ventilation for the Auckland region, most of the Waikato, and the western Bay of Plenty regions. Get in touch with us today to get your property sorted before the deadline.