Important changes to residential tenancies

November 28, 2016

in Property

iStock_000060122596_SmallFrom 1 July 2016 changes to the Residential Tenancies Act have some significant impact for residential property and particularly residential investment property.

Smoke alarms are now a mandatory requirement for all residential tenancies.  There are various obligations in terms of the type and positioning of a smoke alarm on a residential property.

Landlords are now responsible for making sure the smoke alarms are in working order at the beginning of every new tenancy including having working batteries.  Significant penalties can apply for breach of these obligations.

Another requirement that is already in force is that every residential tenancy agreement signed after 1 July 2016 must have an insulation statement.  That is a prescribed statement which provides particular information about the insulation in the home or an explanation as to why that information is not available.  The information required in that statement is compulsory.

The second requirement regarding insulation is currently on the horizon.  At present any new building must meet current insulation standards to obtain a code compliance certificate and accordingly any new buildings should automatically meet the standard which will be applying to other buildings as of 1 July 2019.  As of 1 July 2019 all properties that are subject to residential tenancy must meet a certain standard of insulation.  That requirement relates to underfloor and ceiling insulation but not walls.

Landlords are banned from installing or repairing conductive insulation (such as foil) and it’s likely that most landlords should now consider replacement of any such installation if it already exists.

Conductive type insulation has also been banned in residential homes.  The Building Act composes significant fines for breaches of this ban.

With approximately 31 months at the time of writing this column before the rule takes effect there is time now to plan and budget, including dealing with issues around potential disruption to your tenants.  Those considerations will be multiplied for anyone with a portfolio of residential tenancy properties, who will need to coordinate timing, budget, tenancy disruption, and the availability of tradesmen across multiple properties.

There are some city and district councils which will let you put your insulation costs onto your rates to make coming up to standard more affordable for you.

All of the above adds up to the fact that it is better to get started now while there is no panic and no urgency rather than wait until the last minute when everybody else who has done the same thing is trying to engage the same person to do more work than they can simply be asked to do.

Further information on the insulation requirements is available at the Tenancy Services website.

Buyers who are looking at residential property should now consider requesting building inspections to ascertain the nature of the insulation or if insulation exists at all.  Certainly if conductive insulation exists on the property the purchaser must consider the implications and whether or not they wish to proceed with the purchase.

Owners should also be aware that these obligations will have relevance to insurance cover and potentially invalidating insurance cover where they have not been complied with.  Owners should take careful note to check their insurance policies and be very clear on what their obligations are in respect to these new provisions as far as their insurance company is concerned to ensure they maintain cover.

We provide a wide range of services on a regular basis to a number of clients in the residential investment arena.  Should you have any queries, please contact us.

If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:

Wallace Revell
09 379 0055 or 03 477 8870


The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain. 

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