If you own or are intending to buy a rental property, it is important you are aware of the recent changes that place obligations on landlords.
The Residential Tenancies Amendment Act 2016 came into force on 1 July 2016 for all residential tenancies.
The aim of the Act is to reduce fire-related fatalities and injuries in residential properties, to make properties warmer, drier and easier to heat and to achieve a faster resolution of abandoned tenancies for landlords.
A rental property must have one working and "qualifying smoke alarm" in the sleeping area, or within three metres of an entry to a sleeping area of a property.
In multi storey units there must be one smoke alarm on each level, or one in the habitable space.
If the property has no existing smoke alarms, long-life photoelectric smoke alarms, or hard-wired smoke alarms have to be installed.
At the beginning of the tenancy, or on installation of smoke alarms, the landlord is responsible for making sure that the smoke alarms are working and also have working batteries. The landlord is also expected to install and replace the smoke alarms in accordance with the manufacturer's recommendations and comply with the standards.
If the landlord fails to comply, this is considered an "unlawful act" and may incur a fine of up to $4,000.00.
The landlord is responsible for the installation and maintenance of smoke alarms in common areas.
The tenant is responsible for compliance during the term of tenancy. If the tenant is in a boarding house they are responsible for replacing batteries in the smoke alarm when the need arises in the tenant's room.
If the tenant causes or interferes with a smoke alarm which renders the smoke alarm inoperative and interferes with means of escape from fire, then this is considered an unlawful act by the tenant. The tenant could be liable for a fine of up to $3,000.00.
The responsibility of the tenant is to replace batteries in the smoke alarm when required and this responsibility should be noted in the Tenancy Agreement.
The tenant is required to report defective smoke alarms to the landlord.
The installation of qualifying ceiling and subfloor insulation in Social Housing (that is heavily subsidised by the Government) was required by 1 July 2016. All other tenancies, including boarding houses, are required to meet the new insulation requirements by 1 July 2019.
Landlords are now required to provide information to their tenants about the location, type and condition of all insulation from 1 July 2016.
Landlords are not to install or repair conductive insulation (foil) and ideally this type of insulation should be replaced. This type of insulation is also banned in residential homes. If this ban is breached the landlord may be liable to a fine of up to $200,000.00.
The landlord may make a statement that the insulation is unknown and the landlord has made all reasonable efforts to obtain the required information.
There are exemptions for insulation requirements, including properties where it is physically impracticable to retrofit due to limited floor space, or inaccessible ceilings.
Exemptions are also available for properties that are sold and then immediately rented back to the former owner-occupier for a period of up to 12 months, or where 12 months from the start of the tenancy, the landlord intends to demolish or substantially rebuild parts of the property. The landlord will need evidence they have applied for the relevant resource or building consent for this work.
If any issues are unable to be resolved by the parties, tenants have the option of mediation and/or escalating the matter to the Tenancy Tribunal. The Tenancy Tribunal can make work orders, and if the landlord does not comply with a work order, the tenant may carry out the work and offset the cost against any rent due.
If the tenant does not comply with a work order, the landlord may treat the funds owing as rent arrears and this amount can then be enforceable.
If a landlord suspects a property has been abandoned and the rent is at least 14 days overdue, a landlord can now enter the property 24 hours after giving notice to confirm their suspicion that the property has been abandoned, even if the property has been inspected in the last four weeks.
The landlord must have reasonable grounds to support their application for suspecting abandonment.
The abuse of this power by a landlord will constitute a breach of tenant privacy with a fine of $2,000.00 if the landlord uses force or the threat of force to enter. If the landlord enters without proper permission in respect of rent being in arrears and a reasonable suspicion, then the penalty could be up to $1,000.00.
Any application by the landlord to the Tenancy Tribunal can be heard without a hearing within 10 working days of receipt of the application, subject to the landlord providing contact details for the tenant provided in the Tenancy Agreement and the application goes uncontested by the tenant.
Buying and selling rental properties
Prospective Vendors and Purchasers of rental properties need to be aware of these new requirements and make this part of their due diligence to ensure compliance with the warranties under the Agreement for Sale and Purchase Agreement.
It is wise for any Purchasers of any rental properties to ask the party doing the building inspection and/or building report to check the type of insulation at the property.
Vendors need to be aware that most agreements contain a warranty that the chattels and all systems and devices are delivered at settlement in good working order. The Vendor will need to disclose any outstanding notices from the tenant, including a notice that there is a defective alarm at the property.