The $880 million bill looming for Kiwi landlords

The AM Show 01/07/2019

Hundreds of thousands of renters could soon be $4000 richer according to a property expert.   

From Monday they'll be entitled to that much in penalties from their landlord, if their home hasn't been properly insulated.

In June the Ministry of Business, Innovation and Employment estimated up to 100,000 properties still don't meet the standards - but Ashley Church, former head of the Property Institute of New Zealand, thinks there could be as many as 220,000 - a third of all rentals.

He told The AM Show landlords are running a business, and like any other business, should ensure they follow the law.

"I generally defend these guys - they're a sector that I think is under siege from the Government in a lot of other ways. 

"But this is a piece of legislation introduced by Nick Smith, by National, back in 2015."

They were given four years to prepare for it.

If there are 220,000 uninsulated rentals and every single tenant got paid out $4000, the total would be $880 million.

Dr Smith posted on Facebook he was "feeling proud" to finally have the new rules in place, calling it the "final part of a program from Key/English Government that has seen a million people in warmer, drier homes". 

MBIE has said it will not be granting landlords extensions, despite there probably not being enough materials and workforce capacity to insulate every home in the next few weeks. But Church has no sympathy for landlords who've left it to the last-minute - and beyond.

"That's a consequence of the fact that we've got a fairly large number of landlords who have waited to this stage to actually do something. If we were required to get this done over the next couple of weeks it would be impossible... it's going to take six or seven months to get through this, and that's assuming that the landlords who haven't done it actually get on and get it done."

There are no excuses, he says - landlords who can't afford to pay for it up front can talk to their local council and pay it off through rates. 

"This is as basic as making sure you comply with legislation that relates to your business."

If you're not going to do this, how seriously are you taking your business?

Green Party MP Marama Davidson also has no sympathy.

"Every winter, thousands of children, elderly people are sick, are hospitalised, because of cold and unhealthy homes. It's simply not good enough - more and more New Zealanders are renting now."

Tenants living in uninsulated homes need to go to the Tenancy Tribunal in order to claim the $4000 penalty. 

The landlord can be fined $4000 and the money paid to the tenant. 

Despite the sheer numbers of uninsulated homes that may be out there, Church doesn't expect a tsunami of claims right away - but that could change.

The worry I've got is it'll become an avalanche.

"A few people will do it, they'll be successful, then suddenly there will be a whole heap of them."

And it might not stop there. These new regulations are based on what National wanted - Labour's tougher rules kick in from 2021, which include mandatory heaters, extraction fans or rangehoods and ground moisture barriers.

"We've got the healthy homes standards which are also coming in, in a couple of years," said Property Investors' Federation president Andrew King.

"We've got two years now to actually provide even more insulation, to provide heating and ventilation to the property."

King's estimate of the number of uninsulated rentals is far lower than Church's, at about 4 percent. 

The AM Show / Newshub reporter Dan Satherly