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Compliance Concerns

Compliance Concerns

The deadline for getting homes with new or renewed tenancies up to Healthy Homes standards has now passed. We talk to those on the ground about the state of New Zealand’s rental stock and the new industry that has sprung up around compliance. Joanna Mathers writes.

By: Joanna Mathers

1 September 2021

The Healthy Homes deadline for new or renewed tenancies has been and gone. As most landlords will know, July 1 marked the beginning of the standards coming into effect, with all property investors given 90 days (or October 1) to bring their homes up to grade.

But according to information received by New Zealand Property Investor magazine (as reported in the August issue) there is a high rate of non-compliance which, on the face of it, seems concerning. New Zealand Green Building Council has stated that around 90% of the homes their HomeFit assessors are checking fail the standards check. New Zealand Green Building Council has an online tool with which landlords can judge if their homes are up to standard.

“It's anecdotal,” says Tom Furley from Green Building Council. “But [our assessors] are reporting an overwhelming amount on non-compliance.”

But this experience is far from universal. Sharon Cullwick from New Zealand Property Investors’ Federation says the feedback it is getting indicates that landlords have been very proactive when it comes to getting their homes up to scratch.

“In my area, Hawke’s Bay, property managers have really been pushing for early compliance with the standards,” she says. “It’s really only the people with stable tenants, who have until 2024 to get their homes up to standard, who may not have their homes ready yet.”

Nikolas Gladiadis is the managing director of Tasman Compliance Group. Formerly focusing on meth testing for rental properties, the company has moved into the auditing space, and now also offers home checks for landlords wanting to assure their homes are up to standard. He says that he is finding very few properties with major non-compliance issues.

“The vast majority of houses that we are checking are up to standard,” he says. “Issues of non-compliance are very slim.”
Where there are issues, they are relatively minor, he shares. “[Possibly the most common issue] is draught gapping,” he says. “There can only be a maximum gap of 3mm around windows and doors.”
He says that they also encounter noisy fans (an indication that they might be on the way out) which they will point out to clients. “It’s often a matter of letting people know about issues that could be problematic in the future."

New Zealand Green Building Council’s HomeFit team and Tasman Compliance Group represent a new sector that has sprung up in the wake of the Healthy Homes standards. The standards are complex and the compliance statement long and somewhat confusing for laypeople: landlords who are unsure are increasingly calling on those with deeper knowledge to help out.

Damp homes can cause major health issues for families.

There is concern that the standards for new builds are lower than those required by Healthy Homes rules.

They will pay for reports outlining whether their rental properties are adhering to the standards, but there’s a catch. None of these assessors are qualified (there is no qualification) so there’s no guarantee they are doing a decent job, or any comeback if there are issues. And the charges for assessments vary considerably, ranging between $120 and $1,000+.

Gladiadis says that the industry needs regulating and that it is “unclear” whether it’s on the radar in the near future. He says his company is committed to high quality checks, using “the spirit of the regulation” as guidance.

Despite mainstream media commentary to the contrary, Gladiadis believes that there is support for the Healthy Homes standards, from both tenants and landlords.

“Nobody argues with the wholesome goals of the legislation; to reach a point where every Kiwi has access to warm, well ventilated and safe places to live and work,” he says.
“Like most people, I don’t necessarily agree with every policy of successive Governments, but our company has been established with a belief that Healthy Homes regulations will survive successive Governments; it’s a good idea. The property sector just has to keep looking at ways to help it succeed.”

However, there are still some issues in the standards that may need ironing out. Cullwick points to the fact that the Healthy Homes standards are actually more stringent than the Building Code, which is an issue for new builds.

“New homes are failing the HHS because builders don’t have to meet the HHS, just the Building Code which is not up to the same level. Investors are buying new homes and then having to renovate them to meet the HHS, particularly around heating,” Cullwick stated in the August issue.

She also feels that the standards are taking housing stock out of the market at a time when it’s needed most.

“I know a Hamilton developer who was housing people in properties that would have been demolished when the development takes place. It would have cost too much to bring them all up to standard for such a short time, so they are all sitting empty.”

There is also confusion around compliance. Cullwick says that she has heard of members of the Tenancy Services’ compliance and investigations team door knocking and asking tenants if they can check the state of the house (note, this is anecdotal).

It’s generally understood that tenants can contact Tenancy Services around a breach of the standards and the compliance and investigations team will start an investigation. But there is not a huge amount of information around this process available online.

Nevertheless, the Healthy Homes standards should do a lot to raise the quality of rental stock around the country, which should be a win-win for both landlords and tenants.