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Insulate or you’ll pay

Insulation in rental properties has been compulsory since July this year but some landlords aren’t up with the play and recent Tenancy Tribunal rulings show it’s now costing them.


1 October 2019

It’s now a legal requirement that rental properties must have ceiling and underfloor insulation. It has been since July 1 this year. But while that date was D-Day, the fact that insulation was to become compulsory has been well-known since 2016.

As D-Day approached, there was a flurry of insulation activity as landlords rushed to get their properties compliant*. The majority met that target but some did not and, as tenants can now go to the Tenancy Tribunal over the issue, we are starting to see a slew of insulation rulings come through. And they haven’t gone well for the landlords.

In the first insulation case to hit the Tribunal, Kaimai Real Estate v Gamman [2019], the tenants had been raising the issue of insulation for over a year. But the landlord hadn’t arranged an assessment until near the deadline and the property remained uninsulated at the time of the hearing.

The adjudicator found this was a INSULATE OR YOU’LL PAY breach which was an unlawful act. As the landlord was fully aware of the obligation to be compliant, the act was found to be intentional. The landlord was ordered to pay exemplary damages of $1,500 and given a work order to have the property insulated immediately.

In another recent Tribunal ruling, Spense v Choi & Rumble & Wana [2019], the landlord was ordered to pay a larger penalty. The property manager in this case had attempted to get the landlord to arrange installation of insulation since early 2018. But the landlord did not start to do so until August this year – which was well past the deadline.

At the time of the hearing, insulation had still not been installed although it was scheduled to be done. According to the property manager, the landlord left it too late to give a final instruction and then under-estimated the wait time.

The Tribunal found the landlord chose to ignore his obligation until it was too late, which meant the tenants were experiencing winter without qualifying insulation. It found that it was in the public interest that landlords comply with the requirements and ordered the landlord to pay $2,700 exemplary damages.

Providing an accurate insulation statement in the tenancy agreement is also now a legal requirement. Failing to do so is a breach and another recent Tribunal ruling, Edgar v Callanan [2019], highlights this.

While the case involved multiple matters, the provision of an inadequate insulation statement was prime among them. The Tribunal found that while there were some references to insulation in the tenancy agreement, they did not fully comply with the statutory requirements in this area. Further, it found that the noncompliance was intentional.

This, along with the failure to have qualifying insulation installed by July 1, meant the landlord was ordered to pay compensation of $1,470 to the tenants. *Failure to comply can attract an award of exemplary damages up to a maximum of $4,000. Any landlords who don’t comply with the insulation requirements after paying a penalty face further action, according to MBIE. ■

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