Since Quinovic introduced our Meth Testing Policy last year, methamphetamine (P) consumption and contamination has continued to be a talking point in the media but with the introduction of new standards there is now more clarity.
Many media stories have featured worst case scenarios of contamination by meth labs and the high costs of cleaning up, usually involving replacing interior linings etc. However, the most common issue for most property managers and other property professionals has been an occasional tenant or their guests smoking meth or young adults smoking in their bedroom in a family home.
The Tenancy Tribunal is beginning to expect landlords to have completed a meth test prior to signing up any new tenancy, on the grounds that it is part of the owner’s responsibility to provide the property in a reasonably clean and reasonably tidy state as per their obligations under the Residential Tenancies Act.
This is an important interpretation because if a meth test is not completed prior to the start of a tenancy then any subsequent positive test cannot be blamed on that tenant. And without proof of a clean test the Tribunal may order the landlord to repay the tenant all the rent, plus the bond, accrued during that tenancy.
This repayment scenario has already occurred more than once where landlords have failed to commission a pre- tenancy check. There is also the possibility of a tenant who is aware of this repayment issue and, knowing no test was done prior to the tenancy, contaminates the property deliberately before applying to the Tribunal for repayment of their rent.
NEW STANDARDS
Because the Ministry of Health’s amended guidelines were not legally binding, Standards NZ was tasked with developing a standard for what constitutes a positive test for meth contamination, the cut-off levels for a positive result and what the standard should be for remediation (ie clean-up).
This is now available and can be downloaded for free here at the Standards NZ website by logging in and opening an account.
The key change is that the standard now sets out different levels of the maximum acceptable contamination – one for high-use areas and one for low-use areas. Low-use parts of the dwelling are those areas usually only accessed by an adult for short periods of time, such as roof cavities. Everything else is a high-use area.
The new high-use cut-off to trigger the requirement for decontamination is 1.5 and the low use standard is 3.8. NB Two samples may be needed from larger rooms rather than the one currently required. Other requirements relate to carpet and suitable clean-up requirements.
We expect that the Tenancy Tribunal will work to the NZ Standard in determining whether a property is uninhabitable and whether any compensation is to be paid to a tenant in a meth contaminated tenancy.
Insurance
One major insurer has recently indicated that it will provide meth coverage in landlords’ policies and pay out on their contracts for meth contamination. It is possible in the future that they may require evidence of a clean meth test prior to the start of the tenancy for a rental property insurance claim.
All property owners should check their policies and policy renewal notice for any changes, particularly those sections around illegal and/or hazardous substances.
Meth contamination is also addressed in the Residential Tenancies Amendment Bill No.2, which is currently before parliament and open for submissions until August 22.
One part of the Bill deals with the government response to the Osaki case law decision regarding accidental damage in rental properties and the other deals with meth contamination.
You should read this Bill and understand its implications. The damage part intends that accidental damage is recoverable to an amount equivalent to up to four weeks of rent and the meth sections relate to standards, positive tests, mandatory notice when a positive test occurs and the ability to control remediation standards. It also allows regulations around any issue related to meth contamination.
These sections could be enabled in future to enforce a mandatory meth testing regime so we should be prepared for that.
Anyone looking to purchase investment properties should make any offers to purchase subject to a satisfactory meth test result. A $200-300 test is a small insurance policy when a meth clean-up can easily cost $20,000-30,000.
Please feel free to discuss this issue further with your Quinovic principals.
