The rental industry has evolved significantly over the past five years. A business that once relied on goodwill and personal judgement is now layered with new legislation, propelling landlords and property investors into a more professional environment. A pillar of this progression has been the Healthy Homes Standards which became law on 1 July 2019.
Studies prove that the need for the Healthy Homes Standards was imperative. New Zealand’s rental housing stock has traditionally consisted of old homes that may not have been able to reach the minimum indoor temperature of 18˚C, as recommended by the World Health Organisation (WHO). Without adequate insulation, heating, ventilation, draught stopping and moisture management, the wellbeing of tenants can be put at risk. By creating this piece of legislation, the Government has set expectations for both tenants and landlords, providing clarity for all parties and safer homes for renters in New Zealand. This is a change that we’ve welcomed warmly, working diligently with our clients to ensure they meet compliance deadlines. However, said deadlines are where it gets a little hazy.
The rollout for the Healthy Homes Standards was planned over five years, with a number of different Healthy Homes compliance dates applying. It is easy to see how the various dates have caused some confusion amongst property investors and tenants.
All boarding houses are required to comply by 1 July 2021 and all Kāinga Ora and registered Community Housing Provider houses need to comply by 1 July 2023.
All private landlords are required to comply by 1 July 2024, unless you have a new or renewed tenancy, which is then much earlier, with Tenancy Services stating, “all private rentals must comply within 90 days of any new or renewed tenancy from 1 July 2021”.
More information on compliance timeframes can be found here.
This sense of uncertainty amongst investors has been exacerbated by the Residential Tenancies Amendment Act 2020 (RTAA). The RTAA introduced changes to how tenancies are renewed and terminated, with fixed-term tenancies that were signed after 11 February 2021 automatically rolling into periodic tenancies at the end of their fixed-term, unless otherwise agreed by both parties. This automatic shift in the type of tenancy poses the question, ‘what is a renewed tenancy?’ and as a result, ‘if a fixed-term tenancy is extended after 1 July 2021 but not ‘renewed’, when does the property need to comply with the Healthy Homes Standards?’.
In response to this confusion, MBIE initially advised that an ‘extension’ of a fixed-term tenancy was the same as a renewal when it comes to Healthy Home compliance. However, this position has now been changed, with Tenancy Services Senior Engagement Advisor Raymond Suen explaining, “An extension of a fixed-term tenancy agreement, given that only the end date is changed, will not affect the healthy homes compliance date. The compliance date will then be either 1 July 2024 (for private rentals), or within 90 days of a new or renewed tenancy.”
More information on how the type of change to a Tenancy Agreement will have an impact on the Healthy Homes compliance date and the Residential Tenancies Amendment Act 2020 law changes that apply, available here .
So, what does this all actually mean for owners of private rental properties?
When do you need to be compliant with the Healthy Homes Standards?
At Quinovic, we’ve been working hard to ensure all of our owners are compliant by 1 July 2021, regardless of whether they are expecting a new or renewed tenancy for the property. The rental industry can be unpredictable at the best of times. As property management experts, our priority is protecting our clients, their investments, and their tenants. If a tenancy was to unexpectedly end and the property was not compliant with the Healthy Homes Standards, it would need to sit vacant until any required work has been completed. We also believe that good, lasting tenancies are a result of strong relationships with tenants, which the Healthy Homes Standards contribute to. As such, we strongly recommend that all landlords and property investors also work towards this date of 1 July 2021.
The following compliance dates for private rental properties were sourced from the compliance statement tool, provided by Tenancy Services:
More explanation on the required statements available, click here.
The benefits of legislation like the Healthy Homes Standards are plentiful. They ensure the wellbeing of tenants, they provide clear expectations for both parties, and they encourage positive tenant-landlord relationships. But there is a clear need for completeness of information when releasing new details and updating legislation. To achieve the best rental experience for all parties, legislation needs to be definitive, thorough and easy to understand, empowering both tenants and landlords to make sense of the law and act accordingly. We’re on the right track but there is work to be done.
If you still feel unsure about the compliance dates for the Healthy Homes Standards and what this means for you, get in touch with your local Quinovic office. We’re a nationwide team of property management experts and have managed over 100,000 tenancies since 1988. No matter how big or small your question is, we’ll be happy to help.
