Unlawful dwelling case highlights the risks to landlords

Tenancy Tribunal ruling is a wake-up call as landlord tries to contract out of their responsibilities

As we face a year of unprecedented change, a small but highly important law change last year will have a major impact on landlords and Property Managers and we are not talking about Healthy Homes or insulation. Back in August 2019, we witnessed the passing of the Residential Tenancies Amendment Bill No 2. Although this bill is better known for changes to tenant liability following the Osaki case, the passing of this bill witnessed another significant change. It gave the Tenancy Tribunal jurisdiction to make rulings on any premises used as a place of residence including unlawful dwellings. Sleepouts, converted garages and additional dwellings on land without a separate title all fall into this category. There are many landlords who have extra dwellings such as self-contained sleepouts which will also likely have consent. However, can a landlord rent out a separate dwelling that is on a title with another property? And are landlords able to contract out of RTA?

If we follow the ruling made in a recent Tenancy Tribunal case, apparently the answer is no.

Lobarinas v Zhan: Trying to contract out of the RTA and what constitutes a tenant?

A great example of this change in legislation is the complex Tenancy Tribunal case of Lobarinas (Tenant)  v Zhan (Landlord) which took place in December 2019. This recent case highlights the significance in the changes of legislation and provides an excellent example of how a landlord attempting to contract out of the Residential Tenancies Act (RTA) simply backfired.

The background of this Tribunal case is as follows.

  • The landlord (Ms Zhan) rented out a separate dwelling which was attached to the main dwelling which Zhan lived in. This was not done under a Residential Tenancies Agreement but instead done as a House Sharing Agreement meaning that Ms Zhan was attempting to contract out of the RTA.
  • Zhan argued that the occupant (Mr Lobarinas) was not a tenant but instead a flatmate.
  • Zhan collected a bond but failed to lodge it with Tenancy Services.
  • Zhan gave 42 days notice to Lobarinas as her daughter was coming to reside at the premises over the Christmas period.
  • The extension to the dwelling was consented but not as a separate household or title.
  • Lobarinas lived in the separate dwelling without access to the main household. The dwelling also had a separate meter for electricity. 
  • Lobarinas argued that he was a tenant and not a housemate and the notice that the landlord gave him to vacate was incorrect.

The case brings a number of alleged breaches of the RTA and some interesting questions. Alleged breaches include renting out an unlawful dwelling, giving incorrect notice to vacate, failing to lodge the bond, a breach of quiet enjoyment and contracting out of the RTA. 

When is a household unit an unlawful dwelling?

This case becomes more interesting as it asks and establishes the following three key questions.

  • When does a person residing in property become a tenant?
  • What is an unlawful residential dwelling?
  • Can a landlord contract out of the RTA?

Lobarinas argued that he was induced to enter into a ‘House Sharing Agreement’ in an attempt by the landlord to contract out of the RTA. However, because Lobarinas lived in a separate household unit and there were no shared common facilities, he was a tenant and not a housemate. Therefore, the notice he had been issued to vacate was invalid and the normal provisions of the RTA applied.

The adjudicator agreed with Lobarinas and awarded damages against Zhan. Adjudicator Hogan correctly concluded the following breaches had occurred.

  • Lobarinas was, in fact, a tenant and not a housemate. This is because the premises was separate to the main dwelling. Lobarinas never had access to and could not share the facilities of the main dwelling. Therefore there were two separate dwellings on the one title.
  • The RTA defines residential premises as “any premises used or intended for occupation by any person as a place of residence, whether or not the occupation or intended occupation for residential purposes is or would be unlawful”. This was Mr Lobarinas’s home and as such, the RTA applied. 
  • Although the extension had consent, it did not consent as a separate dwelling. The title showed only one dwelling. Because of this, the adjudicator ruled that this was an unlawful residential premise.
It is essential that landlords have the correct consents in place before they rent out their properties. Tribunal has been given plenty of power.

This meant that Zhan’s attempt to contract out of the RTA had failed. For Ms Zhan to continue to rent out the separate dwelling in the future, she would have to obtain consent from the local council as there was a change of use to the premises. This is stipulated under section 115 of the Building Act

It could have been worse!

It could have been worse for Ms Zhan. The adjudicator could have issued a work order against the landlord to get consent but chose not to do so. This brings into play an entirely new section of the RTA. Section 78A is about orders that Tenancy Tribunal has the ability to make in regards to unlawful dwellings. A worst-case scenario here could have been that Zhan would have had to have paid rent back to the tenant and Tribunal could have issued a Work Order meaning that the landlord would have to go to the council to get the correct consent. They could have also had to pay significant money to the tenant in exemplary damages as the landlord had breached their responsibilities and had committed a prohibited transaction which is a breach of section 137 of the RTA.

This did not happen. The landlord only had to pay $2,055.44 which was made up of general damages for stress and quiet enjoyment, compensation for two invalid vacate notices and exemplary damages for failing to lodge the bond. 

What probably helped Ms Zhan was that Lobarinas indicated to the adjudicator that the premises were in fact very comfortable. The adjudicator explained to Ms Zhan that she could use a House Sharing Agreement but this meant that any occupant must have full access to the entire premises and not just the separate dwelling. As things stand, the premises could not be rented out again until consent had been issued.

Click here to view the case

Lessons to be learnt

In conclusion, there are multiple lessons for landlords and Property Managers when examining this case. If you have a converted sleepout or a separate dwelling that you want to rent out, you must ensure you do the following.

  • Make sure the premises have the correct consent and are on a separate title. Section 45.1(c) of the RTA states that the landlord must comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises. Therefore if the premises do not have consent the landlord is in breach of their responsibilities. Penalties for this are not insignificant and are only going to increase when proposed changes to the RTA are passed and become law.
  • You cannot contract out of the RTA. Section 11 of the RTA states any attempt to enter into an agreement between a landlord and a tenant that is inconsistent with the RTA will have no effect. Also, by writing clauses into a Tenancy Agreement that are classed as prohibited transactions, the landlord is potentially committing an unlawful act.
  • As there was a Tenancy Agreement in place the landlord had given incorrect notice to the tenant as the daughter to Ms Zhan was only temporarily staying at the premises. It was not their principal place of residence. They had also failed to lodge the bond within the appropriate timeframe. 
  • You can get a housemate but you cannot restrict them to a separate dwelling, they must have use of the entire premises.
  • If the landlord wants to put it on short term accommodation platforms such as Airbnb or Bookings.com, then they are free to do this as the RTA would not apply. However, expect local authorities to become more diligent with policing and taxing these accommodation providers as the increase in Airbnb is contributing to a shortage of stock.

So, can a landlord contract out of the RTA?

The simple answer is no. If you are going to rent out a dwelling, always ensure that you have the correct consents to do so. If you are unsure, do not rent it out without proof. Getting it wrong can be a costly mistake with dier consequences for both Property Managers and landlords.

I am often critical of the Tenancy Tribunal process and around inconsistencies that we see in some of the orders, but in this case, I think the adjudicator got this correct. This case is a great example of what can go wrong when you take short cuts. Don't get caught out.


The Good, Bad and Ugly for 2019

Government intervention the theme of the year as we take our traditional look at the last 12 months.

It hasn’t been an easy year for anybody associated with our industry. In terms of renting in New Zealand, 2019 continued where 2018 left off. Changes in legislation. Landlords complaining about too much state intervention and tenants complaining about high rents and a shortage of stock.

Don’t expect too much to change in 2020 as this Government tries to implement all of its election promises before we all head to the polling booths again.

Anyway, it is time for us to take a look back on what was another eventful year for our industry as we take our now annual review of the year which includes the good, bad and ugly for 2019.

The Good

The Call For Change Campaign: It has been difficult to find any real positives in a challenging year, but the launch of A Call For Change campaign launched by REINZ back in September in an attempt to regulate the Property Management industry has probably been the best. On the last count, nearly 80 agencies, Property Management companies, advocacy groups and community organisations are now supporting this. 

The launch of 'A Call For Change' was our highlight of 2019 but more needs to be done.

There is no doubt that since Bindi Norwell was appointed as CEO of REINZ, there has been a real focus by the organisation to raise the profile of Property Management. For the first time ever, REINZ has appointed a resource who is solely dedicated to Property Management in Jo Rae, the Head of Property Management. 

In the past, people have been critical of REINZ with their attitude and apparent lack of dedication to Property Management. There may have been some validity in this argument in the past, but no one can accuse REINZ of paying lip service to the industry now. REINZ has showed renewed focus and long may it continue.

It hasn't all been positive however around the campaign. It desperately needs to keep the momentum going and there is a risk that it could run out of steam as other things become a focus or a priority for REINZ. The campaign has also been discredited by PROMINZ, the newly branded Property Management Institute of New Zealand, after their President, David Pearse called the campaign a ‘Cunning and devious plan’ designed to promote REINZ Property Managers. This was during an interview held on Radio New Zealand Morning Report programme.

Listen to the Morning Report interview with Bindi Norwell and David Pearse

Some of Mr Pearse’s comments have been nothing short of outrageous. He was also quoted in the New Zealand Herald stating “Real Estate agencies gave poor service because of their greed and making property managers into slaves by having them manage up to three times the number of properties that they can effectively manage." Comments such as this only damages our industry further, and if someone is going to make comments like this, they have to back it up with facts and not solely their own personal opinion. For the campaign to get further momentum, PROMINZ would be doing our industry a service by putting their support to this campaign. I'm sure A Call For Change was not designed to be a 'REINZ are better than the rest' campaign, the greater good means all organisations should get behind this regardless of what you are a member of.

That aside, the industry slowly but surely is starting to find a voice. As an industry, we manage over 40% of the 600,000 rental properties and this number will only continue to grow. 

Although new Associate Housing Minister Kris Faafoi has initially ruled out the regulation of the industry, I for one am confident that they will recognise the importance of having some structure and regulation around Property Management. Over a quarter a million of residential dwellings are now under the management of a Property Manager so surely it is only a matter of time before the change actually does happen.

Other mentions: 

The rise of Proptech: Property Technology companies or Proptech as it is more commonly known is a hugely exciting development for our industry. Many are headed by young entrepreneurs who are challenging the status quo. At our conference that we held with Palace in March, Michael Abbott, the CEO of Palace said that the Property Management industry was in its infancy. Those comments stuck with me as we are finally starting to learn how to use the data our industry creates. I for one wholeheartedly agree. Also, you have to give credit to the Privacy Commissioner who listened to the criticism of their original guidelines and reformed them to give more clarity as to what you can and cannot ask for when selecting a tenant.

The Bad

Swamp House Tribunal Decision: Remember the ‘Papakura swamp house?’

We reported on the dilemma of tenants Dawn Robbie and Cameron Taylor last December. This young couple with their two daughters rented their three-bedroom property in Papakura. Unknown to them when they rented the property, blocked drains and malfunctioning stormwater lead to an ankle-deep swamp under the property and an unusable flooded yard every time it rained.

Underneath the infamous Papakura Swamp House. Atrocious conditions for the tenants to tolerate.

Their 11-month-old daughter at the time had serious health issues and was admitted to the ICU unit in Middlemore Hospital due to severe bronchitis that was brought on by mould in the property. All of this for $520 a week in rent.

The Tenancy Compliance Investigation Team took the landlord to Tenancy Tribunal on behalf of the tenants and even went to the lengths of getting the tenants to sign an NDA so they could not talk to the media about the case.

They finally had their day in Tenancy Tribunal in November 2019 and this looked a straight forward case. The landlord had clearly breached their responsibilities due to the flooding and damage caused by the flooding. The tenant's health had been severely affected by the poor condition of the property and compensation was certainly due. Tribunal agreed yet the sum of money paid out to the tenants was pitiful for what this couple had to tolerate. Compensation of $4,000 and exemplary damages of only $1,000 were awarded to the tenants. The latter was only 25% of the maximum penalty that could be awarded by the adjudicator. Why so little?

When you read the decision which is available online it leaves you scratching your head and asking yourself has justice really been served? You also have to question the ability and judgment of the adjudicator. Adjudicator Benvie makes reference to Boarding House legislation which is utterly irrelevant. Then the adjudicator defends the decision by saying that the landlord did not intentionally commit the breach. This is ridiculous. According to Adjudicator Benvie, the landlord must deliberately flood the property to be liable for the full amount of exemplary damages. As if a landlord is going to do that!

Mr Raj, the landlord, knew it was an issue for an extended period of time and simply did nothing about it. He should have had the book thrown at him. In this case, the punishment nowhere near fitted the crime.

Watch the video about the Papakura swamp house. When you see what the tenants had to tolerate, $5,000 seems like a slap in the face.

Other mentions:

Leaving insulation to the last minute has caused a number of problems for many. The lessons we have to learn from this as we tackle the Healthy Homes is not to leave it to the landlords as many of them simply will not get it done. Also, a shortage of rental stock continues to be a major issue. The current Government promised to eradicate poverty and made housing it’s number one priority in its election campaign of 2017. They even went as far as asking that the then National Government declare a 'National state of emergency' due to the housing crisis. However, people on the waitlist for public housing has now reached 14,000. This has more than doubled since the Coalition Government came to power. Many of these families are now falling into the private rental sector. The approach of targeting landlords has backfired and I still do not see any state of emergency being declared.

The Ugly

Property Managers continue to face risk and abuse: With property, there is always lots of emotion. For landlords, in many cases, it is their nest egg and they may have previously lived in the property meaning that they will have a strong emotional attachment to the property. For tenants, it is their home and many are paying over-inflated prices for a second hand and substandard product.

With this, the financial pressure that is placed on both landlord and tenant has grown in large down to Government policies. The pressure leads to aggression and abuse as Property Managers often become scapegoats to problems that they cannot control. Other factors that have led to the rise in abuse are Property Managers simply trying to educate landlords on what they need to do to have a compliant property. Many landlords do not like it as the costs associated with compliance continue to hurt margins. This will only continue as we inspect the thousands of rental properties for compliance with the Healthy Homes Standards.

Tenants can also be abusive and we have heard of direct threats of violence to Property Managers. Social Media also does not help. Tenants and their associates vent and sometimes become abusive online. This is gutless but unfortunately, it now comes with the territory. 

More needs to be done to protect Property Managers from abusive clients and a ‘zero tolerance’ approach should be taken by our industry. This is where the 90-Day No-cause termination has its place. There is simply no need for the removal of this as tenants already have plenty of rights to protect them from being evicted unfairly.

It has been over two years since our industry was rocked by the shooting of two Property Managers in Northland. Has anything changed?

I cannot help but feel that we have failed to learn lessons from the tragic events of two years ago when two Property Managers were shot dead by a tenant. Property Managers walk into difficult situations all the time and the job can almost feel more like being a social worker rather than a Property Manager. As the financial burden of renting continues to see more and more families forced into desperate situations, Property Managers are often treated poorly. If it becomes too hard to move on antisocial tenants, this will only get worse. 

More needs to be done in this area going forward particularly if we are to attract and retain good people within the industry. Leaving the 90-day no-cause termination as it is, is a step in the right direction.

Other Mentions:

Anti-social behaviour seems to go unpunished if you are a tenant of Kainga Ora, the organisation that was formerly known as Housing New Zealand. The soft friendly let’s all hold hands together stance that the Government has taken to tenants in state-owned properties is starting to cause some grievances. Recently I received a call from a Hamilton Property Manager seeking advice as they have tenants wanting to break a lease due to their neighbours, Kainga Ora tenants fighting in the street every weekend and threatening neighbours. These gang-affiliated tenants look like they are going to staying for a long time as pleas to Kainga Ora have fallen on deaf ears. There was not a lot I could offer in assistance.

Dealing with tragedy and why our industry does not get the recognition it deserves

2019 has seen some horrendous events in our country and too many families have been struck by tragedy in the last 12 months. The Christchurch shooting was particularly disturbing. As a country, we felt like we lost our innocence on that fateful day in March. Christchurch Property Managers have had to deal with tragedy and disaster in the past following the earthquakes but one Property Manager from Ironbridge won the hearts and minds of all at the LPMA Conference. 

Not long after the shooting, a Property Manager found a tenant hiding whilst doing a routine inspection. This tenant had been in one of the Mosques when the shootings took place and were clearly in a distressed state. The tenant was terrified and in desperate need of help. The Property Manager went above and beyond in helping this tenant. They made sure that the tenant got the support they needed and spent time reassuring the tenant that they would be ok. It is a shame as I cannot remember her name, but it highlights the qualities that we know our industry has. It's funny how stories such as this do not get mentioned in the media.

Make sure that you take good care of yourselves over the holiday period. Have a great Christmas and we will see you in 2020. 

Signing off for 2019

 

David Faulkner


Tenancy Tribunal reform required as no cause termination debate looms

Tenancy Tribunal. Everywhere I go on my travels around this great country, it is the one topic that always gets hotly debated amongst Property Managers and landlords. There is always plenty of emotion that goes with the territory as well. Comments such as “We are having to wait months for our hearing” or “The adjudicator is biased’ are common complaints that I hear. Others are less critical however the consensus of opinion appears to be that Tribunal does favour tenants though these are just opinions and there have never been any conclusive studies done to prove that this is the case.

One thing is for sure, wait times are frustratingly long. Too long, and if the Coalition Government push through reform such as the removal of the 90-day no-cause termination notice, meaning that in many occasions, you will have to go to the Tribunal to get a ruling, they are likely to increase further, and that is going to be unacceptable. If you have to go to Tribunal and wait for six to eight weeks to remove the antisocial tenant, and even then, your going to need sufficient evidence to do so, more small-time ‘Mum and Dad’ investors may leave the market at a time when we desperately need more landlords as rental stock plummets increasing rents further.

With approximately 600,000 rental properties in New Zealand, there are a staggering thirty to forty thousand Tenancy Tribunal applications every year with approximately 50% of them making their way to the Tenancy Tribunal. That means if you take the average length of a tenancy being two years and three months, approximately 10 to 15% of all tenancies will have a dispute worthy of an application to the Tribunal.

Who makes the applications?

Unsurprisingly, it is the landlord who is making the vast majority of the applications. In 2018 over 85% of all applications were made by the landlord and so far year to date up to the end of June, those numbers remain consistent.

But if you take away rent arrears which make up approximately 70% of all applications, you start to get a picture that there are an equal amount of applications and disputes between landlords and tenants.

There are over 50 Tenancy Tribunal adjudicators in New Zealand operating in 38 different locations. This means on average, adjudicators will make rulings on approximately 300 cases per year.

From a Property Management or landlord perspective, going to the Tribunal is a costly and time-consuming exercise, particularly when waiting times can be for so long. From a tenants perspective, you will automatically have second thoughts about taking a landlord to Tribunal as your name will show up in Tenancy Tribunal orders that are publicly available. 

So what can be done to speed up the process and improve the consistency of rulings? 

And what about the jurisdiction of the Tribunal? Do we need to review how it works and what powers it has? How is it monitored for consistency as in many cases I see, the decision-making process seems to vary considerably as to who is making the decision and whether it is against a landlord or a tenant?

This article is by in no way a criticism or beat-up of the Tribunal, more a recommendation as to how it can evolve. We are fortunate to have a disputes resolution process that is both accessible and affordable with Tribunal orders being made public. But with all things in life, change is a constant and the Tenancy Tribunal is no different. Is it too much to ask to get wait times down to two to three weeks for basic disputes and with more serious cases such as matters around health and safety, antisocial behaviour, assault and wilful damage, why not aim to get this down to within a week?

We believe that this is a possibility but it will need radical thinking and change to make this possible. Change in Government departments is typically slow with so much bureaucracy that you have to navigate. It is like a giant cargo ship in the ocean having to change direction so don’t expect change to come quickly.

So, without further ado, we look at a number of reforms that the Tenancy Tribunal should undertake.

  • Removal of rent arrears only cases from Tenancy Tribunal

This is something we have been talking about for over 12 months. As stated earlier, approximately 70% of Tribunal hearings will have a component of rent arrears. Let’s assume that over 50% of these cases are arrears only. If arrears only cases were taken away from the Tribunal, you would remove over one-third of Tribunal hearings and this alone would be lead to a vast reduction in hearing times.

How can we make this work without jeopardising tenants rights and keeping the process fair and transparent?

We think we have found a solution that will protect the rights of tenants and landlords alike.

Firstly, you have to acknowledge what the Tenancy Tribunal is and what its purpose is for. It is there to resolve disputes between landlords and tenants that relate to the Residential Tenancies Act. Now ask yourself this, are rent arrears a dispute or are they more a matter of fact?

There are plenty of grey areas and reasons for disputes between landlords and tenants but rent arrears is not one of them. It is one area that is black and white. You have either paid your rent on time, or you haven’t. Therefore there is no dispute.

How we see this working

It is a complete waste of time for both the landlord and the adjudicator for rent arrears only cases. Typically, the tenant will not even turn up for the hearing and it is more a case of putting a seal on an order. 

An alternative solution is to make rent arrears applications remotely without having to go to Tribunal. On or after the 21st day of the tenant becoming in arrears you simply send the application through with possession and termination automatically granted to the landlord. The landlord would have to send evidence across to prove this is the case. Rent statements, arrears notices, a copy of the Tenancy Agreement and an address for service for the tenant would likely be required. Under section 55 of the Residential Tenancies Act (RTA), the Tribunal shall make an order terminating the tenancy if the Tribunal is satisfied that the tenant is at least 21 days in arrears. 

A remote adjudicator would ensure that the information is correct and write out the orders ending the tenancy and granting possession back to the landlord. Tenants have to be given the right to reply and defend themselves. So the termination and possession order will be granted to the landlord no later than 10 working days from the date of the decision. This gives the tenant the opportunity to seek a rehearing if they can prove that there has been a substantial wrong or miscarriage of justice. This is clearly stated in section 105 of the RTA under Rehearings.

If the tenant can prove that this has happened, then a Tribunal date will be set within 10 working days of the original decision. Either way, you will limit the risk to the landlord to approximately five weeks rent arrears.

If the tenant cannot prove this, the order stands and the tenancy will end. We estimate that there are approximately five to six thousand cases a year like this so there would be a reduction of about 120 cases a week going to the Tribunal. Two remote adjudicators could handle that workload between them.

  • Track and measure decisions to improve consistency

With so many Tribunal orders being made every day, we believe that to help improve consistency, the decisions that adjudicators make should not only be monitored but also measured. With small data comes big opportunities and the Tribunal is no different. 

It would be hugely beneficial for adjudicators to measure their decisions against other adjudicators. If there are inconsistencies between adjudicators then it would be easily identifiable through this process.

It will also give clarity as to how adjudicators decide who is liable when a ruling is made against a Property Manager. Too often, we see rulings made against a Property Management company when they actually have done nothing wrong. Examples of this are around maintenance or non-compliant properties. The owner is responsible for maintaining the premises and too often Property Management companies face exemplary damages because of the actions of their owners. We highlighted this back in our April article, who is liable?

How do we do this?

With over 15,000 decisions being made by over 50 adjudicators, it will be easy to track the performance of each adjudicator and compare their decisions. You will categorise each decision, for example, rent arrears, damages, cleaning and exemplary damages and you will be able to benchmark decisions based on case type, location and adjudicator.

Such a system would identify any inconsistencies in decisions that adjudicators make but more importantly, we would have an excellent tool to educate not just adjudicators, but both tenants and landlords on what likely decisions the Tenancy Tribunal will come up with on certain cases.

Too many applications will be made based on raw emotion rather than fact. Having such a tool in place will mean that applications will typically be made based on factual evidence and case history rather than one party getting wrapped up in emotion and taking matters too personally.

  • Allow anonymity of the applicant

With the Privacy Act being talked about so much within our industry, we believe it is time to ensure that applicants should be able to remain anonymous. Likewise, if you are the defendant and you have had no ruling made against you, you should also have the option if you wish to remain anonymous.

It is in the public interest to have bad landlords and tenants identified however if they have done nothing wrong or they are a victim then is it really in the public interest to have them identified?

As an example, I have a family member who lives in Wellington and is paying a huge amount of rent for what can only be described as a slum. He has shown me pictures of mushrooms growing in the bathroom, rot, mould and damage to the property through fair wear and tear. This two storeys two apartment flat will be earning approximately $1300 a week in rent and I have spoken to the occupants, explaining their rights. However, they are very reluctant to make a claim as they do not want this to hinder future applications for rental properties.

I can well understand this as any prudent Property Manager or Landlord will do a Tribunal search on applicants. 

Tenants should be encouraged to take recalcitrant landlords to the Tribunal without fear of retribution or how it could impact their renting future. Likewise, often Property Managers are named in orders and this can be deeply distressing for them. It can also be a concern for their safety as sometimes decisions are made that they have little control over and they find themselves named in the media and sometimes subjected to online abuse and threats. 

This is totally unacceptable but unfortunately, it is systematic of the world that we live in. Safety and wellbeing have to be the number one priority.

  • Exemplary damages are out of date. Change them.

We believe that penalties that the Tenancy Tribunal can award do not go far enough and have to evolve. Many of the penalties or, as they are known under the RTA, exemplary damages, have not changed in nearly a decade. As rents have increased over the last 10 years, it would make sense that exemplary damages should increase as well.

They are also geographically biased as well. The median rent for Remuera is $730 yet for Gore in Southland it is only $260. Is it fair and reasonable that the landlord or tenant in Gore pays the same fine as the tenant or landlord in Remuera?

We believe that penalties need to be stiffer. Also, we need to take into consideration the amount of rent that is being charged when making decisions. Instead of having a fixed dollar amount, we believe a fairer system would be to base exemplary damages on a percentage of the annualised rental income. For example, the landlord is breaching his or her obligations under section 45 of the RTA, have maximum exemplary damages of 40% of the annualised rent. 

This would ensure that landlords would be severely hit financially if they purposely breached the act. Is a $4,000 penalty really a harsh punishment when a landlord rents out an unlawful premise that is infested with mould and dampness causing the occupants to become sick?

Stiffer penalties will ensure that landlords are more likely to maintain their properties and therefore we should see a reduction in applications by tenants over time. Bad landlords will be exposed and weeded out.

  • Exemplary damages for wilful damage to the premises

Finally, we find it unbelievable that a tenant can smash up a rental property and not face any exemplary damages or criminal prosecution. Section 40 of RTA under Tenant’s Responsibilities does state that tenants cannot intentionally or carelessly damage, or permit any other person to damage the premises. However, if they do this it is not considered to be an unlawful act and exemplary damages cannot be awarded.

This is ridiculous. I can go out onto a street and smash up a neighbours car and I would rightfully face criminal prosecution. However, as a tenant, I can smash up a property and only be liable for the repairs. This is often a lot less than the true cost of repairing the property as adjudicators have to take into account depreciation.

Tenants who wilfully damage the premises that they are renting should also face sanction and severe penalties through the Tribunal. Too often, the mental and financial strain that this causes to landlords is not taken into consideration. Tenants need to know that the consequences of such actions will hit them financially hard and this should prove to be enough of a disincentive to carry out such obscene behaviour.

If tenants are fully aware of this, then we again should see less damage caused to property resulting in fewer Tribunal hearings.

The 90 days no-cause termination. What shall become of it?

It is going to be the most hotly contested debate around the RTA reforms when this Government finally announces them. With all the well-intentioned ideas that the Coalition has, the reality is that ideology alone does not always make good policy. 

We have already seen one ridiculous Tribunal case where a tenant has taken HNZ to Tribunal, trying to get a full refund of rent of up to $26,000. This was after he was sent a written apology and paid $7,000 in compensation after being removed from a rental property which he contaminated following a police raid that discovered evidence of a Methamphetamine lab. The fact that he had the audacity to waste taxpayers money shows that there will always people who will simply not play by the rules and take advantage.

Safety must be the number one priority

Landlords have to have the ability to remove bad tenants quickly. They also should not need to obtain evidence from scared or intimidated neighbours to do so. Likewise, no Property Manager should ever have to tolerate abuse or threats. In a case highlighted in the REINZ weekly publication to its members, a tenant was for some inexplicable reason granted a rehearing after the Property Manager applied for eviction even though the Property Manager could provide evidence of abuse and threats through text messages. 

Safety and wellbeing must come first. If Tribunal can guarantee that cases such as antisocial or aggressive behaviour will be heard and actioned against within seven days of an application, without the need to get statements or evidence, then I would support the removal of the 90 days no-cause termination. A Property Manager taking oath in Tribunal should be sufficient evidence. Is it really worth risking your job over to get rid of a tenant you simply don't like?

If they cannot do this, then the status quo must remain. Tenants have plenty of rights and giving notice through retaliation already comes with a strong penalty. Maybe including this statement into a Tenancy Agreement is the way to go so tenants are fully aware of their rights.

There is no silver bullet to reducing applications, however, we should set a target to do so. It is in everyone’s interest to have a fast, transparent, fair and consistent Tenancy Tribunal process. Let’s hope that this can start a discussion in ways to speed up the process.

David Faulkner

 


The broken dreams of renters united

  • Renters united launch the plan to fix renting
  • Tenant group growing in political influence with heavy weight support

On Wednesday the 11th of July, Renters United launched their 'Plan to Fix Renting' and it grabbed plenty of media attention. This small group of volunteers have certainly been successful in drawing attention to themselves and whether you are a tenant or a landlord, you have to hand it to them they are extremely well run and have some prominent public figures backing their cause.

At the launch, they had Philippa Howden-Chapman of Rental Warrant of Fitness fame presenting and supporting them. They also had Sam Huggard of New Zealand Council of Trade Union presenting and Labour MP for Rongotai Paul Eagle was present as well.

Legitimate concerns or socialism in disguise?


I decided to go along to have a look and listen to what they were proposing and to talk to some of their members. First impressions are that Renters United are a well-meaning group, fighting for the underdog. You have to admire the efforts and commitment of people such as Kate Day and Robert Whittaker who largely run the organisation. There is though an element of the group that is a little concerning with more than a hint of anti-capitalism and pro-socialist about their views. Because of this, it could have a detrimental impact on their credibility.

The fact that there has been absolutely no engagement with landlord groups or the Property Management industry is regrettable. As I wrote in my blog back in February, for every good intention a well-meaning group may have there is likely to be unforeseen consequences that can have a negative impact on what you are trying to achieve. You cannot fix renting without taking off the blinkers and listening to the thoughts and recommendations of Property Managers and landlords alike.

The most compelling of the speakers questioned the whole principle of private land ownership, and was utterly scathing of Property Managers, referring to our industry as 'Opportunistic Profiteering Parasites'. It is all very well to stand on stage and claim that our industry regularly discriminates based on race, sexual orientation, employment status and family status but to then go on and label our entire industry as parasites is a nonsense, hypocritical and discriminatory in itself. Groups like Renters United would do better to engage in meaningful debate with landlords and Property Management groups rather than call upon individuals who draw attention to themselves with such extreme and polarising views.

WHAT IS IN THE PLAN TO FIX RENTING?

What is in the plan?

There are four sections to the plan with 36 points that they want to develop to fix renting. The four sections are as follows.

  • Stable homes
  • Fair rent
  • Safe and healthy homes
  • Meaningful enforcement

Let's tackle each of these issues one by one and grade them out of 10.

Stable homes

The first part of the plan has nine steps that focus on protecting tenants from eviction. Firstly, we agree that a stable home is essential for the well-being of tenants. Stability will be beneficial for all. Children are not uprooted from schools and families will become more engaged with their local communities.

This part of the plan mainly focuses on reasons why a tenancy is ended by a landlord. There is a large emphasis on protecting the tenants against evictions and in particular, no cause evictions. A landlord will have to give a legitimate reason to end a tenancy and the tenant will have the ability to address that reason. This even comes into effect if the landlord has to sell the property. Renters United are proposing that even if a property sells, or the owner wants to reoccupy, this is not a legitimate reason to end a tenancy. If you rent out your property you could potentially be putting the property on the rental market indefinitely.

The only reason to end a tenancy will be for rent arrears, anti-social behaviour and serious damage to the property. Indefinite tenancies could become the norm. Tenants will also be able to make minor alterations to the property and be allowed to have pets. In the event of a landlord giving tenant notice, the tenant will be able to give the landlord 7 days notice. Overall, the ideology around these steps does have some logic. Tenants can stay as long as they want so long as they look after the property and pay the rent on time. Win-win for everyone.

However, the plan fails to take into account the dilemma that many landlords may find themselves in as their circumstances change. A landlord may be forced into either selling the property or having to reoccupy it.

If you do have to sell, who would want to buy a property with a permanent sitting tenant in place? What it will do is reduce the capital value of the property. The only people who will likely purchase the property are either investors or developers. It will not be available for first home buyers.

The accidental landlord could also be forced out of the rental sector. Some people become landlords not through choice but through accident whether it be through divorce, relocation or inheriting a property. If this group of landlords are forced to rent out their property indefinitely they will leave the rental sector adding to a reduction in rental stock and driving up rents even more. These are just some of the unforeseen consequences this type of ideology can create.

I do share the views that too many tenants are forced out of houses quickly when the landlords sell and extending the 42 day notice period may help. However, the recommendations made by Renters United would likely see even more landlords leaving the private rental sector. Landlords should be able to sell their assets in circumstances that suit them. You would see a greater reduction of first home buyers as they would be squeezed out of the market due to lack of available stock. This may lead to a two-tier housing sector with first home buyers forced to pay more as there will be a shortage of supply.

One thing we do agree on is the reduction of the frequency of inspections to every six months after a tenant has occupied a property for one year. Every three months is intrusive and unnecessary however if the tenant is not looking after the property and breaches are issued a landlord should have the opportunity to re-inspect following up on the breaches.
Overall, we give this section a 5 out of 10. The policies are well-meaning but will lead to a further reduction in rental stock.

Fair rent

One of the great misconceptions within the group was that landlords and property managers ramp up rents every six months. I hardly ever see this happening. I see no issue with an annual rent increase as to what they are proposing and tenants already have the power to challenge the landlord through the Tenancy Tribunal for Market Rent. Capping a rent increase goes against the concept of a free market.

The basic rule of economics is supply versus demand. Yes, rents have gone up and slightly ahead of income but the reality of the situation is simply down to a lack of rental stock. Landlords are having to make a significant investment in their properties and want an economic return. The only way this can happen is through rent increases.

This graph is the Housing Affordability Measure for all properties in New Zealand. It is based on the number of occupants of houses that spend more than 30% of their income on accommodation. As you can see, rent has been stable for over 10 years. (sourced from Ministry of Business, Innovation & Employment).

Take a look at Christchurch and Wellington as an example. Christchurch has an oversupply of rental stock available and as such we have seen rents decrease slightly compared to Wellington which has a shortage of stock and subsequently rents have increased. There is no conspiracy between landlords to fix rents in Wellington. There are no landlords preying on students who have had money given to them by the state. The issue has always been that there is not enough stock in Wellington. In particular, three bedroom properties are what New Zealand needs. This is the failure of consecutive central Governments, local councils, poor planning, increased bureaucracy and a lack of foresight. This is not the fault of landlords.

PROPERTIES FOR RENT ON TRADE ME (15TH JULY 2018)

In this chart, we highlight the impact of Supply v Demand. The average weekly rent in Wellington is $488 compared to Christchurch which is $372 (statistics obtained from MBIE) . The only way to control rents is to increase supply. State intervention is not the answer.

If you want to control rents, do not leave it to the state. New Zealand needs a strong private rental sector and if you make it difficult you will see a mass exodus of private landlords. We have already seen this as compliance costs, meth, Osaki have all lead to many landlords saying enough is enough. Let the market decide and build enough rental stock to meet the demand to control rents.

Renters United also seem to have the opinion that landlords own copious amounts of properties and nothing could be further from the truth. The vast majority own only one or two properties.

The final point that Renters United make is to scrap the letting fee. There is a sense of inevitability about this and ultimately the tenants will pay for it with rent increases as companies and landlords attempt to recover the costs.
As with every facet of business, let the market decide, not the state. If you want rents to be stable we need more stock.
This will have the opposite effect. 2 out of 10.

Safe and healthy homes

This is one section that Renters United and I agree on the majority of the proposals.

I have always argued that if you are a landlord you have a social responsibility to provide a warm dry house and as a nation, we will all collectively benefit if our housing stock is warm and dry.

The Healthy Homes Guarantee Bill will go a long way to sorting out the rental stock of New Zealand but it will take time to fix simply due to a lack of tradespeople.

A concern I have about their proposal is that there seems to be an over-emphasis on compliance with the Rental Warrant of Fitness being implemented along with a Rental Housing Quality Grade system. One or the other should suffice, having both is further unnecessary cost put on landlords and on the tax-payer. More bureaucracy, more cost.

There is also a suggestion that local councils can supplement national standards with their own specific regional needs such as ventilation in warmer climates. This is all very well but why would you limit the proposals to just rental properties? Surely all residential housing needs to come under such legislation.

One potential flaw in the plan is that if they try to rush this through, then time may be an issue. I suspect we will see a number of non-compliant rental properties this time next year due to a lack of insulation. If standards are set and the timeframe for compliance is too short we may see thousands of rental properties left derelict as the cost of getting older properties compliant will not make financial sense. This will again lead to a reduction in available rental stock and drive up rents further.
The majority of this we are onboard with 7 out of 10.

The plan to fix enforcement

Some of this we are 100% behind such as the regulation of Property Managers. I even support increasing sanctions on landlords who are in breach of the Residential Tenancies Act. There is also the recommendation that a landlords register is adopted along with a register of every rental property. The data that will be accumulated will be extremely valuable to track trends such as rents, length of tenancies and track compliance.

Whoe does tenancy tribunal favour. Vote now.

Some of the suggestions though are unbalanced. Renters United claim that the disputes process is unfair, with a power imbalance in favour of the landlord.

The current system is in our opinion extremely fair and if anything there is a bias towards the tenant. Look at the implication of the Osaki case. Tenants have no responsibility in terms of accidental damage and many, including myself, feel that this has swung too far in the tenant's favour.

Overhauling the whole disputes process including Mediation and Tribunal would be a massively expensive and an unnecessary process. Some of the changes they propose around changing Tenancy Tribunals to become focused on investigation and establishing the facts seems to be exactly what we have now. Tenancy Services provides a useful service for tenants and landlords.

The reality is tenants have plenty of rights. The main issue is that the vast majority of tenants do not know how to exercise them or simply cannot be bothered.

Another interesting idea is to anonymise tenants who appear in Tribunal so they do not fear standing up for their rights. This can work but only under special circumstances such as when the tenant applies to the Tribunal. They can be given the choice to remain anonymous and it must only apply when they are successful in their claim or when the tenant's safety is compromised.

The concept around this is that every tenant is a victim, yet there are plenty of landlords who are victims of bad and unscrupulous tenants.

The feeling that tenants are victimised through the disputes process is completely unfounded and highlights the deficiencies in this whole plan. It is too one-sided with no input from the other side. If you asked Property Managers who are dealing with disputes who the system favours, I would suspect the majority would say the tenant.
Some of this is spot on, other parts are inaccurate. 5 out of 10.

Is renting really broken?

Reviewing this leads me to the final question. Is renting really broken? Some of the current legislation is probably now out of date and needs reviewing, but overall the Residential Tenancies Act just needs some fine-tuning.

The main issues are around supply and demand of rental properties, poor quality of much of the rental stock and issues around the lack of regulation around Property Managers. If and when the industry is regulated you will see long-lasting improvement in the quality of service and qualified, regulated Property Managers will not be allowed to manage non-compliant properties. The other recommendation we have is that private landlords need to sit an exam to allow them to privately manage their own investment properties. Many of them muddle their way through the process, making mistakes and leaving them exposed to litigation.

At least the Government is trying to do something about increasing stock and the Healthy Homes Guarantee Bill will go a long way to improving the quality of rental properties, but this is going to take time.

Overall, Renters United have successfully put the spotlight on renting in New Zealand, though this whole document would have far more credibility if it had input from groups such as REINZ or NZPIA. It would be far better if we all listened to each other's concerns and adopted a collective response.


cartoon-wrecking-ball

Tenancy tribunal wrecking ball decision smashes unsuspecting landlords

On the 27th April 2017 at the Tenancy Tribunal in Dunedin, adjudicator Wilson made a ruling on a case that has sent alarm bells ringing and many think the ruling was grossly unfair.

The former tenant Natalie Parry lodged a claim for a refund of rent after she found out that the property she was renting was not fully compliant. The landlord, Vic Inglis was oblivious that there was anything wrong. The property in question was personal and precious to the landlord. It had been the family home for 10 years. The property was in very good condition and the adjudicator acknowledges that the landlord made no attempt to avert Council laws or to exploit the tenants.

The problem arose when the tenant became aware that the downstairs part of the premises did not have a permit for the work undertaken to convert the space into living quarters.

Vic Inglis probably hasn't been feeling great about being a landlord after a very tough decision went against him. (Photo courtesy of Otago Daily Times)

What made the matter worse for the landlord was that the tenant only became aware of the issue when she sublet the downstairs part of the property without consent from the landlord. Mr Inglis was completely unaware that the downstairs did not have council consent as he had not got a LIM report (Land Information Memorandum) when he purchased the property over a decade ago. This was the only mistake he made but what a costly mistake to make.

In a case that seems grossly unfair, a landlord had rented a property that was in a perfectly good condition to a tenant who had breached her agreement yet not only did she get nearly $11,000 in refunded rent, she pocketed over $3,000 from subletting the property without the consent of the landlord.
Is Tenancy Tribunal Like Playing Russian Roulette?

At Real iQ, we have examined this decision closely and have obtained the case notes. We are aware that Mr Inglis has appealed to the District Court so the decision may yet be overturned. However, we feel it is important to understand how the adjudicator came to this incredible decision and we also again provide evidence that going to Tenancy Tribunal can be like playing Russian Roulette.
Let’s analyse Adjudicator Wilson’s decision.

1. Was the Tenancy Illegal?

This is what Wilson believes. Yes, the downstairs did not have a permit but does that make the entire property illegal?
The section adjudicator Wilson refers to in the Residential Tenancies Act is section 137; Prohibited Transactions. This eludes to the fact that you cannot enter into a contract that contravenes the provisions of the Residential Tenancies Act and that any money paid under the contract is recoverable to the tenant.

2. But was there anything actually wrong with the property?

The answer to that is no. After finding out that the downstairs did not have consent Mr Inglis approached the council and was able to obtain a Certificate of Acceptance which then made the property fully compliant. No additional work was done.

Yet Wilson states that the Code of Acceptance does not retrospectively make the tenancy lawful because the consent was not issued until two months after the tenancy ended. Therefore, in the eyes of Wilson, this was an illegal tenancy.

3. The Landlord’s Cross-Application Is Out of Here!

Mr Inglis made a cross-application against the tenant due to damage to chattels and for the removal of smoke alarms which has maximum exemplary damages of $3,000.
This was thrown out as the decision that the tenancy was unlawful meant that Tribunal had no jurisdiction to consider any of the landlord’s claims. Basically, the tenant could have been operating a Meth Lab and the landlord had no power to do anything about it.

4. Grounds for a Rehearing? No chance!

Unsurprisingly, the decision did not sit well with Mr Inglis who immediately applied for a rehearing. However, there were no grounds for this. Section 105 of the Residential Tenancies Act refers to Rehearings.

You can only seek a rehearing on the ground that a substantial wrong or miscarriage of justice has or may have occurred. In the opinion of the adjudicator, this has not happened on this occasion. This is a matter for a District Court if the landlord chooses to appeal.

5. Different Adjudicator, Different Ruling

Meanwhile, in Christchurch, a landlord appeared to get off lightly in comparison with Mr Inglis.
The case between Danielle Williamson v Green Gift Health and Wealth Ltd highlights the inconsistencies that plague Tribunal.
On the 31st July 2017, Adjudicator Armstrong chose not to refund rent even though the property that was tenanted had a second bathroom without consent and a wood burner not compliant with the Building Code.

In this case, Ms Williamson took Green Gift Health and Wealth Ltd to Tenancy Tribunal seeking compensation due to the poor condition of the property they had rented and the fact that parts of the property were non-compliant. Adjudicator Armstrong ruled in favour of the tenant yet did not refund any rent.
This makes the Inglis decision seem very unfair as in the Christchurch case, the landlord clearly breached and would have been aware of the poor condition of the property. The property was not only non-compliant but also a health risk to the tenants yet the tenant was ordered to pay rent arrears to the landlord.

Be Consistent and Be Fair

The greatest frustration we hear about from Property Managers is how inconsistent Tribunal can be. In defence to many adjudicators, we have no doubt that many Property Managers attend unprepared and have limited knowledge of the act.

However, our research does show that too often we get inconsistencies. One of our aims is to hold Tribunal accountable to their decision and to educate Property Managers so they are better prepared when attending Tribunal.

The question this case highlights though is how many illegal tenancies are there, and does this give the green flag for tenants to seek thousands of dollars in rent refunds as many rental properties could have similar issues?

Our advice to Property Managers is to ensure that the landlord is fully aware of the obligations to provide the property compliant with all legislation and if you suspect that a property may not be compliant, raise the question with your landlord and highlight this Tribunal case.

As ever, Real-iQ are here to help and if you have any questions, do not hesitate to contact us.


meth-testing-patch-on-wall

New meth standards will solve nothing until practice notes issued

  • Opinion split on the risk from meth contamination
  • BRANZ report states 1600 kiwis die every winter due to poor condition of housing
  • Methsolutions defy REINZ stance on property managers doing testing

Late last month the eagerly anticipated new standards around Methamphetamine contamination were released. This has come after a lengthy process which also involved a large amount of public submissions. Clearly, there is plenty of emotion involved around this hugely controversial topic. This was evident during the recent REINZ Seminar involving members of the panel that helped introduce the new standards. Included on the panel where Lisa Gerrard (REINZ), Darryl Thompson (Auckland Council), Miles Stratford (MethSolutions) and lawyer Richard Hern.

The seminar was held in conjunction with the release of the new standards and many left the seminar with more questions than answers as opinion appears to be split on what is deemed a safe and acceptable level of contamination for a property to be lived in.

Although no one doubts the issues around Meth in society, there is large debate around how much of a risk low levels of contamination are to the public and also to residents who live in such houses. The new NZS 8510 standards that have been set are as follows.

  • Contamination cannot exceed 1.5 micrograms per 100cm2 for high level areas (living areas, garages)
  • Contamination cannot exceed 3.8 micrograms per 100cm2 for low level areas (under a property or in the attic)
  • Qualifications will be available for Meth testers however, this is still some time away

With insurance giant IAG setting a precedent with its stance around Meth, it seems unlikely that the new NZS 8510 Standards will impact its stance on refusing to pay out on claims where it cannot be established when the contamination took place.

Should property managers do meth testing? Vote now

Property Managers doing Meth Testing? No problem according to Miles

Probably the most controversial moment of the REINZ seminar was Miles Stratford’s stance that Property Managers did not have a conflict of interest if they carried out testing - even though Lisa Gerrard and Richard Hern advised the room of Property Managers not to engage in Meth testing and leave it to an independent company.

We questioned Mr Stratford about his relationship with Bolitho Property Management in Nelson who are certified Meth Testers trained by MethSolutions. We asked Mr Stratford whether he disagreed with the stance of REINZ and of lawyer Richard Hern. After pressing him he finally said yes he disagreed with REINZ.

Lisa Gerrard of REINZ advised members at a recent seminar to stay well clear of testing. Only one person disagreed on the panel.

How big is the risk?

The need for Head Adjudicator Melissa Poole to release Practice Notes is now becoming critical as going to Tenancy Tribunal is almost like playing Russian Roulette as different adjudicators have differing opinions, highlighted in some of the rulings that we have researched. We sympathise with the role the adjudicators face as they are clearly as confused as we are as to how big the risk is. The main bone of contention is whether a property with a ruling of under 1.5 micrograms per 100cm2 is reasonably clean. Opinion is split.

1st June 2017, J Tunnicliffe awards cleaning and testing against the tenant despite readings of only 0.89 micrograms per 100cm2. This is due to the property not being left in a reasonable clean condition at the end of a tenancy.

30th November 2016, A Macpherson throws out a claim by tenants for full compensation of rent after a third full diagnostic report found that after 12 samples were taken none exceed 1.5 micrograms and only one exceeds 0.5 micrograms. This is the first major case to refer to the new “Review of Remediation Standards” which was carried out in October last year.

  • 13th June 2016, W Lang awards $35,764.72 to the landlord after detailed results show the property is contaminated with the highest reading being 2.6 in the hall.
  • 18th August 2016, D Malcolm states that LJ Hooker are jointly liable for $6,788.44 only because they stated that they were the landlord on the tenancy agreement
  • 11th April 2017, J Setefano states that Barfoot and Thompson are liable for $15,020.44 which contradicts the previous order by D Malcolm.
  • 19th April 2017, D Cullen dismisses a claim for Meth cleaning and decontamination. This was after Debra Young from Methsolutions gives evidence to suggest that undetected levels of methamphetamine can bleed through a surface over time and decontamination cleaning can elevate levels of methamphetamine detected in a home.

The only real way we will get certainty on how to proceed is for Ms. Poole to come out with Practice Notes around how Tribunal should rule on different levels of Meth contamination.

Real-iQ are advising clients that according to the ruling by A Macpherson in the case between Forkett and Lodge City Rentals, anything under 1.5 micrograms is an acceptable standard and there is no reason why a tenancy should not commence.

Are Testing company adverts misleading?

One issue we do have here at Real-iQ is the advertising and press releases around how many properties tested are contaminated. You will see companies portraying the problem that 40% of properties tested are contaminated. However, results will pick up levels as little as 0.02 micrograms per 100cm 2. In a recent webinar, Miles Stratford states that of the 40% which come back positive, 30% would be over the 1.5 micrograms reading from baseline tests. This means that only 12% would be over the new standards and this is for baseline testing. The reality is that if you did the detailed discrete testing the results would be even lower, probably under 5%.

That is a big difference from 40%.

Miles Stratford gives his opinion on this webinar around the new standards. Click the video to watch

1600 Kiwis die each year through cold housing according to BRANZ

Unfortunately, as winter grips, the real problem around New Zealand housing is overlooked as Meth continues to dominate the news. A recent article in the Listener magazine referred to a BRANZ report highlighting that as many as 1600 Kiwis die each winter due to the poor condition of the properties they live in. Unsurprisingly, tenants are most at risk. In our opinion, this is real problem that needs to be addressed around rental properties in New Zealand.

1600 people dying unnecessarily is a national disgrace yet we aren't aware of anybody dying from living in a property with low levels of Meth contamination.

Testing companies will push Tribunal and local councils to have as lower levels of acceptable readings as possible, arguing that a property is not clean if it has traces of Meth. They will be the main benefactor from lower Meth readings.

Insurance companies will also be diving for cover forcing landlords and prospective purchasers to spend money on testing whilst we all wait for Tribunal to give us some guidance as to how to tackle this problem.

At Real-iQ, we are advising clients to recommend that testing is done inbetween tenancies but this is ultimately the landlords decision. The only reason we are doing this is to protect our clients from litigation.

We are hopeful that Practice Notes will be released soon and we do not have to wait too long for qualifications to be established for the Meth Testing industry.

Meanwhile as winter truly bites, thousands of Kiwi's battle sickness and ill health caused by the cold and damp properties, many of them are tenants and struggle to make ends meet. Surely we have our priorities wrong and this should be our focus.