According to Sustainability Trust, 60% of heat loss can be caused by inadequate ceiling and underfloor insulation. This can contribute to moisture issues such as dampness and mould which is undesirable for tenants and can be an expensive maintenance cost to Landlords.
The Residential Tenancies Act (RTA) now requires rental properties to meet certain standards of insulation to create warm, healthy rental homes for tenants.
Insulation Statements Since July 2016, the location, type and condition of insulation must be stated on the tenancy agreement. Landlords failing to comply could face a $500 fine.
Ceiling / Underfloor Insulation As of mid-July 2019, it will be compulsory for all rental properties that can take ceiling / underfloor insulation to have it installed. Landlords that do not comply could face fines of up to $4,000.
The government is offering 20,000 insulation grants to landlords over the next 18 months and subsides are being offered through Energy Efficiency and Conversation Authority ECCA.
300,000 Rental’s Nationwide Requiring Insulation We urge owners with properties requiring insulation to look into this sooner rather than later. There are approximately 300,000 rental properties nationwide requiring insulation and the industry can only cope with 70,000 to 80,000 insulation retrofits a year.
Assessment Report If your property does contain ceiling / underfloor insulation, we recommend getting an assessment report done to determine whether the existing insulation in your property meets the RTA standard. If a spot check is conducted on your rental property and the insulation is not up to standard, you could be fined.
Insulation Companies Will Be Flat Out It is predicted that insulation companies will be flat out at the beginning of 2019 and many landlords will leave insulation retrofits to the done at the last minute. When these changes are enforced mid-July 2019, and owners have failed to comply to meet the new insulation standards, MBIE will have no empathy when it comes to fining landlords since they were given a 3 year notice period to insulate their property.
Advantage for Landlords and Tenants The recent changes made to the RTA in regards to insulation and other regulations aimed at making the quality of rental homes better for tenants is also beneficial for landlords in terms of rent return. In this type of market insulated, well-maintained properties in desirable locations are receiving great rent return.
Landlords should take advantage of the grants and subsidies offered by the government and aim to get their properties insulated well before mid-July 2019 to avoid facing fines and potentially receive a higher rent return when they come to re-tenanting their rental and reassessing their financial situation.
