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Requirements to consider when purchasing an investment property
The Residential Tenancies Act 1986 requires landlords to provide and maintain rental properties in a reasonable state of repair and cleanliness. Recent amendments to the Act aimed at improving the standard of living have meant increased pressure on landlords to understand their responsibilities and bring properties up to acceptable standards.
In practice, this means landlords need to be broadly aware of health-related and safety-related requirements in the following laws:
- Building Act 2004 and the Building Code
- Health Act 1956
- Housing Improvement Regulations and bylaws made under the Local Government Act 2002. These are set by individual councils.
If you are considering purchasing a rental property, the vast requirements can be overwhelming, so we’ve compiled a list of the key requirements to consider:
- Heating - From the 1st of July 2016 all rental properties are required to have a form of heating installed in any living area within the home regardless of whether the property is insulated. For approved forms of heating you should contact your local council, but the Tenancy Tribunal may consider this requirement met where the landlord has provided an inexpensive plug in heater (or similar) if the local council does not have a list of approved forms of heating under these regulations.
- Room size, function, and safety – the Housing Improvements Regulations of 1947 sets out a minimum room criteria where a property must include; A room that can be used as a kitchen or kitchenette with a sink and tap connected to useable water, A bathroom with a shower or bath and running hot water, A toilet (inside or outside the property) for the exclusive use of those that live in the property, and provision for the washing of clothes. Additionally there a minimum room size requirements, which can be found here.
The regulations also stipulate the exterior must be weatherproof, and floors and walls must be lined with the floors being washable and durable. Staircases between levels must be safe and have a handrail installed.
- Insulation – Insulation statements are compulsory on all tenancy agreements signed since 1st July 2016. Landlords must disclose whether there is insulation in the home, the condition of it, where it is, and the type. From 1st of July 2019 all rental properties will be required to have ceiling and under-floor insulation fitted where reasonably practicable to install. It must comply with the regulations and be safety installed. A landlord who fails to comply with these requirements is committing an unlawful act and may be liable for a penalty of up to $4000.
- Smoke alarms - From the 1st of July 2016 all rental properties must have smoke alarms fitted within 3 meters of each bedroom door, and on each storey. Where new alarms are to be fitted, they must be photoelectric, have a battery life of at least eight years (or be hard-wired), installed according to manufacturer’s instructions, and meet international standards.
- Security – All houses are required to be reasonably secure. The landlord must provide and maintain locks or similar devices so that the property is reasonably secure and where an alarm system is installed and working at the beginning of a tenancy, then this must be maintained throughout the tenancy.
- Mould - All houses must be in a reasonable state of cleanliness before being rented out, this includes being free from mould and dampness. Dampness is often from external sources so it will pay to check that gutters are clear, and that the downpipes and drainage are working. Additionally, where the house has a suspended floor, check that the ground is dry and that there are no leaks.
These are all items our qualified inspectors will advise you on when you have a building report completed through NZ House Surveys.
For more information on landlord responsibilities visit the MBIE website at https://www.tenancy.govt.nz/starting-a-tenancy/new-to-tenancy/key-rights-and-responsibilities/