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Talk of Compulsory Heating in Rental Properties Worries Landlords

By Donna Jones

The government has said it will begin moving towards new rules requiring fixed form heating being installed in nearly half a million New Zealand rental homes. The news has landlords fearing legislation that will see them forced to fit their rental properties with heat pumps, which critics say will lead to rent increases.

Request for feedback on compulsory heating pending
Housing Minister Phil Twyford says the Ministry of Business, Innovation and Employment (MBIE) will shortly call for public feedback on the topic of compulsory fixed heating in rental properties.

“Subject to ministerial and Cabinet decisions, the ministry expects to consult on the regulations that will set the proposed standards and the timeframes for landlords’ compliance later this year,” says Twyford.

The main point of difference from what is currently expected of landlords would be that the heating source would need to be fixed, ie: a heat pump or wood burner, rather than a portable electric heater.

Twyford explained that it’s not guaranteed that the form of fixed heating would be heat pumps. Rather, a pending discussion with his experts would serve up recommendations on the best option. A spokesperson for the Minister reiterated that the method of fixed heating would need to meet specific criteria and would likely be the form of heating best suited to each house.

Compulsory heating in rental properties could complement Healthy Homes Guarantee Act
The consultation around compulsory heating is part of the greater conversation around creating healthier rental property stock in NZ — at the centre of which is the Healthy Homes Guarantee Act which takes effect July 1, 2019. Speaking to the Weekend Herald, Twyford said the new act, passed in December 2017, will create new standards that landlords must meet. One of these is in relation to heating tenanted properties, and the consultation is set to explore making fixed form heating compulsory for all rental properties. Other standards in the Act pertain to ventilation, insulation, moisture control, drainage and draught stopping.

What it could potentially mean for landlords
While it’s still at the consultation stage and is receiving heavy objection from critics, passing of the legislation could be a game changer for many Kiwi landlords. Consumer NZ says that heat pumps are considered the best heating form due to their reduced running costs and improved efficiency when compared to movable heaters. This would make it seem likely that if fixed heating legislation passed, that heat pumps would be the required form of heating for the most part. At an average of around $3,000 including installation (source: Consumer NZ), the cost of fitting their rental property with a heat pump unit may be financially crippling for some landlords, especially the grandmother Doris type of property investor.

Objections from National and NZ Property Investors Federation
The National Party’s Housing spokesperson, Judith Collins questioned whether Housing New Zealand would have the budget required to put fixed heating in its 63,000 properties. She speculated that the cost will need to be absorbed somewhere and that Government may have to raise the accommodation supplement payment given to low-income tenants receiving state support.

Andrew King, executive officer for NZ Property Investors Federation (NZPIF) expressed his distaste for the move towards compulsory fixed heating, citing several problems he foresees the scheme having. “A lot of properties like apartments don’t suit heat pumps and the body corporate might not allow it, meaning an apartment couldn’t be rented out,” he said, adding that NZPIF didn’t want their members to be dictated or prescribed to. The federation has lamented that some tenants wouldn’t use the provided heating systems and would impair the heating of homes by keeping curtains closed during the day and drying clothes indoors.

Staying cool while we wait to hear about heating up
As it stands we await the Government’s planned release of a document for public feedback. We encourage all our clients to provide their tenants with the means to keep their rental property warm, dry and healthy. We support the discussion of compulsory fixed form heating, but we sincerely hope the Government will consider the impact it may have on all involved — from the landlords and heating industry to the tenants and the rental housing stock — and make a smart decision that leads to positive outcomes for everyone.

If you’d like to speak to us about how to approach keeping your rental property warm and dry, drop us a line.

Image: ‘Hot’ by Kailas Shastry under CC BY-NC 2.0

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