What’s Most Likely to Cause My Property To Fail the Healthy Homes Standards?

Last Updated: 06/03/21

Introduction

What’s Most Likely to Cause My Property To Fail the Healthy Homes Standards?

80.95% of rentals at one property management firm failed the Healthy Homes Standards.

Even if your property is newly built and appears to meet the building code, it may still not meet these regulations.

That’s a problem. If you don’t bring your investment up to code, you could face a fine of up to $4,000.

This article shares data on the main reasons properties tend to fail the Healthy Homes Standards, along with what you need to do to put it right.

Will My Property Fail?

80.95% of these properties at this property management firm failed the Healthy Homes Standards. Here are the reasons why

Venture Management, our sister company at Opes Partners, manages rental properties around the country.

As part of complying with the new legislation, each property needed to go through a Healthy Homes assessment.

We’ve crunched the numbers on those assessments to understand why properties tend to fail the new standards.

In total, 80.95% of the properties that had a professional assessment failed at least one of the 5 minimum requirements.

That probably makes you think, "Surely these properties can't be of very high quality!"

In actual fact the rental properties Venture looks after tend to be relatively new and have been built within the last 10 years.

So, even if your rental property is new and appears healthy, it may not meet these stringent standards.

Of the 294 properties tested at Venture Management, the most common fault was draughts. This is where a noticeable stream of cold air makes its way into the property.

117 (39.80%) properties failed in this area.

The next most common fault was insulation, followed by heating.

This table summarises the most common reasons a property failed the standards:

The 5 Standards

What are the 5 Healthy Homes Standards, and what do they mean?

The NZ government unveiled the plan for these standards in February 2019, intending to make rental properties healthier for tenants.

There are 5 key parts to the new rules:

  • Draught stopping
  • Insulation
  • Heating
  • Ventilation
  • Moisture and drainage

Each of the standards is technical. For example, the Tenancy Services guide to the ventilation standard is 12 pages long.

Here is an overview of each standard, based on the technical rules and why rentals tend to fail in practice, based on actual Healthy Homes assessments.

Draught Stopping

Draught Stopping

Tenancy Services states that landlords must stop any gaps or holes that cause noticeable draughts. This includes blocking unused open fireplaces and chimneys.

Properties tend to fail this standard because there are small gaps underneath doors, which create a draught.

Within the Venture Management analysis, this was often underneath doors that connect an internal access garage with a hallway.

The solution is to install a draught stopper underneath the door. This may cost around $100 for a handyman to buy and install.

For those more inclined to DIY, the materials for a draught stopper can be picked up for less than $40 from Mitre10 and Trade Me.

The draught standard isn't just confined to the bottoms of doors. One listener of the Property Academy Podcast texted in to let us know that one of her properties failed because there was a draught in the kitchen caused by a cat door.

Healthy Homes Standards NZ example

If this property investor had not undertaken a professional Healthy Homes Standard assessment, she might never have picked this up.

And if her tenant had complained to the Tenancy Tribunal once the standards were live, she might have had to pay up to $4,000 in fines.

Insulation

Insulation

Ceiling and underfloor insulation have been compulsory in all rental homes since July 1 2019.

The Healthy Homes Standards take this further, setting a minimum R-value for insulation. This is a measure of how well the insulation resists heat flow.

Underfloor insulation across the country needs an R-value of at least 1.3, and ceiling insulation must be at least 120mm thick.

However, the R-value of ceiling insulation depends on where the rental property is in the country.

In Auckland and Northland, where temperatures are warmer, the minimum R-value for ceiling insulation is 2.9. For the whole South Island and the Central North Island, the minimum is 3.3. And for the rest of the North Island, the minimum is 2.9.

Healthy Homes Standards Insulation Requirement

You can figure out the R-value of insulation by checking its packaging, although if your insulation was installed a long time ago, there might be a product label stapled to a beam in the attic.

Typically a property might fail this standard because insulation may settle over time, decreasing in thickness and becoming less effective. It may have also been moved accidentally and no longer be in the right place.

That's where you may need to top up the insulation, adding extra material on top of what’s already there.

Heating

Heating

One of the most stringent parts of this legislation is heating.

Landlords must have enough fixed heaters installed so that a whole living room can be heated to 18 degrees, even on the coldest day of the year.

That means properties in Invercargill, where temperatures are cooler, will require more heating than those in Northland, where temperatures are warmer.

Investors can use an online assessment tool to calculate the minimum kW’s (kilowatt) needed within the heating appliance to meet this standard.

For instance, running the tool on a 30m2 room in Christchurch City with single glazing resulted in the need for a 6.2 kW heat pump.

That’s based on the coldest temperature in Christchurch being -4 degrees and the heat pump needing to raise the whole room’s temperature by 22 degrees.

Before you calculate the online assessment, you'll need to measure your lounge walls and windows first, plus note whether your windows are single or double glazed.

Your room's shape will also impact how much heating you need. If you have an open staircase that can't be walled off, the entire hallway and staircase will be considered part of the heating assessment.

Ventilation

Ventilation

All rooms need to have a door or window that can open to the outside and be fixed in an open position. Also, the openable windows and doors' total area must be at least 5% of each room's floor area.

Extractor fans also make up part of this standard, with kitchens and bathrooms both needing one that ventilates externally.

If you bought an extractor fan for your bathroom or kitchen after July 1 2019, there are minimum size and power requirements. But, if it was purchased before that, there are no minimums required.

Properties usually fail the ventilation standard because a window isn't opening correctly or the ducting on the extractor fan has a tear or kink or has been squashed.

Linda Forsyth, business manager at Venture Management, recalls:

"One of the properties we look after failed the standards on ventilation. It turns out an electrician had been in the roof a few months prior and accidentally stood on the ducting while walking out. So it didn't meet the standard, and that section had to be replaced."

There are many reasons why a property can fail any of these standards, so it is best to get a Healthy Homes assessment from a specialist company.

Moisture and Drainage

Moisture and Drainage

The final standard requires that your rental property has enough drainage to remove water from your roof or garden and direct it to a drain.

It's got to be robust enough to prevent the house and land flooding after normal rain.

There are two ways homes usually fail to meet the drainage standard:

  • There may be leaves or debris clogging a drain or spouting, or
  • There may be cracks or missing pieces in the drainage, which means some water spills over the spouting

Even if you clear the leaves or debris blocking a drain, you still need to maintain it. That’s because the landlord is legally responsible for clearing gutters, downpipes and drains on an ongoing basis. This includes cleaning out leaves and debris as needed.

This is generally a simple and easy fix as long as the gutters are in a good state of repair.

Implementation Dates

When do the Healthy Homes Standards come into effect?

If you sign a new tenancy agreement from July 1 2021, your property needs to be compliant within 90 days of the tenancy starting.

All boarding houses also need to be fully compliant from July 1.

Any other rental properties that don’t have a new tenancy agreement won’t have to comply until July 1 2024.

But, if a new tenancy agreement is signed, even if it is with the same tenant, the property will need to be brought up to standard within 90 days from the new tenancy start date.

Consequences For Non-Compliance

What happens if my property doesn’t meet the Healthy Home Standards?

If your tenant doesn’t believe their rental meets the Healthy Homes Standards, they can apply for a hearing with the Tenancy Tribunal.

The tribunal can:

  • Order you to undertake the necessary work to bring the property up to the Healthy Homes Standards, and
  • Fine you up to $4,000, which is then paid to the tenant in most cases.

Because the money from any fines is paid to the tenant, we here at Opes Partners expect tenants to actively pursue claims at the tribunal.

That means property investors and managers will need to keep diligent records to ensure their properties are up to code.

Next Steps

What Should I do Next?

These standards are technical.

You might think that your property is healthy, but that doesn’t make it compliant.

That’s why landlords should invest in a professional Healthy Homes assessment, so they know what needs doing at their properties.

This typically costs between $150 – $300, plus the cost to remedy any part of the property that doesn’t meet the standards.

While you’re doing this, you’ll also want your property manager to collate the paperwork to provide to your tenant, which will soon be required by law.