Landlords warned to be wary of pricey assessments

We’ve fielded complaints from landlords questioning what they’re getting for their money.

Assessment charges

For any new or renewed tenancies from July, landlords must ensure properties meet the healthy homes standards.

Companies offering to check your property complies with the new rules typically charge hundreds of dollars for their services. However, the cost of the assessment may not be the only thing you pay.

In May, Auckland resident Rex Gilfillan paid one company, Warm Fuzzies, $345 to assess a rental property.

Included in the report the company provided were several quotes from contractors for work required to bring the property up to standard. But after reading the fine print, Gilfillan was surprised to learn the prices also included a commission fee for Warm Fuzzies.

Warm Fuzzies managing director Jonathan Duncan said it takes “10 to 20 percent [commission] for each job”.

Duncan said he would consider making changes to the website to make this commission clear.

Another Warm Fuzzies customer had $182 added to his bill on top of the $414 quoted to install a moisture barrier in a Dunedin property.

A quote is an exact price for a job and it’s binding on both parties once accepted. If extra work is required, the company should check you’re happy to pay for it to be done. When the customer questioned the bill, he was told the fee was for an additional area that hadn’t been included in the original calculation. Warm Fuzzies agreed to waive the charge.

Fine print disclaimers

As well as extra fees, keep an eye out for broad disclaimers about the service being provided.

Last year, Matamata property owner Alison paid $200 for an assessment from Waikato Healthy Homes. Her property management company advised doing so would take away liability and was “well worth the fee”.

Waikato Healthy Homes advertises as a “specialised service” with “expertise” in healthy homes regulations. However, the report provided to Alison stated it was the landlord’s "responsibility to highlight” any errors and that the report shouldn’t be relied on for confirmation there were no drainage issues at the property.

After we contacted the company, director Gail Hellyer removed the statement.

Our advice

There’s no regulation of companies that carry out healthy homes inspections. That means anyone can set up shop and offer an assessment service. It also means it’s up to you as a landlord to do your homework.

Information provided by an assessment company may be little more than you can get for free from Tenancy Services.

If you decide to use an assessment service:

• Get at least three quotes from different companies to compare prices. Ask for quotes in writing and a sample report.
• Read the terms and conditions, and check whether the company charges a commission, and whether there are any other fees.
• Check out the company that’s top of your list. How long has it been around? Is it a registered company? (You can find out at companiesoffice.govt.nz)

You may also wish to be present during the assessment.

We recommend asking the assessor whether they have completed any training. For example, the Energy Efficiency and Conservation Authority (EECA) and the Building Research Association of New Zealand (BRANZ) have funded development of an online training programme aimed at improving the quality of home performance advice. The programme is run by Home Performance Advisor (HPA).

Meeting the mark

It’s been a long time coming but standards finally kicked in on 1 July to improve the quality of rental housing. From this date, private landlords must ensure their rentals comply with the healthy home standards within 90 days of any new, or renewed, tenancy.

These standards require that:

• The property must have one or more fixed heaters that can warm the main living area to 18˚C.
• The minimum level of ceiling and underfloor insulation must meet the 2016 insulation standards or be in reasonable condition and meets the minimum R-value when it was installed.
• Kitchens and bathrooms must have extraction fans.
• The property must have efficient drainage for the removal of storm water, surface water and ground water.
• If the home has an enclosed subfloor space, a ground moisture barrier must be installed.
• Draughts making a home harder to heat have to be blocked.

From 1 July 2024, all rental homes must comply with the standards.

Landlords that fail to meet their obligations face a financial penalty up to $7200. In addition, owners of six or more tenancies that do not comply may face penalties up to $50,000.

If you’re a tenant

For new or renewed tenancies from 1 December 2020, your landlord must provide a statement of compliance with your rental agreement. This statement clarifies whether the property complies with the standards, and if not, what changes the landlord will make to bring it up to scratch.

Landlords that fail to provide this face a penalty of up to $750.

If you believe your home may not meet the standards:

• Use the tools on the Tenancy Services website to check whether it complies.
• Talk to your landlord about fixing any shortfalls.
• If the alterations needed haven’t been made within the required time frame, contact Tenancy Services.