Sunday, April 13, 2014
Mike Butler: WOF means hardship for tenantsLabels: Mike Butler, mould, Property investment, rent, rental property warrant of fitness
Tenants should be very alarmed at rent increases and more stringent standards that would come with a proposed warrant-of-fitness scheme. Early indications from two trials are under way show that more properties fail than pass the test that requires ceiling insulation 120mm thick, under-floor insulation, and a supplied heater.
Upgrades averaging $9700 per rental property, as estimated by the Building Research Association of New Zealand after a survey of 491 properties throughout New Zealand, would increase rents by around $20 a week thus disadvantaging the people a WOF scheme purports to help. (1)
The $20 extra is derived from an expected return of 10 percent per year from $9700 in remedial work that could be required to make a property comply with warrant-of-fitness standards.
While $20 per week may not appear much, fuel poverty shroud wavers would really kick up a fuss if a $20-a-week increase in the price of electricity was on the cards.
A further negative unintended consequence for tenants is the checklist requirement for a dwelling to be reasonable free of visible mould, with the total area of mould being not more than an A4 sheet of paper.
Tenants are required to maintain their premises in a clean and tidy state while living there, according to the Residential Tenancies Act. Once tenants move in, it’s their responsibility to keep your place in that condition.
If mould appears during a tenancy because tenants fail to ventilate and wipe away condensation, and if a warrant of fitness check finds more mould than an A4 sheet of paper, it would appear a WOF regime would shift responsibility for mould on to the property owner.
Once property owners become responsible for tenant-caused mould, a prudent property owner would be sure that neither mould, not a mould-causing tenant, would occupy any building that would be subject to a WOF test.
This would mean that any tenant who appeared unable to live in a property without allowing a build-up of dampness, condensation, and mould, would be moved on before a WOF inspection and would find increasing difficulty to find accommodation.
One tenant who liked the run-down house he lived in because it was cheap expressed concern to his landlord when he heard of the WOF proposal.
The landlord wanted to upgrade the kitchen and bathroom but the tenant said that he would prefer to continue paying a lower rent. An upgrade to WOF standard would mean an extra $70 rent for him to pay, which would mean he would have to move to shared accommodation rather than living on his own.
A property rental warrant of fitness scheme purports to solve problems associated with twin claims that “New Zealand’s housing stock lacks insulation”, and “many poverty stricken families are forced to crowd into substandard houses where disease and illness rapidly spread”.
Unintended consequences for tenants are higher rents and increased difficulty for some to find accommodation.
1. Branz 2010 House Condition Survey Report, http://www.branz.co.nz/cms_show_download.php?id=53af2b0c2e5ca5169a0176996bba7ee88de082c0
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