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2016: The Year the Landlord Got Screwed

As this turbulent year ends, we will look at some of the key events that have changed our industry and two issues stick out like a sore thumb, much to the detriment of the landlord. Methamphetamine and the Osaki Tribunal Case.

First, let’s tackle Meth. We know that living in a damp and mouldy property is bad for your health, this isn’t disputed. So why has the obsession with Meth exploded in 2016 yet thousands of tenants across New Zealand still live in a mould infested dumps?

If the same amount of publicity and money was spent on eradicating mould from rental properties rather than methamphetamine, I for one believe the tenants of New Zealand would be in a far healthier place.

Headlines like this in newspapers grab attention but add little in substance other than selling newspapers and scaremongering the public. How many of these were labs and what percentage was above 1.5 micrograms per 100 cm2?

Headlines like this in newspapers grab attention but add little in substance other than selling newspapers and scaremongering the public. How many of these were labs and what percentage was above 1.5 micrograms per 100 cm2?

Unfortunately, mould doesn’t have the same headline grabbing attention as Meth. We don’t have individuals or companies’ scaremongering over the risk to the health of tenants over mouldy properties. There aren’t any dramatic news stories around mould. We only see news catching press releases claiming around 40% of properties tested are contaminated. What we don’t hear is how many of the 40% tested were actually ‘Meth labs’. Probably, at a guess, under 1%.

Has anybody died from exposure to Meth-contaminated properties? I’ve yet to hear of any cases.

Emma-Lita Bourne. Her death was attributed partly to the condition of the rental property she lived in.

Emma-Lita Bourne. Her death was attributed partly to the condition of the rental property she lived in.

When toddler Emma-Lita Bourne died of a brain hemorrhage in 2014, the coroner’s report indicated that the cold and damp conditions of the HNZ property that the family was renting contributed to pneumonia that Emma-Lita suffered which in turn, lead to her death. However, there was no mass public outcry over this.

Nobody at Real iQ is denying that there is a problem in New Zealand with Meth, clearly, there is. But we must look at all the facts surrounding this issue. I for one, am far from convinced that there are serious health issues from living in a property that has a low Meth reading where it has not been manufactured.

What we are saying is that there has been an enormous financial and emotional burden placed upon landlords, vendors, and property managers with no solid evidence to suggest that a property with a low reading of Meth is dangerous to live in. The only people who are profiting are the people who do the testing and cleaning. In fact, the stress involved in dealing with this is probably worse for your health than living in the property.

We have spoken with plenty of individuals over the last 12 months, many of whom work in the industry and they are equally condemning of the many cowboys who hold themselves out as professionals and acting in the interest of tenants. The individuals we have also spoken to have claimed that they know of companies that do testing and then refer the ongoing clean-up work to companies that they have a direct or indirect interest in. This is a clear conflict of interest and goes against the Ministry of Health Guidelines around Meth. Yet these companies are not investigated or held to account.  

In the Winter of 2016, we undertook the largest survey of the Property Management industry ever undertaken, by far the biggest concern of the industry was the impact on Meth and over 50% believe that Meth testing between tenancies should become compulsory. Approximately 30% said no and the remaining group were unsure.

2017 will see standards set in place and hopefully the brakes put on the ‘Gravy Train’ with safe levels of contamination set to rise considerably. However, one must feel for landlords and vendors who have probably wasted thousands of dollars on unnecessary testing and cleanups.

2016 will also be remembered for the shambles that unfolded from the Osaki case which saw tenants free from accountability for the damage they have caused unless it was intentional. Throughout the year, we have highlighted key cases and have demonstrated that Tenancy Tribunal appears to be anything but consistent with everyone struggling to deal with this. Property Managers have had to deal with frustrated landlords with many now citing this and fears around Meth as for reasons for selling up and getting out. The risks begin to outweigh the benefits and with a buoyant property market, it is time to get out.

Things got so bad that Head Adjudicator Melissa Poole wrote to then Housing Minister Nick Smith asking for intervention. However, who knows where this will go now that Nick Smith has been demoted. Since Bill English became Prime Minister we have seen big changes in the Housing portfolio so any changes to legislation may go on the back burner.

Both Osaki and Meth are symptoms of a risk-averse society. With each event, we see opportunists come out of the gutter to reach their tentacles sucking money, goodwill, and emotion out of unsuspecting landlords who in our opinion, have been well and truly screwed in 2016.

It hasn’t all been bad.

The Health and Safety at Work Act and changes to the Residential Tenancies Act around smoke alarms and insulation has meant that the industry has had to raise its standards. Many companies are now realizing that managing substandard properties for slumlords is just not worth the risk. The quality of rental properties is gradually improving and will continue to improve as more and more landlords get their properties insulated.

We will see further improvements in rental properties if the Labour backed Healthy Homes Guarantee Bill gets passed and becomes law but the flip side of this for tenants is that rents will continue to increase.