Written by Patrick Wynne - Law Clerk (Property)

By July 2019 all rental houses must have ceiling and under floor insulation compliant with the national standard. The time bomb is slowly counting down and Richard Arkinstall from the Insulation Association of New Zealand, stated a “survey of its members indicated tens of thousands of rentals would not be insulated on time."

A warning has been issued by Arkinstall stating simply that within the next 12 months the demand for insulation installation services is going to be too high for the supply.

If rental properties do not have sufficient insulation by 1 July 2019 the punishment for not meeting the deadline is a fine of $4000.00. Although the onus to complain and raise this issue is on the tenant, they will have every motivation to do so, as the $4000.00 fine is to be paid directly to them.

There are two important matters to consider now that we are within the one year timeline. Firstly, if a house is on the market and the insulation works have been completed, are the works up to the required standards?  Secondly, should real estate agents be advising purchasers if the insulation works have not been completed?

Taking a look at the first matter, the reason behind this due diligence is that the owner, as at 1 July 2019, will be the entity liable for the $4000.00 fine, regardless of who completed the insulation works.  As it is entirely legal for landlords to install the insulation themselves there may be very real risk that the insulation does not comply with the insulation standards as set out in this brochure.   Therefore, if a rental property is on the market and the current landlord has stated the insulation works have been completed there are two questions that we consider would be prudent to ask:

1. Were these works completed by the landlord or an insulation provider?
2. If they were completed by the landlord, is there proof that the insulation meets the required standards?

In the second situation, where the rental property has not been insulated it appears it is now a race against the clock for landlords to acquire the services required. Therefore, if you engage in property management services the mantra ‘the sooner the better’ is as applicable as it ever will be.  If you deal with clients who own a number of rental properties delivering this mantra to them will be just as beneficial.

As always, if you have any questions or concerns surrounding this, please do not hesitate to contact us.

 

Written by Lana McCarroll - Registered Legal Executive (Property)

Since the earthquakes assignments of earthquake claims have been quite the norm when properties are bought and sold.  Unfortunately it is becoming common, for whatever reason, that EQC claims have either not been assigned correctly or some claims have been missed off a Deed of Assignment.

The resulting issue is that when it comes time for us to assign the residual rights in earthquake claims to a new owner, we are having to back track and obtain assignments for the unassigned claims from the previous owner.

This additional work is not only time consuming and sometimes costly for the client, but can also delay settlement as previous owners can often be difficult to work with.  There is no benefit to them in signing a new Deed of Assignment so they don’t see the urgency.  Sometimes they have moved away from Christchurch, and in some cases out of New Zealand.

Because we don’t usually see an agreement until after it has been signed, we are unable to liaise with the solicitor on the other side and confirm that all of the EQC information has been correctly included.  Another difficulty is that sometimes the timeframes are tight leaving us under pressure to obtain information that is often difficult to get hold of.

We ask agents, when drafting agreements to either obtain a copy of the prior Deed of Assignment from the vendor, their solicitor or EQC.  Having this information will avoid having any unnecessary delays and the sale or purchase can progress as usual.

Your help with obtaining correct EQC information helps the transaction run as smoothly as possible and remember that we are only a phone call away.

 

It was today announed that the Government is proposing to make wide ranging changes to rental laws.  These changes include:

• Scrapping letting fees.
• A limit on rent increases to once per year (and potentially a requirement on landlords to include a formula for rent increases in tenancy agreements).
• An end to 'rental bidding'.
• Ending no-cause terminations (currently a landlord can evict a tenant with 90 days notice with no reaon, or 42 days with a given reason). 
• Setting some legitimate reasons for landlords to evict 'rogue tenants'.
• Making it easier for tenants to own pets.

The Government will consult on the proposals for 8 weeks, and any reforms are unlikely to become law before mid 2020.  We will keep you updated as more information becomes available.

We wanted to make a clarification to a previous article “Claiming compensation if issues are uncovered in the final inspection” which appeared in the July 2018 edition of our newsletter. In our article, we stated that “As the agent, you will be called upon to help facilitate the purchaser completing their final inspection in a timely fashion. Remember it is the purchaser’s right to inspect the property before settlement. If a purchaser wants to waive this right, then we recommend that to protect yourself you should get clear instructions to this effect from them in writing, and suggest they speak to their lawyer first.”

It was pointed out to us that the agreement (at clause 3.2) requires the vendor (not the agent) to permit a purchaser to inspect a property if it is being sold with vacant possession. We agree that the purchaser’s right to a final inspection is in relation to the vendor only, even though an agent is often called upon to arrange a time for the final inspection on the vendor’s behalf.  We did not mean to suggest that an agent will have failed in their duty if they do not proactively encourage a purchaser to complete a final inspection. We were merely concerned that a disgruntled purchaser may, after the fact, look to cast the blame around, including towards you as the agent. Our point was that we recommend that you continue to keep clear diary notes of all of your interactions with the parties.

We always welcome your feedback and would love to continue to hear from you with any suggestions as to how we can make our newsletters even more helpful for you. If you have any suggestions for future articles, please do not hesitate to contact any of our article’s authors or courtney.mchugh@cavell.co.nz

Partner - Property

Phone: +64 3 339 5645

Mobile: +64 21 226 2630

Email: mike.parker@cavell.co.nz

Legal Executive - Property

Phone: +64 3 335 3469

Email: lana.mccarroll@cavell.co.nz

Law Clerk - Property

Phone: +64 3 335 3459

Email: patrick.wynne@cavell.co.nz

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