With skiers and winter travellers in the Queenstown region chasing the late season snow, things are only briefly slowing down as we move into summer season. The rapid rate of expansion over the past decade has far exceeded the resort’s housing capacity, and both demand and yields continue to rise. The bustling alpine metropolis remains an exciting investment opportunity for property investors, and the town boasts a high number of rentals, almost all of which are constantly tenanted to the max.

However, while pressing demand may make it challenging to find the time for upgrades, new law changes are requiring landlords around the country to commit to providing healthy, heated homes. These requirements differ slightly depending on which region of New Zealand a property stands in. Another key change with special significance to South Island landlords is the 2019 adjustment to EQCover from the Earthquake Commission (EQC). Here’s a brief breakdown of the changes for landlords in the Queenstown Lakes area.

Law changes for landlords

What: The New Zealand Government is making a commitment to improving the wellbeing of renters nationwide by introducing requisite standards for rental properties to be drier, warmer and healthier homes. New minimum standards are coming into effect for insulation, heating, ventilation, drainage, stopping draughts and reducing moisture.

Additionally, the EQC are removing cover for contents damaged in a natural disaster event (currently $20,000), increasing residential building cover to $150,000 (currently $100,000), and offering landlords a two year period post-disaster to make a claim (currently two months).

Why: New Zealand, as a developed nation, has a reputation for poor quality, outdated housing stock when compared to builds of similar ages from other western countries. WHO, the World Health Organisation, recommend a minimum indoor temperature of 18 degrees Celsius, which many rental homes in New Zealand fail to meet. Additionally, research has shown that rental properties are of significantly poorer quality than owner-occupied New Zealand homes, and the New Zealand Government hopes to improve the standard of living for renters.

The EQC are introducing the EQCover changes in response to lessons learned from the Canterbury quakes and other recent disasters. The EQC hope to improve the claims process for property owners and provide more efficient cover for natural events.

Who: Rental property owners, managers, investors and landlords all need to know about the changes.

When: From 1 July 2019, landlords must provide a separate statement alongside the tendency agreement detailing commitment to meeting the new healthy homes standards. Landlords must keep records showing compliance. Ceiling and underfloor insulation is required.

From 1 July 2021, all private landlords and boarding houses must ensure that their rental properties meet all healthy homes standards within 90 days of any new or renewed tenancy agreement.

The EQC Act changed in February 2019 to offer the two year claim period, and the Commission’s ability to share property related information in order to settle claims was also adjusted. Removal of EQC contents cover and the increase in residential property cover to $150,000 began taking effect from 1 July 2019. If you have a current fire insurance policy, these changes will come into effect for you on the annual anniversary of your policy (generally the renewal date). If you take out a new policy, the changes will apply immediately.

The Healthy Homes Standards

Heating: The main living area must have a fixed heating device that can heat the room to 18 degrees Celsius.

Insulation: Ceiling and underfloor insulation must either meet the 2008 Building Code for the South Island Zone (R-value of ceiling = 3.3, underfloor = 1.3), or (for existing ceiling insulation) have a minimum thickness of 120mm and be in reasonable condition.

Ventilation: Ventilation must include openable windows in the living room, dining room, kitchen and bedrooms. Rooms with a bath or shower or indoor cooktop must have an appropriately sized extractor fan.

Drainage: Rental properties must have efficient drainage, guttering, downpipes and drains.

Reduce moisture: If a rental property has an enclosed subfloor space, a ground moisture barrier must be installed where possible.

Stop draughts: Any gaps or holes in walls, ceilings, windows, floors and doors that cause noticeable draughts must be blocked. This includes all unused chimneys and fireplaces.

More about healthy homes standards

What to do now

Consider the healthy homes requirements and make a plan to meet the upcoming deadlines for changes or upgrades to heating, insulation, ventilation, drainage, reducing moisture and stopping draughts.

Chat with your insurance provider to assess and understand how EQC changes will affect your current fire insurance policy. If your tenants have insurance, these changes may affect them too.

More information

Find out more about the Healthy Home Standards

Find out more about EQC changes