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Government announces rental sector reform — including regulation of property managers

22 November 2022

On 22 November, the Government made an announcement on rental sector reform including the introduction of a Bill to regulate the property management sector, a public consultation to clarify the acceptable maximum level of methamphetamine residue, and an extension to the Healthy Homes Standards compliance timeframe, is welcome news to REINZ and the profession.

Regulation of property managers — a long time coming

As the industry body representing 97% of New Zealand real estate licensees — and property managers of over half of properties under professional management — REINZ has advocated for change for several years now. In 2019 we conducted a public Call for Change campaign to encourage the Government to act and consult with the industry to develop regulations.

The move to introduce a Bill to regulate both individual property managers and property management organisations is important to ensuring an equitable residential tenancies market for all New Zealanders.

REINZ made public submissions advocating for regulation to the Ministry of Housing and Urban Development (HUD) in April this year and received more than 328 individual items of feedback on HUD’s proposed regulatory framework, which 93% of our members supported.

Jen Baird, Chief Executive at REINZ says: “One third of Kiwis are renters and this number is expected to increase, and more than 40% of those properties are looked after by residential property managers. It is imperative property management services are regulated so there are standards and safeguards in place for a sector where millions of dollars are collected in rent each week, and which has an impact on something as important as someone’s home.

“Regulation recognises the importance of professional property managers and will bolster confidence in the residential tenancy market as a whole,” adds Baird.

Today’s announcement of a new regulatory system for property management services proposes the following:

  • compulsory registration and licensing for individual property managers and property management organisations,

  • training and entry requirements,

  • industry practice standards and;

  • a complaints and disciplinary process.

Initial consultation concluded in April this year, and a Bill is expected to be introduced into the House by May 2023. The Real Estate Authority, which already regulates real estate professionals, will regulate residential property managers — a move our members support.

Government to consult the public on acceptable maximum level of methamphetamine residue

Currently, there are two very different methamphetamine testing levels — the methamphetamine testing and remediation standard NZS 8510 (considered best practice at 1.5 µg/100cm2) and the Gluckman Report (15 µg/100 cm2). This has caused uncertainty for landlords, property managers, tenants and insurers. REINZ supports the opportunity for public submissions before the standard is clarified in binding regulations.

Opportunities for feedback will be available on the following matters:

  • what the acceptable maximum level of methamphetamine residue is,

  • what levels those homes should be decontaminated to, and;

  • when tenancies should be terminated due to high levels of residue.

 “The inconsistency in the measurement of methamphetamine residue has caused confusion and concern for some time. It is important there is clarification of what level of methamphetamine residue is permissible, and therefore who is liable for the cost of decontamination,” adds Baird.

Extension to Healthy Homes Standards compliance timeframe

Private landlords, Kāinga Ora, and community housing providers will have more time to comply with the Healthy Homes Standards following the Government’s announcement today.

For private landlords, the timeframe to comply has been extended by one year — all private rentals must now comply by 1 July 2025, rather than 1 July 2024.

For Kāinga Ora and other community housing providers, the timeframe has shifted from 1 July 2023 to 1 July 2024.

“REINZ’s professional property management members have worked solidly following the introduction of Healthy Homes Standards and have delivered significant change in the stock of rental properties in New Zealand.

“Delays caused by COVID-19 have meant some private landlords who have been trying to meet the compliance timeframe have been unable to due to global supply chain shortages and delivery challenges — all of which have been out of their control. The extension to the compliance deadline will ease pressure on those landlords and housing providers across New Zealand,” concludes Baird.