'Warrant of fitness' rental housing tests aiming to tackle 'cold and damp' housing coming to five NZ cities

'Warrant of fitness' rental housing tests aiming to tackle 'cold and damp' housing coming to five NZ cities

Warrant of fitness (WOF) tests will take place on rental properties in five cities early next year as councils and the Accident Compensation Corporation (ACC) look to tackle New Zealand's "cold and damp" older housing stock.

Home assessments will be done on 25 rental properties in each of Auckland, Tauranga, Wellington, Christchurch and Dunedin against 31 measures (see the full list of these below). The tests will take place in January and February with the results published in March.

In a statement Auckland Mayor Len Brown says it's widely known that much of New Zealand’s older housing stock is cold and damp and falls below the building standards of many other OECD countries.

“We are working with the government, not-for-profit and private sectors to tackle Auckland’s housing affordability and availability challenges, so it is only fitting we take a joint approach to improving housing quality, especially for the more vulnerable members of our community,” says Brown.

“The dampness of many of our older homes is well documented as contributing to respiratory and allergic disorders such as asthma and rheumatic fever.”

Auckland Council says the field tests are an important step towards standardising methodologies and checklists between local government bodies to ensure the credibility of the WOF scheme. The testing involves the Auckland, Tauranga, Wellington, Christchurch and Dunedin councils, the ACC, New Zealand Green Building Council, and the University of Otago, Wellington.

"ACC is supporting the warrant of fitness trial as part of our focus on reducing injuries in and around the home," says Megan Nagel, ACC's programme manager for home safety.

"Environmental factors such as poor lighting and maintenance, slippery surfaces and steps and stairs contribute to many home injuries. By helping to address factors such as these, a housing warrant of fitness will potentially support efforts to bring injury rates down," Nagel adds.

Leigh Featherstone, the homestar director at the New Zealand Green Building Council, says he hopes that at the end of the project there’ll be a working tool to rate rental standards nationally.

"This will make sure rental housing isn’t endangering the health of the families living in it. The long-term payoff will be better health, particularly of our kids and elderly," Featherstone says.

However Andrew King, executive officer of the NZ Property Investors' Federation, says a WOF system would be expensive to administer, meaning rents may increase. This, King says, could lead to higher levels of overcrowding as tenants move in with each other to cope with higher rents.

"A more targeted solution is to ensure that rental properties are insulated and well heated with energy efficient heaters," says King.

Here's the full list of assessment criteria

1. Is there a functional, safe stove-top and oven? (Yes/no)
2. Is there adequate space for food preparation and storage? (Yes/no)
3. Is there an adequate supply of hot and cold potable water? (Yes/no)
4. Is the hot-water at the tap 55°C (±5°C?) (Yes/no)
5. Is there a functional toilet, which does not have a cracked or broken seat, cistern or bowl? (Yes/no)
6. Is there a suitably located bath or shower in good working order? (Yes/no)
7. Are there secure or high level cupboards or shelves for storing hazardous or toxic substances out of children's reach? (Yes/no)
8. Is there a fixed form of safe and effective space heating? (Yes/no)
9. Do the bathroom, kitchen and all bedrooms have some form of ventilation to outside? (Yes/no)
10. Is the house reasonably free of visible mould, i.e. the total area of mould is less than an A4 sheet of paper? (Yes/no)
11. Are the power outlets and light switches safe and in good working order? (Yes/no)
12. Is there adequate indoor lighting? (Yes/no)
13. Does the house have adequate working smoke alarms? (Yes/no)
14. Have the windows got effective latches? (Yes/no)
15. Have high windows got security stays? (Yes/no)
16. Are there curtains or blinds in the bedrooms and living area? (Yes/no)
17. Do glass doors have safety visibility strips? (Yes/no)
18. Does the house have thermoplastic insulated cabling? (Yes/no)
19. Does the house have ceiling insulation to WOF standards? (Yes/no)
20. Does the house have underfloor insulation to WOF standards? (Yes/no)
21. Is the house weathertight with no evident leaks, or moisture stains on the walls or ceiling? (Yes/no)
22. Is a ground vapour barrier installed under the ground floor? (Yes/no)
23. Is the house in a reasonable state of repair? (Yes/no)
24. Is the storm and waste water drainage being adequately discharged? (Yes/no)
25. Is there any water ponding under the house? (Yes/no)
26. Is there adequate outdoor lighting near entrance ways? (Yes/no)
27. Does the house appear to be structurally sound? (Yes/no)
28. Are there handrails for all internal stairs and all outdoor steps that access the house, and do balconies/decks have balustrades to the current Building Code? (Yes/no)
29. Is there fire egress to the current Building Code? (Yes/no)
30. Is the address clearly labelled and identifiable? (Yes/no)
31. Are there securely locking doors? (Yes/no)

And here's some question and answers supplied by Auckland Council

When will the field tests start?

The tests will start in January and run through to the end of February. The results will be published in March.

What will the assessment cover?

The assessment uses 31 criteria, an associated checklist and a technical manual to guide assessors. See Attachment 1 for the criteria and checklist.

How long will it take?

The assessment should take only about an hour from when the assessor enters the front door to when they leave.

What does the assessment aim to achieve?

The assessment aims to identify whether the rental property meets basic housing quality standards that impact on the following areas: warmth (or ability to effectively heat), dryness, mould and dampness, injury risk, sanitation, basic state-of-repair and basic living needs.  These factors impact the health and safety of the occupants. 

Why is a WOF being considered in the first place? 

Housing is one of the key material determinants of health and well-being.  New Zealand housing is of a lower quality than most OECD countries and several national surveys and research studies have shown that private rental housing is in poorer condition than either social housing, or houses that are owner occupied.   Living in substandard housing is seriously damaging the health of New Zealanders with children from low-income families, Māori and Pacific peoples disproportionately affected.  Over 70% of all children who are in poverty live in rental accommodation (20% in Housing New Zealand housing and 50% in private rentals). 

The Children’s Commission’s Expert Working Group on Solutions to Child Poverty recommend the introduction of a Rental Housing Warrant of Fitness (WOF) as a means to addressing the health and safety of a large proportion of children living in poor quality private rental housing. 

In addition, each year, ACC receives around 600,000 claims for injuries that happen in or around the home.  It is estimated that around 30% of home injuries are caused by environmental factors such as poor maintenance, slippery surfaces, paths, steps and stairs as well as poor lighting. 

The overall aims of this partnership group for a WOF is to improve the health, quality of life and energy bills for those in rental accommodation.

What is the Government doing?

The NZ Government signalled it wants to develop a WOF for use initially on its 69,000 Housing NZ properties with a potential wider roll-out to other areas http://www.beehive.govt.nz/release/housing-wof-be-developed-and-trialled

How does this field test relate to the Government’s project?

The parties in this agreement will share the assessment tool and the findings with the Government with a view to collaborate to create one WOF assessment tool that can be applied in the social and private rental markets.

Have other countries implemented a Warrant of Fitness?

Yes, in 2001 the United Kingdom established a ‘Decent Homes’ standard, which states that houses should be warm, weatherproof and have reasonably modern facilities.  Rather than assessing against a fixed standard, the HHSRS employs a risk assessment approach to enable risks from hazards to health and safety in dwellings to be minimised. The system applies to all dwellings, regardless of ownership.

What type of properties will be involved?      

There will be a mixture of private rental properties and Council social housing properties.

How will the homes be selected?

The individual councils involved in the field test will recruit landlords to volunteer to participate and the councils will also select a sample of their social housing portfolio for the field test. 

Who will conduct the assessments?

Each council involved in the project will be responsible for identifying service providers to conduct the assessment. This may be Council staff (i.e. environmental health officers or eco design advisors) or independent contractors with experience in home assessments. All of the assessors will undergo training with the checklist and technical manual prior to the assessments beginning.

Will the homes be getting an actual “warrant of fitness” rating?

No, this project is just to test the draft assessment tool to see how practical and usable it is. The homes will not receive an actual WOF rating.

Landlords will be presented with the assessment findings to help them understand how their properties performed in the assessment. Landlords will also be provided with information such as insulation schemes, curtain banks and other informative material.

What are you predicting for pass/fail rates?

We are predicting a relatively high fail rate. New Zealand’s housing stock has well-documented quality problems (i.e. lack of insulation, dampness and inadequate heating) and there are some fundamental things that are missing in many homes to keep them warm, dry, healthy and safe.

What other objectives do you have?

We want to gather feedback from participating landlords on effective and transparent ways of engaging with the rental housing sector. We want to understand landlords’ experiences to having their house inspected, their feedback on the field test and their post-inspection intentions.

We want to understand what type of tenant-education material will be effective and useful to be delivered in conjunction with a housing WOF assessment to help address issues related to occupant behaviour (e.g. venting the home properly and the use of un-flued gas heaters causing moisture problems and health issues).

We want to understand tenants’ experiences towards having their homes inspected and their understanding of the benefits, or otherwise, of a WOF.

We want to share the results of the field test with the Government and collaborate with a view to producing one effective WOF tool for all of New Zealand.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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"8. Is there a fixed form of safe and effective space heating? (Yes/no)" 
 
Can I move a free standing heater from one room to the next as the inspector walks around?
 
"10. Is the house reasonably free of visible mould, i.e. the total area of mould is less than an A4 sheet of paper? (Yes/no)." 
 
Can I make the tenant follow the inspector round and clean up any mould like they should be doing anyway?
 
 
"...each year, ACC receives around 600,000 claims for injuries that happen in or around the home.  It is estimated that around 30% of home injuries are caused by environmental factors such as poor maintenance, slippery surfaces, paths, steps and stairs as well as poor lighting."
 
If that's one of the reasons behind this why arn't the checks enforced on owner occupied homes?
 
Last question, what insulation companies are listed on the NZX?  I need to hedge. 

#8 Its not rocket science, though maybe in your case its the equiv. Fixed as in attached to the building fabric, I assume by use of a tool which would be needed to remove it
Insulation, and access to current code? yet that is retrospective legislation..
Really the lack of insulation impacts the cost to heat the home. If the tenant objects to those costs, well they move to a place thats insulated.
Owner occupied, because its not a service the owner occupier is paying someone, ie you for, but I agree with what you imply. ie such a WOF means a renter can have a "good" home but someone like say myself who owns my own home can go take a hike.
The Greens want to make this law so any sub-standard rental accomodation is toast. That means the landlord sells up as per the Chch woman now living in a tent that is the end result, she's worse off.
regards
 

It seems humour would be rocket science in your case, I wasn't seriously suggesting I would follow the inspector with a heater, tenant and a cloth. 
 
What's your interest in all this anyway?  Are you a tenant? Landlord? Armchair expert?

So the plan is to only test the properties of landlords who volunteer.

Yes, at this testing stage.  But it will become law. 
 
My guess is a WOF will have to be presented before such time as advertisement for rental accomodation can be placed in future. Best if the scheme extends to owner-occupied stock too. Perhaps council rates could be abated to the cost of obtaining the WOF in the first inspection period.
 
About time - huge benefits to the health system and ACC account.

Law, yes 2014 or 2017 its a major point of the Greens its just when IMHO, not if.
I cant see how the owner occupier is going to work, ie there is no one in effect with lots of $s to "force" into upgrading.  So we'd see owner occupiers forced to sell at horrendious losses as the next buyer would demand a huge discount to do the work?  Plus houses that met the building standards of the day should not have to be retrospectively forced to conform to todays stds, the cost is un-reasonable.  Plus if the owner wants better like the renter, well move.
Then there are mortgagee sales, oops the bank finds it has an un-saleable house, costs passed onto the defaulter....
Not that I dont agree on the benefits, however as clearly shown a sub-standard house is better than a tent in a park.
Be careful what you wish for.
regards

Huge benefits for landlords looking for reasons to kick tenants out and get official approval from the Tenancy Tribunals too Kate!
 

I imagine the law will provide a rental property owner a certain period of time to bring a property up to WOF standard. If that property owner chooses not to bring it up to standard, then one would assume they will stop renting it (perhaps occupy it themselves or put a family member in) or sell it - and both are accepted/lawful reasons to give a tenant notice anyway. So, no need for involvement by the Tenancy Tribunal at all.
 
At least that is my understanding.

Kate!
You must live in Disneyland if you think that.
Reconsider, please, who will START the process.
 

Sorry, I'm not sure I understand.  I assume landlords will "start" the process to obtain a WOF - just as a car owner does?  And just like a car owner - if it fails the test, you either pay to repair/bring up to standard, or dispose of the asset (at a reduced cost because the next owner is expected to incur the cost to bring the asset up to the standard)..  

Trials ultimately become compulsory.
Renters cannot afford more than incomes allow.
Ultimately property prices for rental stock will drop especially as interest pressures increase.
Where will the system break?
Landlords will liquidate in favour of occupying owners who will have the option of doing nothing or doing something.
Hence a good effect all round with some taking a bath.
Or is this just wishful thinking?
 

The Green's have said a WOF is going to happen, so 2014 or 2017 plus a CGT. Going to be interesting next year on what landlords do, some will bail, or even are bailing, the Q is, how many.
regards

"Or is this just wishful thinking?"...
 
Just put yourself in the shoes of an investor, double digit growth forecast into next year and probably 2015 also.  If WOF's add $500 per property per year to your costs would you even blink?  The most expensive thing on that list is probably the wiring at $6 - $10k depending on the size of the house.  If you get stung you'd just wear it and still make 100% returns. 
 
I'm an investor, not solely in property, if I see anything that tells me prices in Auckland are going to stagnate I'll sell up and move on.  Right now there is nothing to suggest that will happen.  I would sell up tomorrow if the govn said it's halting all immigration but we all know that's not going to happen. 

I wonder if there will be a WOF for tenants too?
 
1. Doesn't break the functional, safe stove-top and oven? (Yes/no)
2. Doesn't ruin the adequate space for food preparation and storage? (Yes/no)
3. Doesn't break the functional toilet, crack or break seat, cistern or bowl? (Yes/no)
4.Doesn't break/remove the fixed form of safe and effective space heating? (Yes/no)
5. Opens the provided windows in bathroom, kitchen and all bedrooms to of ventilate to outside? (Yes/no)
6. Doesn't smash holes in walls  to a total area greater than one A4 sheet of paper? (Yes/no)
7. Doesn't break the handrails on internal stairs and all outdoor steps that access the house and balconies/decks that have balustrades to the current Building Code? (Yes/no)
etc.

Had tenants that would fail all those once - but they moved to Aus.

bob, such a WOF scheme for leased properties will also mean landlords have yet another reason to kick tenants out and more easily justify it should their removal go to a tenancy tribunal hearing.
Any perceived threat to the WOF standards by a tenant will justify booting out the ones a landlord decides she/he doesn't want.
Anyone who knows the Tenancy Tribunal process should be concerned these rules will be used against them. 
 

Good point - "really sorry but the propery isn't up to WOF standard so you got to move out right  now so you can live somewhere nice."

Exactly.

The WOF for tenants is called 'doing your homework' - getting references from prior landlords, employers etc. and seeking proof of income. These things are still lawful questions/requirements that any landlord may have, are they not?
 
The WOF is a win-win for everyone - as the better condition that a house is in - the better the quality of tenant that can be attracted.. and as a landlord you don't need to be concerned about such prioblems as per above.

Agree with you Kate. Means more money I have to count too :)

Exactly. What I refer to as 'slumlords' (and that includes central government) have had it all their own way for too long.

Student towns of dunedin and palmy likely find some of the cheap and nasty flats in trouble with expensive upgrades grades required.

An old school open fire wouldn't or shouldn't be counted as space heating.

A lot of these properties are in fairly central areas that the students like, so if they are sold to fhbs as a 'diy dream' then where are the students going to live? Hope they're going to bumping up the living and accommodation allowances as no one's going to want to be a student flat landlord if they are spending 5k every year getting the flat back up wof standard

If the level of student accommodation becomes tight, it is likely that the universities will build more purpose-built student accommodation - that would be a good thing IMO. 

Dunedin student accommodation is getting to be a pretty professional business these days.
Been a lot of new builds for that market for nearly 30 years.   Lots of good buildings.

Here we go again.
More controls and regulations on their way.
Another army of bureaucrats soon to be swarming over the landscape.
Most professional landlords would happily keep their rental homes up to scratch
but there are a couple of snags.
(a) Why only rental properties? Why not every house?  Do people who live in their own homes not deserve healthy conditions as well?
(b) The upgrading of the many rentals that will have to be completed has to be paid for somehow. Will it make some properties uneconomical?
It’s hard enough today trying to get a decent return, but this may the last straw especially for older houses.
Landlords should not let people live in unhealthy conditions, but have you ever seen how some property’s are treated by a lot of tenants?
You can do all the upgrading you like but some tenants can reduce the good work to splinters in just a few hours.
 A WOF for tenants would a good start, and 24 hour eviction for the worst cases. What makes it even worse still is that The Tenancy Tribunal is unbelievably slow to act and the whole Tenancy Act a one sided bad joke.

Don't worry Big Daddy aka Olly Newland.
Regulations such as these will give landlords more ammunition to boot tenants out.
Imagine how "morally correct" the landlord will be in the tenancy tribunal when she/he tells the adjudiator "the tenant is threatening the property's WOF standards."

Surely only the absolute worst subset of rental properties would fail the above test?  And what might that be as a percentage of all rental properties? I'm guessing around 5%. And none of these repairs to bring up to standard would be significant costs - aside from perhaps the standard of wiring (which should definitely be required to be made safe - given a rental is a commercial business).
 
And I agree with you - can't see any reason why private houses should not also enter in to the scheme - after all, it's the same health/ACC system. Owner-occupiers would likely have a longer period of time to comply.

Some of my older houses on piles don't have under floor insulation, not a major to correct.  Your right about the wiring.  All of the big ones, structural or leaky building, I wouldn't have bought in the first place. 
 
There's going to be a large number of people turfed out of apartment buildings. 
 
I wonder what the pre-requisites will be for becoming a WOF inspector?

Another unintended consequence a'loomin' that I see, especially in areas where house price inflation is galloping along at a brisk clip:

  • Use the WOF fix-up as the lever to tip the tenants out.
  • Board 'er up and wait for a coupla years.
  • Sell 'er and trouser the CG (which at an annual compounding rate of 15%, should pay handsomely for the rent foregone and the interest/rates/insurance paid in the interim.)

Of course, common taters may spot a Fly in this ointment somewheres - but I cannot. 
 
Perhaps someone may care to volunteer a worked example?  Because all depends on the ratio of CG to Expenses/Rent foregone.

The fly might be capital gains tax as it exists in law today - as the only reason to board up and sit on the asset (as opposed to sell it) would be to wait for such gains.  Reasonably easy for IRD to enforce as there would be no income registered against the asset for the board up period.

Listen to all the landlords here, woe is me, woe is me. No tax, no capital gains issues. Try running a real business that actually produces something.

When people say a "real business that actually produces something." they usually mean one that causes money from overseas to end up here. Sadly a lot off us can't afford a farm and are stuck working in parasite industries like education, healthcare etc. that don't help the balance of trade.

Oi moa man!
No "woe is me, woe is me" from me mate.
If the politicians want to meddle in the market, my job is not to try and understand their irrationality, my job is to profit from it.

Again - well done - you are starting to think about running a proper, sound rental property business.  Too many think of themselves as "rental investors" (as opposed to business owners) and hence have ignored basic business rules and 'banked' on being able to offer an inferior product for all the wrong reasons. 

How about a WoF for tenants.  Something like a 'passport' listing past renting history by the tenant.  Including certification that they paid their rent in the past.
Or open entry into Tenancy Tribunal matters.   Where anybody could seen the matters recorded in the past against tenants.  (or against landlords for that matter)