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Tenants' safety crucial

By Richard Lang, Partner & Janine Ballinger

First published The Press 23 April 2011

Thinking about becoming a landlord? One way that people are helping homeless families at present is by renting out any spare properties they have -  or even their own home, if they have made the decision to move away. 

However, between earthquakes and aftershocks a lot of these properties have suffered some form of damage.  The question is, is the damage to your property bad enough to stop you renting it out?

As a residential landlord, numerous obligations are placed on you for the general health, safety and wellbeing of your tenant.  These obligations must be taken seriously or you could face financial penalties. If you are looking to rent out your property following the earthquakes, you must look at your property and make sure that it:

• Is safe (both inside and out);
• Is well maintained and in a reasonable state of cleanliness;
• Complies with all building, health and safety regulations
• Is reasonably secure;
• Has a secure source of water;
• Has safe plumbing and electrical wiring, and
• Is structurally sound.

At the start of a tenancy your property must be “habitable”.  Habitable basically means that the property is fit to live in. This will usually be obvious but any assessment has to be based on the particular circumstances of the property at the time. Often earthquake damage to the structure or services of the property may not be apparent on a brief inspection.  If you are not sure whether your property is habitable or structurally sound anymore, then you should err on the side of caution and obtain a professional assessment.  If the assessment highlights any issues then you will need to deal with these before your property can still be safely rented out. 

If you believe that your property is “inhabitable” then you cannot rent it out, even if there are people willing to rent in its current condition.  It is not enough to obtain the tenant’s acknowledgment that the property is not habitable – if the tenant has problems with the property down the track this will not stop them from taking action against you. 

So, before you rent your property out, be confident that it can be lived in and ensure that you meet all landlord obligations. 

Perhaps the property is habitable, but some damage that doesn’t impact on the fitness of the property for occupation (for example, the garage or a shed on the property may not be able to be used, but is not unsafe) needs to be fixed.  Before you sign up any tenant, think about what will be involved to remedy the damage and what affect this will have on your tenant.  It is foreseeable that while your tenant is living in the property, you will require frequent access to complete insurance and other assessments, as well as access to complete remedial work. Your tenant is entitled to quiet enjoyment of the property without interference by the landlord and, as a consequence, you must balance the rights of your tenant with your need to get the property repaired.   You need to be open with your tenant and work with them to find a balance as to what access is available to meet your joint needs.  If you negotiate an access arrangement with your tenant you should document it clearly in your tenancy agreement.

If it is obvious that there will be significant interruption, you may need to assess whether it is appropriate to rent your property out at this time.  

In addition to the state of the property, as a landlord you will also be taking on the usual responsibilities that flow under the Residential Tenancies Act.  These include requirements that tenancy agreements be in writing and must comply with the Act, bonds must be lodged with the Department of Building and Housing, notice must be given before accessing or inspecting the property, and tenancies can only be terminated as permitted by the tenancies legislation.  For example, you could find that you may later need to move back into the property you have rented out only to find that because you granted a fixed term tenancy, you cannot remove the tenants.  It isn’t really possible to contract out of all of these obligations, even if you are trying to do someone a good turn by letting them use your house.

If you are thinking about renting out your property, you will be taking on additional responsibilities as a landlord.    You need to think about all of the implications of becoming a landlord before you put your property up for rent.

Richard Lang is a partner of national and trans-Tasman lawyers Duncan Cotterill. r.lang@DuncanCotterill.com

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.