Methamphetamine - more clarity required for landlords and property managers

Caught between a rock and hard place is how many property managers feel when it comes to dealing with methamphetamine and rental properties, and these feelings were made loud and clear in a recent REINZ survey of property managers.

Under the Residential Tenancies Act 1986 (RTA), landlords must provide the premises in a reasonably clean condition ensuring they comply with health and safety. Tenants must not use the rental property for an unlawful purpose - this includes smoking or manufacturing meth.

If landlords rent out contaminated properties, they may be breaching their obligations under the RTA. They may also be breaching other legislation such as the Building Act 2004 and the Health Act 1956.

Here’s where it starts to get confusing…

Whilst not law, the methamphetamine testing and remediation standard NZS 8510 is considered best practice at 1.5µg/100cm2. The Standard was developed by a Standards Development Committee consisting of various representatives from Central Government such as the Ministry of Health, Ministry for the Environment and Housing New Zealand Corporation. However, most Tenancy Tribunal rulings now use the Gluckman Report as their ‘yardstick’ and refer to methamphetamine levels below 15µg/100cm2 as being unlikely to give rise to any adverse health effects.

The difficulty arises where a property has been tested prior to a tenancy commencing with clear meth readings, then post tenancy it is tested and records meth readings up to 14µg/100cm2 .

Based on how the Tenancy Tribunal considers contamination levels, it will be unlikely that the landlord of the property will be able to recoup any decontamination costs from the tenants.

We recently surveyed REINZ members and the majority said their Tenancy Tribunal decisions in regard to contamination were based on the Gluckman Report. Less than 4.3% of decisions referred to NZS: 8510. Unfortunately, this is resulting in owners only being able to recoup decontamination costs for areas with readings above 15ug/100cm2 .

The flow on effect being many landlords now simply don’t test, are frustrated and don’t understand the current system. This is a real concern for incoming tenants/ property managers who may be unaware of existing positive readings.

Additionally, if a landlord finds themselves in a situation where their property has had meth contamination, they will have a very difficult time trying to prove who caused this if a pre-tenancy meth test has not been undertaken.

But is if fair?

The question landlords are now asking, is whether it’s fair that an owner wanting to ensure they keep their home meth free will need to undertake remedial work that may or may not be covered by their insurance policy?

Each insurance company is currently taking their own approach in regard to methamphetamine, and landlords and property managers need to look at individual policy wording as approaches range from some based on the Gluckman Report, to the NZ Standard or even some other level as insurers determine for when damage has occurred.

Who pays the Insurance excess for that decontamination?

Generally, if the Tribunal feels they have sufficient evidence on the balance of probability that the tenants caused the contamination, this will be awarded to the landlord (treated like careless damage), and the same applies with most retesting costs.

Tenants who smoke, sell or manufacture meth in a rental property are using the property for an unlawful purpose. The fines associated with this breach have now increased up to $1,800.

What are REINZ Property Management members calling for?

REINZ Property Management members would like to see one fixed methamphetamine standard that is ruled on consistently and a set of rules that relate specifically to residential tenancies. This would provide clarity to both parties.

The industry is still waiting on a full review of methamphetamine safety levels within the meth-testing standard to be undertaken. Whether this will result in the regulations being officially changed we do not know. Many property managers still continue to operate in line with NZS: 8510.

The Residential Tenancies Amendment Act 2019 allows for regulations to be developed to set out:

• maximum acceptable level for meth contamination

• processes for testing

• decontamination of rental properties.

Jo Rae, Head of Property Management, REINZ