Healthy Homes Standards Have Changed
Changes to the healthy homes standards came into force on 12 May 2022. The changes primarily affect the heating standards, but there are also modifications to ventilation, moisture ingress and drainage standards.
Heating: If your rental property was built to the 2008 Building Code and the insulation and glazing meets the 2009 insulation and glazing standards, you can apply the new heating formula when assessing your property’s heating obligations. This acknowledges that modern homes are generally warmer, dryer and easier to heat than older properties. The changes allow the fitting of a smaller heating unit in your rental and, as an added benefit for tenants, a smaller unit uses less power.
Ventilation: The standards now allow for certain existing continuous mechanical ventilation systems to comply with the ventilation standards. The key is, however, that the system must extract the air outside, meaning HRV and DVS systems won’t be sufficient. If you already have a continuous mechanical ventilation system in place, you may not need to do further work to comply with this requirement.
Moisture ingress and drainage: Additional guidance is available in relation to moisture barriers, particularly where installation is not reasonably practicable in the subfloor area.
For more information on the changes, click here.
Rent Relief for Commercial Tenants
We wrote an article reviewing the rent relief provisions available during the early months of the Covid pandemic in the standard commercial lease (see the the Winter 2020 edition of Property Speaking).
There continue to be a range of factors beyond the control of a landlord and tenant that could leave a tenant without the reasonable use of their premises. Some commentators have said that we may be in for another Covid wave and there may be some unforeseen situations (such as the protests in Parliament’s grounds in February-March) that could further disrupt businesses and could create genuine safety concerns preventing tenants from accessing their premises.
If your lease uses the Auckland District Law Society Deed of Lease Sixth Edition template, you will find the rent relief provisions at clause 27. Clauses 27.1-27.4 apply where the property is partially damaged so you don’t receive the full benefit.
Clauses 27.5-27.6 apply where there is an emergency and a tenant is prohibited or restricted from accessing the premises.
Access restrictions must be imposed by a competent authority (such as the Ministry of Health) as in the lockdowns that New Zealand faced in 2020-21. The rent relief provisions are, however, unlikely to apply if your workplace is infected with Covid and you need to close your premises for a week to isolate.
In each case, a landlord and tenant should discuss their particular circumstances and reach an outcome that works for both parties. If you want to know if rent relief is appropriate in your particular circumstances, please contact us.
Rising Interest Rates Causing Anxiety for Borrowers
As property owners are aware, interest rates are rising. If your fixed term mortgage is coming up for renewal, you may be feeling anxious about what your repayments could look like once your current rate ends. If you have a floating rate, your rates will also be increasing.
There are some options available that you can discuss with your lender if you face unforeseen or significant financial hardship.
Mortgage holidays: A mortgage holiday is a temporary break from making mortgage repayments; these are generally given for a six-month period. The break can either cover both your principal and interest payments, or cover just your principal payments. It’s important to understand that interest on your loan will generally continue to accrue. If you opt for a total payment break then interest will accrue on both the principal and the unpaid interest as it accrues; make sure you discuss with your lender before committing to this.
Extending your mortgage term: Lenders can also extend the term of your loan. For example, if your current mortgage is due to be repaid in 10 years, you may be able to push it out to 15 or 20 years. This has the effect of reducing your weekly or fortnightly principal repayments. Remember, however, that you will end up paying more in interest in the long run. Make sure you discuss the implications of this fully with your lender.
Talk to a mortgage broker: Before you re-fix or float your interest rate, do talk with a mortgage broker. Mortgage brokers aren’t just used when you are looking for finance to purchase a property. They can also compare interest rates offered by other lenders and can negotiate on your behalf. When working with a mortgage broker there is no direct cost to you for using their services; most of the time the lender will pay your mortgage broker’s fees.
If your interest rate is coming up for renewal and this is causing you undue stress, come and see us to go over your options before talking with your lender and/or your broker. We are here to help.