Insulation requirements – what’s it got to do with real estate work?
From 1 July 2019, ceiling and underfloor insulation will be compulsory in all rental homes (where it is reasonably practicable to install). Landlords will need to make all reasonable efforts to find out what type of insulation is in their rental property. They will be required to provide an insulation statement with all tenancy agreements that explains the type of insulation in the home, where it is and what condition it is in.
We’ve already heard from people who have bought properties intending to rent them out who weren’t aware of the new requirements. Those buyers are now facing the unexpected cost of insulating their property to the required standard.
If you’re listing a property for sale and interested buyers mention they’re looking for an investment property or rental property, the best practice is to check that the buyers understand the new insulation requirements. It may be helpful to ask your vendor about insulation when you list a property so you're prepared for any questions from interested buyers. We have heard of examples where vendors have completed an insulation statement for the licensee to provide to interested buyers. Where practical, provide evidence that insulation has been installed, for example, receipts.
It’s important buyers know about the new insulation requirements, because:
- any landlord who does not insulate their property faces a potential fine of up to $4,000.
- if a complaint is made to the Tenancy Tribunal and the Tribunal considers a landlord is in breach of their obligations, it may order exemplary damages against the landlord or terminate a tenancy agreement.
- buyers may need to factor in the cost of getting the property insulated if it is not already insulated.
You can find more information about the changing insulation requirements on the Tenancy Services website(external link).
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