IN THIS ISSUE Choosing a Property Manager | Minimising Risk | Landlord Responsibilities
THE BIG READ:
THE BLURRED LINES BETWEEN
PROPERTY MANAGEMENT AND
From the thousands of clients that we email, last week we have had two enquires asking if it will be compulsory to test for meth once the new law, the Residential Tenancies Amendment Bill No.2 (RTAB2), is passed sometime in the near future. And where there is two, there is likely to be more. So let’s clarify a few things.
The information on the RTAB2 in our newsletters is not “guesswork” “speculation” or “scare-mongering” as it is directly reported facts from the state of the coming law, parliamentary releases, current law, case law and information from and contact with ministerial offices. Whether you are a Landlord, Property Manager, Tenant, Vendor or Purchaser our information is vital to you.
With the RTAB2 set to be shortly passing into law, this means the contents of the bill becomes legally enforceable, which is what being a law means. Laws ensure compliance and prevention of behaviours that cause harm or loss to others either from our direct actions or negligence on our part. If someone complies with the law, all is well, however, if someone breaks a law, causing loss or harm to someone else, then there are consequences.
Whether you are a Landlord, Property Manager, Tenant, Vendor or Purchaser our information is vital to you
With the Property Management Industry and Meth testing industry competing on a daily basis for horror story headlines, there have been well deserved calls for regulations within both industries. The Meth testing Industry is a little further ahead in terms that we have a regulated testing industry with a published New Zealand Standard (NZS 8510:2017) to outline requirements for the testing and the decontamination industry. (Regulation of the decontamination industry has yet to occur.)
However, regardless of the existing standards and regulations and the fact that the Government is set to shortly make enforceable laws surrounding meth testing in the RTAB2, there is a toxic view (excuse the pun) of the meth testing industry, given the release of the Chief Science advisors report in May 2018 in which a flawed meth testing policy by Housing New Zealand was revealed and the public perception of meth testing as a whole, took a tumble. What has been overlooked by many was that the report raised great questions about methamphetamine use in homes and it is important to understand the intention behind those.
The Chief Science Advisors report agreed with NZS8510:2017 which sets a minimum level for clandestine laboratories at 1.5ug/100cm2
The intention of the report was to determine a Maximum Safe Level of contamination for use of methamphetamine, which, once a property exceeded this number, it would then be a legal requirement to return it to a safe level in accordance with the New Zealand Standard. The Chief Science Advisors report agreed with NZS8510:2017 which sets a minimum level for clandestine laboratories at 1.5ug/100cm2 where health effects are not likely to be observed if tests show the property is under this threshold. Remember, this threshold is a 300~fold safety buffer which is designed to protect the most vulnerable in society from the toxic effects of methamphetamine manufacture.
Meth Xpert NZ welcome the new RTAB2 law change and a review of the level set for methamphetamine use and any amendments made in accordance with the Standards and Accreditation Act 2015. The pending law change could not be more timely, as there are still a number of meth testing and decontamination companies that, although the standards have been out since 29th June 2017, are still choosing to ignore and deliberately fail to with comply these standards. This exposes the property owner, unbeknownst to them, as they may have breached the law.
The problem has been misinformation
The problem has been misinformation. Many people in all parts of the housing industry have simply failed to comply with the Standards, or have offered poor and negligent advice surrounding the Standards and the law. As always, good advice comes from industry experts and we would never seek to tell a Real Estate agent or Property Manager how to do their job as they should never tell us how to do ours. That is simply because they do not know how to do our job. Many do not know the robust science and worldwide proven methodologies behind it, let alone the vast rulings and laws behind it. Many simply do not know the laws and it becomes our responsibility to train them in that respect.
Our Meth Xpert trainer is a qualified NZQA Assessor and adult trainer. The training we offer to our clients is there to ensure that everyone is aware of their responsibilities, understands and applies the legality of their role and minimises the risks for all parties. Because the property manager is merely the property owners agent, it is the property owner who suffers when poorly informed decisions are made surrounding risk management of their assets, affecting their value. We educate and train hundreds in the industry ever year to avoid misinformation, yet we cannot teach everyone and there are still many in the industry who are uneducated in this and applying that misinformation in managing property owners assets everyday.
As with all professions there a good operators and bad operators
In April 2018, Consumer published an article titled “Fixing the Rental Market” and in it, they state: "We’ve previously reported on problems in this industry, which has attracted complaints from both renters and landlords for sub-par service and failing to get to grips with the basics of tenancy law. But it’s so far escaped regulation. Anyone can set up shop as a property manager, no qualifications required." This is the same for the methamphetamine testing Industry, however, there are some layers of protection within the Fair Trading Act around the requirements within the New Zealand Standards that a testing or decontamination company must comply with if they are claiming compliance with the New Zealand Standard NZS8510:2017.
Meth Xpert NZ work alongside many property management companies who take their obligations seriously, and are worth their weight in gold. They work hard to ensure your assets are adequately protected, up to date with proposed legislation, and have robust procedures ranging from tenancy selection, to routine inspections, to maintenance and repairs, collecting rent, through to change of tenancies. As with all professions there a good operators and bad operators, and property management & meth testing companies are no different. It’s important to do your research and not tar all operators with the same brush.
Are you getting true value for money from those who are managing your assets?
It is still a widely accepted practice within the property management industry to continue to operate with an ignorance of the current requirements. Negligence such as this potentially exposes their clients, the property owner, to the back paid rent, exemplary damages, and the $4000 fines proposed within the Residential Tenancy Amendment Bill No. 2.
This begs the question, of whether or not a property owner is getting true value for money with a particular property manager who will charge 6%-9% of the weekly rental income, and then ignore basic legal requirements, exposing you to the risk. You pay them to manage that risk and you expect them to be aware of any and all legal obligations that pertain to your investment.
Property Owners must ensure that those managing their assets are meeting industry compliance
In the same article, Consumer had this to say as advice for property owners thinking of engaging a property manager:
Before you sign-up, quiz the manager on their experience and qualifications.
Check the contract carefully. What are the fees? How do you cancel? Some companies stipulate a 12-month minimum term. If you're not comfortable with this, negotiate or don't sign.
Keep track of payments. Make sure the company is passing on rent payments promptly. If there's a delay, contact the company immediately to find out why.
Request detailed inspection reports. You may want to inspect the property yourself periodically. Property managers' inspections may be once-over-lightly. They may be in and out of the house in less than 5 minutes.
Stipulate if you have a preferred tradesperson. Property managers will usually have their own tradespeople and they might not be the cheapest.
That last point could not be more accurate. Many property managers have their preferred tradesperson and contractor, and, whilst they may do the job “on the cheap” or “at the best possible price” if they are unqualified they place you and your asset at risk. Ask them if they are aware of their obligations as a Person Conducting Business Or Undertaking (PCBU) acting in your stead.
“Owners and tenants need to have confidence property managers are fit to do the job."
Check with your existing property manager or potential new property manager who they are using to ensure the compliance of your property. Make sure any and all contractors comply with the law, their industry standards and meet their obligations under the Health and Safety at Work Act, or you may end up with a claim against you.
Consumer go onto say: “Owners and tenants need to have confidence property managers are fit to do the job. The current unregulated market isn't providing any reassurance this is the case. We can’t see why property managers have escaped regulation when related trades haven’t. At a minimum, we'd like to see mandatory registration requirements, backed up by professional standards and an effective disputes system. If you use a property management company, be on your guard. There are few safeguards to fall back on if things go wrong.”
Ask: Are you qualified under the New Zealand Standards to conduct meth testing?
Choosing the Right Person to Manage Your Property
The Tenancy Tribunal have provided this helpful guide; When you’re talking to a potential property manager, you may wish to ask them some of these questions to find out more about them:
What are your qualifications?
Are you a specialised property manager or a real estate agent who also does property management?
How long have you been a property manager in the area?
Do you invest in the area?
How many staff do you have? What are their roles? Do you have staff that are just responsible for finding good tenants?
Are you a member of a professional body with a code of ethics?
How do you manage properties over holiday periods?
How many properties does your business manage? How many are currently vacant?
How long does it normally take to fill a vacancy in the area?
What kind of insurance coverage do you have? Is there any fidelity fund coverage?
What computer system and software do you use?
Can I see an example of a monthly reporting package?
Have you appeared in Tenancy Tribunal cases? If so, what happened?
How do you keep up to date with changes in renting law?
Remember; whilst you need a helpful guide in the unregulated property management industry when you are selecting a property manager, you only need to ask one question when choosing a methamphetamine sampling company to do your work: Are you qualified under the New Zealand Standards to conduct meth testing?
The best advice to clients is to mitigate and minimise risk
Minimising Your Risk
There are obvious changes on the horizon in both industries. Meth Xpert look forward to regulations becoming legally enforceable for both industries. This will bring into alignment some definitive enforceable requirements for the end user of both services, bringing fairness to both landlords and tenants.
Meth Xpert NZ will continue to give our best advice to our clients to mitigate and minimise their risk. There are sadly still those within the property management industry who are happy to tell a landlord what they want to hear, in order to add their property to their portfolio. However, the financial risk at this stage is still the property owners. If you do not test pre tenancy post tenancy, you run the risk of not being able to claim insurance and being unable to prove culpability.
If you do not use a qualified sampling company you run the risk of the evidence being insufficient to prove culpability at any court. And, even more concerning, if you do not use a qualified company to test, your property may still be contaminated, resulting in claims and exemplary damages from any occupants or workers who have entered the property under the misleading information that it was safe to work in without protective equipment.
Sometimes the hard way is the easy way, and you need to hear some home truths, if a property manager is telling you to conduct methamphetamine testing to reduce your risk, these are the property management companies that truly have your best interest at heart and are the ones that are seeking to comply with the upcoming testing legislation.
Landlords will have a power of entry to their property in order to conduct contamination testing
The Proposed Law within Residential Tenancies Amendment Bill No.2
Contained within the RTAB2 are sections that specifically relate to methamphetamine contamination, or, as the bill has called them “Contaminants.” Some of the specific points outlined in the RTAB2 are:
The RTAB2 will prescribe a maximum level of contaminants.
Currently the level for contamination from manufacture of methamphetamine is 1.5ug/100cm2. There is some debate around the level that should be set for use. Any process to determine a level for methamphetamine use will have to go through the same process that the current standard NZS8510:12017 went through. They simply cannot just use a report, no matter where it is from, and make it law, it must comply with the Standards and Accreditation Act 2015.
The RTBA2 provides a lawful and legally enforceable way for a landlord to protect their assets from Methamphetamine Contamination and damage.
Landlords must also disclose to their tenants their insurance details; Type and Excess.
If a Landlord chooses to not have any insurance cover, they must disclose to their tenant that they do not have that insurance, methamphetamine cover, fire or general, etc. They then have no recourse to claim insurance for that type of damage caused by tenants. At any tenancy tribunal hearing to seek redress and damages they will be questioned as to why they did not have insurance and damage claims may be denied as a tenant would perhaps only be liable for the amount of insurance excess were the landlord insured.
Landlords are liable for a $4000 fine per offence and exemplary damages and back paid rent if providing an unlawful premises.
Landlords will have a power of entry to their property in order to conduct contamination testing.
Landlords will only be able to evict tenants for methamphetamine contamination if they have proof that contamination occurred during their tenancy.
This means that in order to establish proof, a pre-tenancy and then a post tenancy Methamphetamine Screening test will ensure that the obligations of the law are met, along with insurance obligations.
The RTBA2 will prescribe who is authorised to carry out methamphetamine testing and what parts of testing.
In section 7 of The New Zealand Standard it states that NZQA Certified Samplers are able to conduct screening assessments only and that those screening assessments must comply with the New Zealand Standards if they wish to claim that their testing complies with the New Zealand Standards NZS8510:2017.
The standard further states that only IANZ Accredited Samplers are able to conduct Detailed Site Investigations, Pre and Post Decontamination Sampling. IANZ Accredited companies are externally audited to ensure compliance with NZS8510:2017. Only IANZ Accredited Sampling companies are able to authorise a clearance certificate for a Decontamination Company to issue for a property.
The RTAB2 offers protection to both Landlords and their tenants.
A landlord will have a duty of care to find out whether a property is contaminated or not
Duty of Care
Under the RTBA2, a landlord will have a duty of care to find out whether a property is contaminated or not. The testing and decontamination must comply with the standard which will be Law and, the often quoted ignorance section always applies, Crimes Act 1961, Section 25 “The fact that an offender is ignorant of the law is not an excuse for any offence committed by him or her.”
It would be an offence to place someone into an occupancy where you knew that the dwelling was contaminated at levels prescribed by the law and the people responsible would be held accountable.
But, like all laws, you only suffer the consequences if you break them and you get caught. The RTBA2 does not “make” you test for methamphetamine contamination, however, you must meet all relevant building health and safety standards as is outlined in the Residential Tenancies Act 1986 Section 45(1)(c).
Remember, you only suffer the consequences of the law if you break the law
Safe and Healthy Buildings
Before renting out a property, landlords must ensure it is lawful for residential use (Also see RTAB2 Section 45 on contaminated properties). If a landlord does not comply with their obligations under the Residential Tenancies Act (such as meeting building, health, and safety requirements) and the occupation of the rental property is subsequently deemed unlawful, the Tenancy Tribunal may decide that the property is an unlawful residential premises and rule in favour of the tenant/claimant. Remember, you only suffer the consequences of the law if you break the law.
More information about building, health and safety- related requirements is on the Tenancy website: www.tenancy.govt.nz or find more about lawful homes by following this link here.
A landlords duty of care in providing a safe and healthy home is obviously built on the proviso of using qualified companies to conduct the testing. One simply cannot carry out a test themselves on their own property or a property they have a financial interest in and then claim impartiality in this. The problem is that there are still many methamphetamine sampling companies misrepresenting themselves as qualified to conduct testing.
If a company or person conducts work that they are not qualified to carry out, they place the property owner amd their assets at risk
Misrepresentation When a company misrepresents themselves, for example claiming compliance with a New Zealand Standard when they do not hold relevant qualifications, is a clear example they are in breach of the Fair Trading Act 1986 Section 12a. That is, they have “engaged in conduct that is liable to mislead the public as to the nature, characteristics, suitability for a purpose, or quantity of services.” i.e they have advertised, or have on their websites that they are qualified to test, but they are not. The standards are very clear and will be legally enforceable with the RTBA2. NZQA Certified Samplers are only able to conduct screening assessments and that those screening assessments must comply with the New Zealand Standards if they wish to claim that their testing complies with the New Zealand Standards NZS8510:2017. If they state otherwise, they are misrepresenting themselves and are more than likely doing so in an effort to gain work that they are not qualified to carry out, thus placing the property owners assets at risk. Only IANZ Accredited Samplers are able to conduct Detailed Site Investigations, Pre and Post Decontamination Sampling. Only IANZ Accredited Sampling companies are able to authorise a clearance certificate for a Decontamination Company to issue for a property. Any company stating that they are able to carry out the above work that is not on the IANZ Directory page listed under the keyword “Methamphetamine” is not qualified to carry out the above work, nor authorise a clearance certificate and is misrepresenting themselves and placing the property owners assets at risk. So, not only are some companies still engaging in misleading, punishable practices, but the consequences for the home owners stretch even further that misrepresentation. If a property that has been cleared by an unqualified sampling company is later tested by a qualified company an contamination is located, the owner may have little recourse other than to take the unqualified sampling company to court. This all costs time and money. Their property, having not been cleaned to below the legal limit and having not been tested correctly by the company that misrepresented themselves, may now have to sit vacant for a time and, if not remediated, may be subject to a Cleansing Order from the local Council
Local councils to have policies on dangerous and unsanitary buildings
All Local councils have policies that ensure safe and healthy buildings. The Building Act 2004 requires local councils to have policies on dangerous and unsanitary buildings, such as methamphetamine contaminated buildings. This allows a council to take action against owners of such buildings.
Properties contaminated with methamphetamine above acceptable levels pose a health risk to occupants.
If the owner does not remediate the property within 20 working days they will issue a Cleansing Order
If the owner does not carry out the remediation of the property within 20 working days, they will issue a Closing Order which requires the property to be immediately vacated.
If the owner does not comply with a Closing Order they will commit an offence under the Health Act 1956 and they will start legal proceedings against the owner.
Without “Pre-Qual” a contractor is unable to carry out any contracted work for Barfoot and Thompson
Safety and the Workplace
Of note, is that if levels of methamphetamine contamination within a property are over the legal limit, any PCBU’s entering the property are required to wear Personal Protection Equipment (PPE). This letter from the Minister for Workplace Relations and Safety, the Hon Ian Less-Galloway, makes it clear that New Zealand Standards has not changed the level of 1.5ug/100cm2. This is the legal threshold for a PCBU to don suitable PPE in a methamphetamine contaminated environment.
Under the Health and Safety at Work Act 2015 (HSW Act), a landlord is classified as a person conducting a business or undertaking (PCBU) and the property is classified as a “workplace.” When a person, such as the landlord or Property Manager, is undertaking work there, they are in a “workplace.”
As with any other workplace, the PCBU is tasked with protecting the health and safety of its workers and anyone else influenced by the work being carried out. By way of example, if a landlord or property manager hire someone to undertake electrical repairs on the rental property, the landlord or property manager has an obligation to ensure that the contractor is suitably qualified to undertake the work. They must also ensure that they have health and safety systems in place to ensure that workers, tenants, or visitors to the property are not injured in connection with that work.
The letter from the Minister goes onto state “Essentially, if a PCBU cannot ensure the safety of workers doing the work because they are unsure what PPE to use then they should not be doing the work.”
A landlord or property manager who does not meet these obligations could face prosecution under the HSW Act, if someone is injured. Meth Xpert have seen many a property manager walk straight into a known contaminated property without any PPE where all others present have clearly been in appropriate PPE.
Barfoot and Thompson, an Auckland Real Estate Agency and Property Management Company, whom Meth Xpert work with, have recently put in place a qualification assessment for Health and Safety for all of their contractors. The process is called Pre-Qual (Pre-Qualification).
Without having passed the relevant checks and demonstrated application of the HSW Act in practice for their work, a contractor is unable to carry out any contracted work for Barfoot and Thompson as they have failed to prove their knowledge of the HSW Act.
Meth Xpert NZ applaud Barfoot and Thompson for this industry leading approach to Health and Safety in the work place, safe in the knowledge that their work is covered under the HSW Act.
Our advice is simple; take a step back from negligence
Our advice is simple; take a step back from negligence. Take a step back from those negligent property managers that would seek to increase their own pockets by placing your assets at risk by not conducting methamphetamine contamination sampling. By testing, you ensure you are meeting all obligations set out with the current standards and law. By continuing to test, you ensure that they are meeting all the requirements within your landlords insurance policy and once the RTAB2 is finally made law, you will be in good hands with your risk being well managed.
The last thing you need is a big surprise looming on the horizon with your first test after the law is passed. You won’t know who is responsible for the contamination, you will not be able to claim insurance and you may be struck with a large clean-up cost with no chance of getting it back without qualified proof.
The New Zealand Standard sets a minimum level where Health effects are not likely to be observed if under this threshold. This is designed to protect the most vulnerable in society, our children, our sick and our elderly. This is an intentionally precautionary level with adequate safety buffers which observes regulatory toxicology to ensure protection. The level may change with the coming RTAB2 law, but the intention behind it never will, which is that once a property exceeds the legal limit of contamination, it is a legal requirement to return it to a safe level in accordance with the Standard.
Note that this is precautionary advice. As with all advice you can take it on board, or dismiss it. However, for the sake of the minimal cost of qualified screening assessments, and the added risk of penalties and damage claims (against PCBU’s, landlords and property managers). Moving forward, we believe it would be negligent for anyone to suggest ignoring a published New Zealand Standard that complies with the Standards and Accreditation Act 2015 and has been in used by many jurisdictions and Government Departments since its publication.
The simple fact is that the only way to know if you have had use or manufacture of methamphetamine in your home is to have it tested by a fully qualified testing company.
If you want to know more about the upcoming new laws around Methamphetamine Testing, Meth Xpert NZ offer training to all our clients that is tailored to your needs. To find out more:
The level of 1.5μg/100cm2 in the Standards relates to manufacture and is derived from the Governments own Crown Research Institute: ESR (Institute of Environmental Sciences Research) 2016 report.
There is sure to be some heated debate amongst parliament about what level they will set for methamphetamine use given the then Chief Science Advisors report in mid 2018 by Peter Gluckman, that stated levels up to 15μg/100cm2 were safe as there had been no “reported” cases of illness arising from contamination.
There are two types of recognised qualifications in the industry. The first one is NZQA Certification. The second one, IANZ Accreditation
The terms Accreditation and Certification are often used interchangeably and occasionally together. Despite the obvious confusion this can cause, the difference between the two distinct quality management processes can be easily explained.
In effect, certification is the third-party endorsement of an individuals training, while accreditation is an internationally recognised independent third-party endorsement of a companies ongoing compliance with relevant standards. International Accreditation New Zealand (IANZ) is the government recognised accreditation body for New Zealand.
Its role is to assess organisations that are providing testing, inspection, calibration and certification services (collectively known as conformity assessment bodies) against internationally recognised standards. In New Zealand, if conformity assessment bodies are the watchmen, then IANZ watches the watchmen.
The simple fact is that the only way to know if you have had use or manufacture of methamphetamine in your home is to have it tested by a fully qualified testing company.
Some unqualified companies make statements such as “Independent Laboratory Testing IANZ Accredited.” They may make these statements to attempt to align themselves with IANZ Accredited Laboratories, however, it does not mean that the person conducting the sampling is qualified, only the scientist who analysed the samples at the laboratory is, which by law, they have to be.
Another one is "NZQA Accredited." NZQA Do not offer Accreditation, they offer Certification. Or "IANZ Certification." IANZ do not offer Certification, they offer Accreditation. If you are uncertain of the qualifications of the meth sampling company you are about to use, contact the Methamphetamine Testing Industry Association of New Zealand at their website here.
The matter has been adjourned and Meth Xpert NZ cannot comment on the matter as it is still before the courts, suffice to say that the tenant has a case.
The meth testing company that was used may not have been qualified to test. If so, there is no way to prove that the sampling was conducted complying the law and the New Zealand Standards NZS8510:2017.
Do not make the same mistake, only use NZQA Certified and IANZ Accredited Companies to conduct Screening Assessments, and only use IANZ Accredited Companies to conduct Detailed Site Assessments, Pre and Post Decontamination Assessments.
Despite having had over 18 months, So far only four methamphetamine sampling companies in New Zealand have attained IANZ Accreditation and Meth Xpert NZ Are very proud to be one of them.