Nov 14, 2017 12:33:54 PM

Meth testing your rental property

Topics: Buying, Mortgage, new zealand real estate, meth testing, meth contamination 0

There’s been much discussion in the media recently around methamphetamine contamination in New Zealand. Tenants are being evicted and landlords are spending thousands of dollars decontaminating properties that test positive for “P”. While some scientists have questioned the government’s standard for meth contamination, many believe it’s vital in helping safeguard the value of properties and its tenants. Either way, as a landlord in New Zealand, it’s important you understand meth contamination.

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A substantial industry

Try searching online for information on meth testing in New Zealand, and you’ll find a myriad of companies providing this service. In fact, meth testing and meth decontamination is a substantial and lucrative industry in New Zealand.

Over the past two years (2016 – 2017), Housing New Zealand has spent nearly $73 million on meth testing and decontamination in state housing around the country – an amount which would have bought more than 100 Wellington homes and for which HNZ has recently been criticized in the media.

In July 2017, a new standard for methamphetamine contamination testing was announced to provide clarity over whether a house is safe to live in or not. The most significant change was the 1.5μg/100cm2 limit, compared with 0.5μg/100cm2 under the old guidelines. While some drug experts have questioned the government’s new standard - expressing scepticism over the health risk from houses in which meth has been smoked rather than manufactured - others believe a “safe rather than sorry” approach will save both properties and lives.

While the debate continues around what the safe level for human meth contamination is, insurance claims for meth contamination are on the rise with many insurers now capping meth damage. In March 2017, IAG reported meth related claims had increased to 50 a month compared to just 10 a month for the same time last year.

Meth testing protocol

To protect yourself as a landlord in New Zealand, it’s imperative you understand meth testing protocol.

  • Meth test before renting: Before renting your property out, you must ensure it is free from meth contamination. Both landlord and tenants must check for any signs of “P” before the property is rented. If the property is rented out and found to be contaminated, the landlord will be guilty of breaching their obligations under the Residential Tenancies Act 1986, as well as other legislation including the Building Act and the Health Act.
  • Meth test between tenancies: Every time an existing tenant moves on, meth test your property. That way you’ll have an accurate timeframe of any contamination, and test results can be used as evidence with compensation claims from tenants responsible for the damage.
  • Minimise your risk: Failing to meth test between tenancies could leave you with a sizeable bill should your property test positive at any time in the future as you’ll have no recourse with existing tenants. Furthermore, if your tenant commissions their own meth test and you don’t have proof that the property is meth-free, you could be liable for any damages they claim.
  • Determining responsibility: By meth testing before each new tenancy, you place yourself in a stronger position should test results come back positive. Even if test levels indicate a result below the 1.5 safe level, the Tenancy Tribunal may determine that the tenant is responsible for the cost of cleaning the property.

Protect your investment

For most investors, your rental property is your most valuable asset, so it’s important you protect that investment with regular meth testing. If you’d like advice on buying a rental property and the pitfalls you need to look out for, talk to one of our advisers today.

References:

https://propertyblogs.co.nz/2017/10/what-landlords-must-know-about-meth-testing/

https://www.stuff.co.nz/dominion-post/news/97845365/taxpayers-shell-out-73m-to-fix-methcontaminated-state-homes

https://www.stuff.co.nz/business/money/97313073/landlords-to-meth-tester-weve-got-this-covered

https://www.tenancy.govt.nz/starting-a-tenancy/renting-affected-properties/renting-a-property-affected-by-methamphetamine-p/


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