Into the meth testing void

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Uncertainty over meth testing and remediation of contaminated properties is prompting landlords to consider out-of-the-box measures as they wait for the relevant new standard to be completed.

Wednesday, September 7th 2016, 3:00PM 1 Comment

by Miriam Bell

As public concern about meth contamination of properties continues to grow, it is landlords who are bearing the financial brunt of the panic.

A recent Tenancy Tribunal decision made it clear that, in the Tribunal’s view, landlords who rent their properties out without meth testing before the tenancy are taking a big risk.

But the costs involved with testing before each new tenancy can be significant – particularly if any level of contamination is detected.

On top of testing costs, there are the remediation costs for a property if it is deemed necessary due to contamination and these costs can vary hugely.

For many landlords these costs are problematic – especially as many testing companies are said to recommend full decontamination of properties even when the meth levels detected are low.

Probably as a result, new Crockers research shows that 53% of investors surveyed would not be prepared to pay for ongoing meth testing on their existing properties.

Further, only 16% of investors said they would be prepared to pay for a test at least every 12 months, while just 3% would be willing to pay for a test every six months.

The confused and emotional environment is prompting some out-of-the-box thinking from landlords seeking to navigate the potentially high costs and the resulting pressure.

Auckland Property Investors Association vice president Peter Lewis has suggested that landlords should be allowed to carry out meth testing on their own properties, with the results recognised in tenancy rulings.

Another suggestion came from a landlords.co.nz reader who wanted to include a provision in their tenancy agreements addressing the issue.

The provision would state the tenant was responsible for all costs relating to the detection of meth or other drugs which required remediation of the property at the end of the tenancy.

The reader wanted to know if such a provision would have legal standing.

Auckland District Law Society vice-president Joanna Pidgeon said she thought such a provision would have legal standing - assuming the property had been tested prior to the tenancy.

“This is because the tenant would be agreeing to take responsibility for the damage caused, subject to insurance provisions. But it would have to be agreed on by both parties in the tenancy agreement.

“If there is drug-related damage to the property where a tenant has signed such an agreement, it would probably cover it, but it is an evidentiary issue.”

In her view, landlords should always get their property tested before renting it out to establish a baseline of the state of the property at the start of a tenancy.

It is also key that landlords keep tabs on the condition of the property throughout the tenancy, she said.

“Landlords should put in the tenancy agreement that they have the right to do testing during the tenancy because if they don’t they can’t – even if there is suspicious activity.”

Pidgeon said it was a grey area at the moment as those involved in property wait for the new testing and remediation standards to be developed.

“Until those standards are in place, it’s an area of confusion. If landlords are in doubt about anything, they should always include it in the tenancy agreement.”

However, Auckland Property Investors Association president Andrew Bruce was not convinced that a provision requiring tenants to take responsibility for the clean-up costs to come out of drug damage would do much good.

He said the provision might have some standing, but the reality is that if there was $20,000 worth of damage most tenants couldn’t afford to pay for it.

“So you could win the battle, but not the war. If someone doesn’t have the money, then you are not going to get paid – whether there is a decision in your favour or not.”

It was the money and time costs involved with testing and, potentially, remediation that remain the problem.

For this reason, Bruce was supportive of Lewis’s suggestion.

“The key thing is you have to figure out what the appropriate level is. Is it 0.5? If not, what is it?” he said.

“And, once that has been clarified, what happens if the property is over that level? What is the situation around decontamination? When should it be done?”

Bruce is concerned that landlords whose properties return some level of contamination when tested are then being pressured into spending thousands on remediation when they don’t really have to.

There was a big difference between a property that has been used as a clandestine meth lab and a property where people have used the drug, as toxicologist Dr Nick Kim has said publicly, he said.

“It’s all up in the air really. There is just so much emotion involved.”

Ideally, the issues will be resolved by the Standards Committee and the standard which comes out of the whole process, Bruce added.

“I’m not hopeful due to the fact the majority of those on the Committee come from the testing industry.

“But there needs to be a separation between the testing companies and the remediation companies at the least. Otherwise, they have vested interests in the results.”

Meanwhile, the Standards Committee recently held its third meeting and has completed a first working draft of the new standard.

Several further meetings are planned and when all recommendations have been incorporated into the draft standard, it will be made available for public comment for two months.

The new standard is expected to be ready by early next year.

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