Methamphetamine contamination (or the potential for it) is a serious risk for purchasers, landlords and property owners. A primary risk is for legal liability between tenant & owner/manager and the secondary risk diminution in value of the property if/when contamination is realized. Any budding purchaser should acknowledge these risks in residential property while caveat emptor (buyer beware) continues to apply to properties.
Standards New Zealand has recently released NZS 8510 that enshrines industry practice in relation to testing, meth cleaning, and decontamination. Notably this is not legislation but is a standard capable of enforcement on behalf of the insurance industry (who sign the majority of cheques for contamination damage) or by legislative adoption (such as the newly introduced Residential Tenancies Bill). Methamphetamine risks to health are well documented, and this comes alongside a slew of guidelines & legislation aimed at healthy living for all New Zealanders. The industry has been plagued by a lack of certainty as to which levels are “safe” for all and the standards are applauded for providing certainty in that respect.
Regardless of the new standards, there is still scope for advantageous tenants to use a contamination situation to their advantage. There are documented cases of tenants successfully seeking relief at the Tribunal for contaminated contents and back-paid rental on the assumption that the contaminated property has been provided in breach of the act (itself an unlawful act). The landlord/manager is left with the evidential burden to prove otherwise. This is despite the possibility that the contamination may have occurred during the tenancy. Thus a compliant baseline test undertaken at the outset of any tenancy (and the disclosure of which) is a crucial piece of artillery for any manager/landlord.
The steps below will help to prevent contamination risk, and if it does occur – strategies to mitigate decontamination cost and ensure insurance will cover the risk.
Contamination Prevention: Proper Management
a. Step one to preventing contamination risk is proper vetting and checking of tenants in accordance with acceptable practices, keeping in mind the insurance policy applicable for the rental.
b. Assuming this is adequately followed, the manager/landlord will know as soon as the property has a contamination issue.
c. Furthermore, the tenant will not be able to question when the contamination occurred if the pre-tenancy meth check is disclosed at the outset of the tenancy (keep copies).
d. A baseline screen test is thus a very important and worthwhile cost and may save you thousands in the long run (make sure it is IANZ lab-certified).
Damage Mitigation: Knowledge of Cap
a. Despite the above prevention methods, contamination damage may occur. Ensure that the validation is from an accredited tester who reports with an IANZ accredited lab.
b. In most tenancy situations if proper management obligations & any other insurance policy obligations are followed, insurance will cover the damage, however, remediation is likely to be capped with an excess payable.
c. Importantly, the cap (less excess) will apply to all phases of the contamination (below) and incentivizes an efficient meth cleaning and decontamination without damage.
Efficient meth cleaning and Decontamination: Guarantee, Time, Cost.
a. Prior to the regulation touted by the new standards, the meth cleaning and decontamination industry was plagued by a variety of contractors using a range of practices. The standards have helped to give certainty on the process.
b. Ensure that your contractor follows the standards and is approved by your insurer (if your claim is accepted), and it helps if they guarantee the property will be below the levels, a set timeframe will be met (to provide certainty to all parties), and that the cost is affordable. Check whether there will be any post-cleaning damage to account for.
c. Also, ensure that your contractor does not undertake their testing (unless it is presumptive) and that the property is vetted by an independent tester as referred above.
d. Taken together, the post meth cleaning and decontamination report and the independent testing should be sufficient evidence for any agent, tenant, and potential purchaser that the house is clean from a certain date.