ACT's new minimum energy efficiency standards for rental homes
10
May

ACT's new minimum energy efficiency standards for rental homes

While managing your property, one of the benefits of partnering with an experienced real estate agency, such as Maloney’s Property, is that you stay on top of changes to the Residential Tenancies Act 1997. One such change is the new minimum energy efficiency standard for ceiling insulation that occurred on 1 April 2023.

So, what does this mean for the owners of Canberra rental properties?

According to Maloney’s Property, property owners must be aware of the changes and comply with the new regulations. 

“Landlords will have nine months after the signing of a new lease, until the end of November 2026, to comply with the standard,” Peter Maloney, Founder and Principal at Maloney’s Property, explained.

This doesn’t mean you don’t have to do anything until you sign a new lease for your property. 

Peter said that the new regulations require landlords to indicate whether their property meets the new minimum standard in any rental advertisements or lease agreements.

“If your lease doesn’t get renewed by 30 November 2026, you will be required to comply by that date – and properties entering the Canberra rental market after that date will be required to comply within three months,” Peter said.

Why is the ACT Government regulating to improve ceiling insulation in rental properties?

According to the ACT Government Justice and Community Safety Directorate, up to 35 per cent of heat is lost through the ceiling in an uninsulated Canberra house in the colder months.

The Directorate states, "Installing effective insulation in houses reduces the amount of warmth escaping in winter and the amount of heat entering in summer. This ensures that houses are more comfortable, reducing heating and cooling bills and helping to reduce greenhouse gas emissions."

“The new regulation requires residential rental properties in the Canberra property market to have a minimum R-value (Thermal Resistance) of R5,” Peter stated.

How do you comply with the new regulations?

The ACT Government says evidence of compliance could include:

  • a receipt for insulation installation services that include the R-value of the ceiling insulation,
  • an inspection report from an insulation installer,
  • an Energy Efficiency Rating report from a building assessor,
  • if the property was built after 1997 (when R3 insulation became standard in new homes), a statutory declaration that the existing insulation has not been disturbed, or
  • a statutory declaration that ceiling insulation with an R-value of R2 or more has been installed.

What are the consequences if your property doesn’t meet the new standard?

According to the ACT Government:

In addition to the requirements of the minimum energy efficiency standard regulation, under the Residential Tenancies Act 1997 (the Act), it is an offence if property owners:

  • fail to disclose if their property complies with, or is exempt from, the minimum standard in a rental advertisement for the property, or
  • make a false or misleading statement in rental advertisements about a key aspect of the property’s compliance with the minimum standard. 

A penalty of up to $800 for individuals or up to $4,050 for corporations may apply. 

Under the Act, tenants will also be able to apply to the ACT Civil & Administrative Tribunal (ACAT) for dispute resolution in circumstances where: 

  • a claim that the property meets the standard is disputed,
  • an exemption is found to be based on a false or misleading statement, or
  • the property does not comply with the minimum standard within the designated period. ACAT may make orders for a rent reduction, financial compensation and/or to terminate the tenancy.

Maloney’s Property understands that for some property owners, there may be significant costs involved in complying with the new regulations for ceiling insulation.

“There are a number of programs landlords may be able to access to assist with upfront costs of complying with the new regulations,” Peter shared.

These include the following: 

If you would like to find out more about how a property manager from Maloney’s Property can work with you to manage your investment property, contact us to make an appointment.
 

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