ACT Ceiling Insulation Exemptions for Landlords: Grounds and Evidence

Exemptions Are Self-Assessed — That's the First Misconception

ACT landlords routinely search for an "insulation exemption application form." Under Section 11 of the Residential Tenancies Regulation 1998, the listed ceiling insulation exemptions are self-assessed. You compile evidence supporting the exemption, state it in advertising and provide the reason in writing before lease signing, then retain the records. The Minister may also determine additional exemption reasons. The regulation's separate $10,000 cost-cap rule is described below.

No approval from Access Canberra. No fee. No stamped certificate. But if a tenant or ACAT challenges your exemption, you need the documentation to hold up.

The Statutory Exemption Grounds

1. Structural reasons. Insulation cannot be safely installed in the required area because of a physical constraint, such as a roof cavity that is too small. Evidence: a written report from a licensed builder or electrician explaining the constraint.

2. The premises were not continuously tenanted during the relevant period. The relevant period depends on when the first tenancy agreement was entered into. Keep the tenancy dates that show the gap.

3. The tenant objects in writing. A tenant tells the lessor in writing that they do not want ceiling insulation installed. Keep the tenant's written notice.

4. A unit area is immediately below another unit. This applies to a required area in a building with two or more storeys. Evidence: the unit plan or other records showing the area is below another unit.

5. Owners Corporation confirmation for a top-floor unit. The unit must be on the top storey, and the Owners Corporation must confirm in writing that it intends to arrange insulation in the required area or refuses permission for the lessor to install it. Keep the written confirmation.

6. Heritage impact. The premises, or part of them, are registered under the Heritage Act 2004, and installing insulation would or would likely have a significant adverse impact on their heritage significance. Keep the heritage record and evidence of the likely impact.

7. Planned demolition. Before signing the tenancy agreement, the lessor tells the tenant in writing that all or a substantial part of the premises will be demolished within two years. The lessor must also keep a signed statutory declaration stating this intention.

8. Former owner as tenant. The tenancy agreement is for a fixed term of 12 months or less, and the tenant is the former owner of the premises. Keep the agreement and records showing the former ownership.

The $10,000 Cost-Cap Rule Is Separate

Under Section 10(3) of the Regulation, if the cost of complying with the required insulation work is likely to be more than $10,000, the lessor is treated as complying if, by the required date, the work is done in as many designated rooms as possible for $10,000. The cost includes required electrical work and other work needed for safe, effective insulation installation, but excludes maintenance work needed whether or not insulation is installed. Keep the quotes from a licensed electrician and approved installer showing the likely cost.

Disclosure Is Not Optional

Claiming an exemption doesn't mean you stay silent about insulation. Every rental advertisement must explicitly state that the property holds a ceiling insulation exemption and the reason. Before lease signing, the prospective tenant must receive a written exemption notice.

Omitting the exemption disclosure from advertising is a strict liability offence carrying up to five penalty units ($800 for individuals, $4,050 for corporations).

Statutory Declaration vs. Trade Report

For the cost-cap rule, the Regulation requires records showing the likely cost, including a quote from a licensed electrician and an approved installer. Keep invoices and a record of the rooms insulated as well.

For physical infeasibility, a licensed professional's written finding supports the exemption. For a planned demolition exemption, the lessor must keep the signed statutory declaration.

Either way, retain all documentation for at least 12 months after the tenancy ends, as required by Section 19C of the Act.

Getting the Evidence Right

The ACT Rental Minimum Standards Guide includes an insulation decision flowchart that walks through each exemption ground, the evidence you need, and how to document it for advertising and lease disclosure — so you're covered if a tenant escalates to ACAT.

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