Residential Tenancies Amendment Bill — Third Reading 
Residential Tenancies Amendment Bill — Third Reading 
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Residential Tenancies Amendment Bill 
Third Reading 
Debate resumed from 22 June. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 I am happy to make a contribution to the debate on the Residential Tenancies Amendment Bill. My parents uncles and aunts belong to a generation who in the late 1960s and early 1970s were able to purchase their first three or four-bedroom homes in working-class suburbs such as Grey Lynn and Ponsonby and later Otara Otahuhu Mangere and Papatoetoe. The cost was roughly $9000 to $15000 per house. They were able to do that while they worked in the factories that lined the streets of Penrose Mount Wellington and Ellerslie and in the freezing works in Otahuhu. 
There was support from Housing New Zealand loans which at that time charged interest of 3 percent per annum for a 30-year mortgage which is similar to USA mortgages today—not the 8 percent that banks charge today for 3 to 5 years. Today homeownership is almost an impossible goal for many families and I suspect that some members here such as the Hon George Hawkins Ross Robertson and others in similar communities will feel the struggle that families are encountering. 
That same three-bedroom house in Mangere is today valued at about $300000 to $400000. A family would need to be earning about $124000 a year to make weekly mortgage payments of about $500 or $600 per week in order to maintain such a mortgage. In a working-class community such as Mangere where the median income is about $20600 per year and where 81 percent of the population earn less than $40000 a year owning their own home is perhaps one of the biggest challenges that those working families now face. Many of those families will be for ever bound to the hip of a landlord. Statistics show that renters number about 1 million and that number is rising. 
Having a house is a basic human right. It is a basic human right to have a roof over one’s head and to have shelter for one’s family. But economic circumstances low-wage rates high unemployment—particularly under this Government—the increasing cost of living an increase in GST and a lack of educational opportunities due to funding cuts mean that many families in these working-class communities do not have control over their economic circumstances and therefore have no control over securing this basic human right for themselves and their families. 
It does not help that the National Government has decided to axe the Housing New Zealand Corporation’s shared equity scheme a move that my colleague and Opposition spokesperson on housing Moana Mackey has called short-sighted. It seems that the Government will stop funding the shared equity scheme from 1 July—tomorrow. Shared equity is an important part of the housing affordability mix in many other countries. Minister Heatley promised before the 2008 election that he would continue with shared equity at least until his long-awaited Gateway Housing initiative was available but Budget 2010 contained no funding for this so-far mythical scheme. 
The bill on the Table amends the Residential Tenancies Act 1986 and other legislation to adopt into law the significant changes in the structure and dynamics of the residential rental market that have taken place since the Act came into force. The fact is that the number of people living in rental housing has increased and there has been a corresponding decline in homeownership rates. The aim of this particular legislation is to encourage the development of a rental market that provides stable quality housing to those who rent their homes to enable landlords to manage their properties more effectively and to clarify and appropriately balance the rights and obligations of tenants and landlords. 
I acknowledge the fact that this work began under my colleague Maryan Street a former Minister of Housing. Labour welcomes the much-needed updating of our residential tenancy laws but we believe that this bill is also a missed opportunity for the Government to fairly protect the interests of the more than 1 million tenants in New Zealand. People who are long-term renters want stability and certainty in their lives and they want the ability to put down some roots. This is important for our communities especially for families so that children do not have to be moved from school to school. Having long-term reliable tenants is also important for property owners who want their investment looked after. 
Although Labour supports much of this bill which was introduced under the previous Labour Government we have concerns about some of the changes made to it by this National Government. These concerns were raised by submitters during the select committee process and they are reflected in Labour’s minority report. 
The first concern I raise is the termination of a tenancy for the provision of short-term accommodation for major events. Labour is disappointed that the National Government voted down an amendment that would have prevented tenants from being evicted from their homes so that landlords can rent the properties out during major events. Moana Mackey’s amendment would have prevented the eviction of a tenant from any rental property including a boarding house for the purpose of making a quick buck by providing short-term accommodation during major events such as the Rugby World Cup. 
Earlier this year boarding-house tenants were evicted en masse so that their rooms could be used during the Wellington Sevens. This put enormous pressure on social services and emergency accommodation providers who struggled to cope with the displaced and vulnerable people. There is already concern in Auckland that the same thing will happen next year during the Rugby World Cup especially with hotels charging such high prices. My colleague Moana Mackey spoke to the Minister months ago and alerted him to this issue. He chose to do nothing about it himself and then voted against Labour’s attempt to rectify the problem. 
Another area of concern is cleansing orders. The Government removed the requirement for landlords to disclose to tenants the fact that a cleansing order has been issued for a property. The Government said that there is already a legal requirement for cleansing orders—for example on a house used to manufacture methamphetamine—to be listed on the land information memorandum report and that the report can be accessed by the potential tenant. It said that the Tenancy Tribunal considers the letting of contaminated houses to be a breach of the principal Act. 
However the reality of this change is that it places the onus on the tenant. The tenant is the one who will have to access the land information memorandum report for a property he or she may wish to lease on the off-chance that it may have been contaminated by the manufacture of P. That is unrealistic especially given the cost of obtaining a land information memorandum report which can be several hundred dollars. Also questions still exist about the consistency of council practices when it comes to cleansing orders and their attachment to land information memorandum reports. 
Given these concerns we feel that the protection of tenants should be paramount and the clause should be reinstated. Unfortunately this Government voted it down. Labour wanted to limit the requirement to disclose cleansing orders to those imposed in the last 5 years. The original bill did not impose a time limit. 
Something that is of concern to me is the requirement for key money. Labour’s proposal to prohibit the collection of key money would have removed a significant upfront financial barrier to some tenants who are trying to find private sector accommodation. It would have reduced the need for benefit advances to cover letting fees and it would have eased the pressure on social housing from those who cannot afford the upfront costs of a bond advance rent and the letting fee. 
Currently the cost of renting a three-bedroom home in Mangere would be about $350 a week—if one was lucky. Landlords want 4 weeks’ rent as a bond plus the first week’s rent in advance plus a letting fee of $350. To move in a family would need to front up with about $2100. These are families who earn less than $40000 a year and they spend all they earn just to pay the bills. Families will end up using loan sharks in desperation to find appropriate accommodation. For that reason I believe along with my colleagues that this bill was another missed opportunity for the Government to right this wrong. 
I say in conclusion that although Labour members support the clarification of the rights and obligations of landlords and tenants and the general updating of tenancy laws we say that the Government has missed an opportunity to adequately protect the 1 million families who rent. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker. Speaking as a member who is a tenant and a renter I am happy to take this call on the Residential Tenancies Amendment Bill which modernises the Residential Tenancies Act. This bill is better than the status quo and that is why the Greens will be voting in support of it tonight. However we lament the missed opportunities to increase the rights for the more than 1 million tenants in New Zealand including those in non-traditional housing environments. Tonight I will raise the issue of those who live in cold damp and unhealthy homes. 
We support many of the minor changes in this bill to clarify existing law and to broaden it out to reflect the significant changes that have occurred since the legislation was first introduced in this House in 1986. Since 1986 the proportion of New Zealanders who rent their homes has gone up. More young people are flatting away from home and a larger number of older people with children and families are choosing to rent. 
Tonight while we discuss the law around tenancies I would like to discuss where people are living. By First World standards the standard of our housing stock is appalling. According to a recent study commissioned by the Business Council for Sustainable Development New Zealand has around 1 million inadequately insulated homes. Too many of our homes are cold and damp. It is no wonder that we have disproportionately higher rates of asthma and other respiratory diseases. While we are talking books tonight I would like to “book-drop” Philippa Howden-Chapman’s new book  
Do Damp and Mould Matter? Health Impacts of Leaky Homes 
 which documents the extreme health impacts of our poor housing. 
On top of health issues our inefficient housing leads to excessive power consumption higher than necessary heating bills for many households and a huge amount of householders who are living in energy poverty which plays a part in New Zealand’s increasing greenhouse gas emissions. We have around 450000 rental properties that house a third of our population and generally those are the coldest and least efficient of our nation’s housing stock. Lower socioeconomic groups and young people are disproportionately affected by substandard rental properties. Many young people have no choice but to pay exorbitant rents in exchange for housing that is cold damp inefficient and expensive to heat. 
The Green Party has achieved a lot with this Government and the previous Labour Government and the current scheme aims to retrofit 188000 Kiwis’ homes with ceiling and underfloor insulation and to provide them with access to clean-heating devices over 4 years. However when we look at the rental market we see that the uptake has been only about 10 percent of this scheme for rental properties. At this rate it will take decades to bring all of our rental properties up to an acceptably healthy level. So tonight while we think about tenancy law let us also think holistically about where our people are tenants. 
In looking at this bill the Green Party believes that it is important to strike the right balance between the rights of landlords and the rights of tenants. In my second reading speech I looked at a few of the issues that the Greens had with this bill such as the termination issue in respect of boarding-house tenants. The security of tenure issue for boarding-house residents which we had concerns about at earlier stages was improved somewhat in the Social Services Committee but not to the extent that we would have liked. Another issue was the charging of letting fees. The Green Party would have supported a prohibition on the charging of letting fees to tenants. 
We lament the unfortunate oversight of the bill’s not addressing the termination of a residential tenancy following the death of a tenant. When we look at legal representation issues we see that this continues the currently unfair provision that permits corporate landlords to otherwise be represented by an experienced tenancy manager while tenants who often know little about tenancy law and may well have English as a second language are forced to represent themselves. Boarding-house residents have been waiting a long time for legislation that will extend their rights and current protections. However there is another sector in New Zealand that is currently unprotected. We could have been extending protection to those who reside in non-traditional housing forms such as caravan parks and backpacker lodges 
Everyone in New Zealand deserves a fair go but this bill failed to address the fact of life that in New Zealand in 2010 many thousands of Kiwis are not formal tenants they do not live in boarding houses and they suffer for want of normal tenancy rights. It is a good example of where the updating of this old 1980s Act was good and necessary but this bill has not gone far enough to reflect the real facts on the ground. 
Lastly it was a pity that the amendment put up by the Labour member Moana Mackey in respect of major events did not pass. This is a major concern given that one of the world’s biggest sporting events is coming to our shores next year—the Rugby World Cup. We will see people in boarding houses and flats kicked out of their homes so that landlords can make a quick buck. 
In summary the main criticisms of this bill at its first reading were in relation to issues that it did not adequately address. Following the Social Services Committee’s consideration of the bill some positive and some negative changes were made but from our point of view and on balance the Green Party still supports voting for this bill. Kia ora. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Kia ora Mr Assistant Speaker. 
David Garrett 
: This will be good. 
HONE HARAWIRA 
: No this will not be good; this is just a short call on the Residential Tenancies Amendment Bill. The Maori Party supports legislation that encourages a stable market for people renting houses that will help landlords manage their properties better and that will help balance the rights of both tenants and landlords. But I would like to raise a few points here like the difference in rental tenancy levels for Maori at 67 percent and for non-Maori at 44 percent and the fact that of all New Zealanders who own their own homes only 7 percent are Maori. A report entitled  
Maori Housing Experiences: Emerging Trends and Issues 
 by Charles Waldegrave Peter King Tangihaere Walker and Eljon Fitzgerald tells us to no one’s great surprise that Maori face greater challenges in getting rental accommodation including supply quality pricing and variation in landlord practices. They also pointed out that Maori often accept sub-standard housing and even rogue landlords if it means they can stay closer to whanau. So knowing all these things—high rental levels low ownership rates challenges in getting decent accommodation and rogue landlords—to be true this bill is important for Maori. 
We take on board some of the comments raised by in particular my colleague from Labour Su’a William Sio about issues of people being evicted for events. We also note concerns raised by the Coalition to End Homelessness who said that although they liked the idea that the bill promotes the improvement in the standard of boarding houses unless support was available to help upgrade some of those boarding houses many of them would simply close thus bringing about an unintended housing crisis. That raised concerns about the fact that this bill should perhaps have been extended to cover caravan parks given that these days they are often used for long-term accommodation as well. We also thought that the termination of boarding-house tenancies because of just 1-week’s arrears was a bit tough given that it is usually 3 weeks everywhere else but overall we were comfortable enough with the general thrust of the bill to give it our support. Kia ora tatou. 
TODD McCLAY (National—Rotorua) 
: 
 It gives me pleasure to rise and speak on the Residential Tenancies Amendment Bill this evening. The bill changes legislation that has been in force since 1986. Since that time we find that one-third of New Zealand households now live in rental accommodation. Indeed private rental housing is having a bigger impact on New Zealand’s social and economic outcomes than it did in 1986 when the Residential Tenancies Act came into force. 
I have an appreciation of both sides of this debate. Last weekend I was a tenant but with my family I have moved into homeownership. I am reliably informed that my wife is at home at the moment unpacking boxes—at least if the programme  
Desperate Housewives 
 is no longer on she will be unpacking them. I appreciate the need— 
Stuart Nash 
: You’re in trouble mate. I would stay in Wellington for the week. 
Dr Rajen Prasad 
: Too much information! 
TODD McCLAY 
:  
Hansard 
 will note that members opposite are interjecting. I know that those members tune in to  
Desperate Housewives 
 in their offices most nights of the week. 
I therefore have an appreciation of the challenges that tenants face and the uncertainty there can be if one has an unscrupulous landlord. But at the same time I believe that those who own properties view them in many cases not as a business but as their own homes and they too have rights as well as obligations. 
The reforms that this bill brings to the House tonight are long overdue. I believe that the Social Services Committee worked very well on this bill. We sought to balance the rights and obligations of the tenant with the rights and obligations of the landlord. I thank the very hard-working Minister of Housing Phil Heatley for the work that he has done in this term of Parliament in bringing this bill to the stage that it is. I also recognise that the previous Government introduced this legislation to the House and that it is to be completed in this term of Parliament. 
To my colleagues on this side of the House and to members opposite I say that I believe that the Social Services Committee members worked very well together. We shared concern in most areas that have been raised in the debate so far and certainly the concerns that many submitters had particularly tenants and their advocates. I think where we differed sometimes was only in the approach by which we would fix some of these issues and concerns. Generally the committee worked very well together and we had a lot of very good submissions that I think all members learnt from. 
The bill does a number of things; I will touch on them just briefly and then go into one area in a little more detail. This bill extends the coverage of the Residential Tenancies Act quite substantially. It clarifies a number of issues that submitters were concerned with particularly the responsibility of outgoings such as rates and water and exactly who should be responsible for those and in what conditions their responsibilities should be met. It also provides for new processes for terminating or renewing tenancy agreements. That is very important because—as I think a previous speaker opposite said—when somebody lives in a home whether or not they own it they want a certain amount of security. The bill goes a long way to providing that security for tenants. It encourages landlords and tenants to comply more fully with their obligations. It provides for the majority of tenancy disputes to be resolved more quickly fairly and cost-effectively. I think that is important for tenants but also for landlords. The bill improves the enforceability of Tenancy Tribunal orders. It enables steps to be taken in the case of unclaimed or uncollected bonds and for them to be refunded. It also deals with the issue of abandoned goods. 
The select committee received a number of submissions both from landlords and from tenants on this issue. The law as it stands states that if a tenant leaves a property and leaves behind goods depending upon the value of those goods the landlord has an obligation to store them at his or her own cost in some cases for an extended period of time. We realised in the committee that we needed to be very careful as goods are not abandoned in all cases yet the current law does not distinguish between those that are left to be collected and those that are merely abandoned when a tenant leaves under whatever circumstance. So what the committee did and certainly what this bill does is to continue the obligation upon landlords to act responsibly but to reduce some of the burden upon them and the extent of the periods of time when they might need to store those goods. That means that the storage of those goods would not always be at their cost. I think that that is a more balanced approach that means that landlords will need to act more responsibly but not at their full cost. 
I mention one submitter Richard Evans of Rotorua Rentals. He submitted and appeared before the committee. Mr Evans travelled to Wellington to provide information to us. Rotorua Rentals manages 800 properties in Rotorua. It is an extremely professional company. The experience that Mr Evans brought to the committee was extremely useful I believe. 
That just leaves me to thank the committee staff for their work the officials the experts from the Ministry of Housing and all submitters on this bill. They made it easier for the whole select committee to get to the position where the legislation before us now will do a great deal of good will provide greater protection to tenants but most important will provide a greater certainty to landlords and homeowners. I commend this bill to the House. Thank you. 
Dr RAJEN PRASAD (Labour) 
: 
 I will take a short call on the Residential Tenancies Amendment Bill. In doing so I add my voice to that of Mr McClay who acknowledged the work of the officials. I agree with Mr McClay that the Social Services Committee worked very well indeed and I include the work of Katrina Shanks who chairs that committee in an excellent fashion as well. 
I add my congratulations to one other member and that is Moana Mackey. I really believe that Moana Mackey my colleague is the leading light in this House when it comes to housing matters. She really is the leading light in this House in the demonstration of her understanding of housing and her understanding of the needs of tenants. She has consistently advocated for tenants and for the 30 percent of New Zealanders who live in rented accommodation. She has particularly brought to the House the voices of those who earn modest sums of money and who earn less than $50000. I congratulate her on her work throughout all stages of this bill and say that her advocacy her clarity of thought and her consistency were something to behold. If I were the Minister of Housing I would be very worried. I would watch very carefully how this member develops in terms of her advocacy for housing. The other point I make is simply to acknowledge that this side of the House the Labour Party supports the bill; its birth came from this side of the House. 
The bill modernises and brings into the 21st century the Residential Tenancies Act 1986 and makes a number of very important and valuable contributions. However there really is a missed opportunity here that I will comment on. I do not think that the bill achieves its third aim which is to clarify and appropriately balance tenant and landlord rights. When I spoke in the first reading I said that I would be looking throughout the various stages of the bill to see how the competing needs and interests of landlord and investor were married up with the needs of tenants and their ability to pay. Throughout the process I have participated in I have been trying to see whether that balance is right. At times it has been very elusive. We have not been able to see where the balance is in some of the matters. Indeed those matters are very well reflected in the amendments that members on this side of the House put forward. I think those amendments were very important and it is a shame that the Government was not driven to see their merits. 
When it comes to cleansing orders what was the harm in giving to tenants a very easy way of understanding whether a particular house had a cleansing order? Why was it necessary for this bill to place the onus on the tenant to go and get a land information memorandum in order to find that out? That balance is missing. The provisions regarding key money are imbalanced as well. Why did members on the other side not propose an amendment that charged the purchaser of a house to pay the land agent’s fees? For tenants there is a very different set of requirements. That is not balanced either. When it comes to the increasing of the limits before a tenant can be represented at the Tenancy Tribunal there is a lack of balance and we do not see why that is. 
We can go through and identify a number of those imbalances but I put before this House one particular matter that has not been debated to any extent and that comes from— 
Hone Harawira 
: You’d better hurry. 
Dr RAJEN PRASAD 
: —I have a minute—those who are living in boarding houses. From now on there is an authority for boarding-house tenants to be evicted at 24 hours’ notice. Many of them are mental health patients and I hope that regulations will be developed to ask the landlords of boarding houses to make services available to ensure that those who have mental health needs have those needs met or that they are pointed in the right direction to receive the services they require. That might simply mean having available the information about where to refer those people to before somebody is evicted from a boarding house. Many of those people are mental health patients with particular needs. 
Debate interrupted.