Faafoi Kris; Rurawhe AdrianRESIDENTIAL TENANCIES AMENDMENT BILL (NO 2)Third ReadingHon KRIS FAAFOI (Associate Minister of Housing (Public Housing)): I move That the Residential Tenancies Amendment Bill (No 2) be now read a third time. This bill was originally introduced to Parliament in April of 2017 and was referred to the Governance and Administration Committee for consideration when Parliament resumed in this term. In Opposition Labour supported this bill at first reading because we considered that it had enough worthy in it to consider supporting this bill but as my colleague Minister Phil Twyford said at the time so much more needed to be done in housing and the rental market to address the housing crisis that existed but we're very happy to take it on board and go further as we now have the Treasury benches. And that is what the current coalition Government has been doing. We have an ambitious and comprehensive plan for reform in the tenancy space. [Interruption] You may recognise some of that language. We've set up a new Ministry of Housing and Urban Development to lead our country out of the national housing crisis and to restore the basic right of healthy affordable housing for all New Zealanders. We're also reforming the Residential Tenancies Act—this bill being part of that—to modernise tenancy laws so that tenants can feel secure and at home in rental properties while protecting the rights and interests of landlords. We are also introducing standards which set minimum requirements for heating insulation ventilation moisture ingress and drainage and draught-stopping in residential properties to improve the quality of rental properties so quite simply that they are warm dry and healthy—and a measure taken today by my colleague David Parker was finally some reform of the Resource Management Act.I want to now turn to the bill at hand: the Residential Tenancies Amendment Bill (No 2). The bill amends the Residential Tenancies Act 1986 and there are three aims of this piece of legislation before the House: firstly to clarify the law in terms of tenant liability for damage because there was some uncertainty after a Court of Appeal ruling; secondly to make sure that the Residential Tenancies Act applies to all premises intended for residential use even if they are unlawful for residential purposes and that came about by two conflicting High Court rulings. And thirdly this bill sets out the rights and responsibilities on all parties that have a relation to contaminants and contamination and specifically methamphetamine contamination. And I'm not sure if the National Party wants me to go back on to that history as well. I would like to thank the Governance and Administration Committee for its consideration of the bill. I understand that they have set a stellar example of what can be achieved through both collaboration and consensus-based approaches in scrutinising legislation. So can I commend the members of that committee for their work. I would also like to thank those who made oral and written submissions on the bill. Those submitters represented a good cross-section of groups and individuals with an interest in the tenancy sector including tenancy advocacy groups landlords property managers student associations charities community groups and individuals. The committee's report includes a number of sensible recommendations that enhance the bill that the Government has picked up. Further changes were made through a Supplementary Order Paper (SOP) at the committee stage and I want to thank officials from the Ministry of Housing and Urban Development for their work on this bill to ensure it is fit for purpose and able to provide better clarity in the rental market around the three areas. I would also like to thank my colleague Phil Twyford for his dedicated work on this bill taking it through much of its legislative journey and shaping it into a very worthy piece of legislation. The bill firstly deals with tenant liability for damage by making tenants liable for careless damage: up to four weeks of rent or their landlord's insurance excess whichever is lower for tenants on an income-related rent subsidy. Their liability for careless damage will be capped at four weeks of market rent. These liability settings strike an appropriate balance between keeping landlords' costs neutral as much as possible and incentivising tenants to take care of rental properties and protecting tenants from excessive risks and costs. The provision also should go to encourage cost-effective insurance arrangements for landlords. Hon Mark Mitchell: You're going good Faaf.Hon KRIS FAAFOI: Thank you. Thank you Mr Mitchell. Also in the select committee process submitters pointed out that tenants have a right to know the level of their liability for careless damage. Bringing the level of their liability to their attention will incentivise them to take care of rental properties. Accordingly changes have been made to the bill to require landlords to disclose their insurance information in new tenancy agreements. These requirements will be simplified through the SOP so that landlords need to state whether their property is insured and if it is insured they must include the relevant insurance excess or excesses for the property. Landlords must also state that the policies are available upon request and when tenants request insurance information from their landlords this must be provided within a reasonable time. Failure to comply with these requirements will be an unlawful act with a maximum penalty of $500 which is aligned with the penalty for non-compliance with the requirement to include insulation statements in a rental agreement.The next lot of provisions deal with premises which are unlawful for residential use and no changes were made to these provisions through the select committee process or through the SOP. The bill amends the definition of residential premises" to ensure that all premises which are used or intended to be used for residential occupation are covered by the Residential Tenancies Act and this is regardless of whether they can be lawfully occupied for residential purposes. This change will confirm once and for all that the Tenancy Tribunal has full jurisdiction over all rental properties and rental premises lawful or otherwise and this is necessary because there has recently been a lack of judicial clarity in this area evidenced in proceedings in the Tenancy Tribunal the District Court and also the High Court. These changes will ensure tenants are accorded the full suite of rights and protections of the Residential Tenancies Act and that the Ministry of Business Innovation and Employment can take appropriate action against landlords who rent out non-compliant rental properties. The bill also sets out that the Tenancy Tribunal if premises are found to be unlawful for residential use has the ability and discretion to order remedies appropriate to the different circumstances of a particular case. Lastly the bill sets out responsibilities where there is contamination in a rental property. The select committee recommended amending the bill to address contaminants generally rather than methamphetamine specifically. This will provide for a more practical regime which is flexible enough to address the health risks of any harmful substance in rental properties including methamphetamine. The SOP created a new landlord obligation to comply with all contaminant regulations and to not rent out contaminated properties. Once relevant regulations are in place these will ensure the health and safety of those who rent out those properties. The bill will also discourage costly and unnecessary baseline testing by making it clear that landlords who have complied with contaminant obligations as set out in regulations would not be found liable for failing to provide habitable premises. So if a landlord has no reason to test for a contamination and has otherwise complied with the relevant contamination regulations he or she will not be penalised even if contamination is later found or contaminant residues are found at new low levels. Once the bill is introduced landlords would have a specific right of entry to test for contaminants because methamphetamine is defined as a contaminant. The right of entry to test for methamphetamine is not contingent on regulations being made. The bill does contain regulation-making power which means that any contaminant which is identified as harmful to health will be able to be dealt with by regulations. These regulations will be able to set maximum acceptable levels and maximum inhabitable levels for these contaminants; impose requirements for landlords to test for contaminants in certain circumstances; thirdly prescribe methods for taking samples and testing for contaminants; fourthly prescribe decontamination processes; and lastly prescribe the way in which goods left in contaminated premises should be dealt with by landlords. Finally the bill clarifies how tenancies are able to be terminated on short notice where contamination is established above the maximum inhabitable level. This means that where significant contamination is discovered and it is not caused by a breach of the tenancy agreement a tenant may give at least two days' notice and a landlord may give at least seven days' notice to terminate the tenancy. These notice periods are similar to the ones used when a property is so seriously damaged that it becomes uninhabitable. I believe I'm about to run out of time but it is a pleasure to pass this legislation—something the previous Government could not achieve.ASSISTANT SPEAKER (Adrian Rurawhe): I call Simon O'Connor."