Mackey Moana: Residential Tenancies Amendment Bill — In Committee 
Mackey Moana: Residential Tenancies Amendment Bill — In Committee 
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MOANA MACKEY (Labour) 
: 
 It is with great pleasure that we finally come to the Committee stage of the Residential Tenancies Amendment Bill. This bill has been a long time in making further progress through the House since it was reported back from the Social Services Committee in about September last year. It is very pleasing that we finally see some action to progress this bill. Labour has put up a number of amendments in the Committee stage. We support this bill; it was Labour legislation to start off with. Unfortunately following the change of Government the Minister of Housing has seen fit to water down the protections for tenants under this legislation so I have moved a number of amendments in my name in an attempt to address that watering down and restore some of the protections that Labour saw fit to award tenants under its bill. 
It is fair to say as a background that tenants in New Zealand do not enjoy an enormous amount of protection compared with tenants in other countries around the world that we generally compare ourselves with. Many other OECD countries have secure tenancies; New Zealand does not have those. This means that any tenant in New Zealand can be evicted on 90 days’ notice for absolutely no reason at all. That does not provide security for families in New Zealand. In saying that I acknowledge that the situation in New Zealand is very different from for example that in Europe where there are a large number of corporate landlords as opposed to mum and dad landlords. I feel that the bill that Labour originally put forward provided a number of protections for tenants that did not need to be removed considering that in New Zealand compared with other countries the balance is already heavily weighted towards the landlord. 
I do not hold out much hope that the Government will support my amendments because I fear some of these arguments have already been had and lost. But there is one particular amendment on a new issue that I hope the Government will support. Certainly Labour will be arguing very strongly that the amendments put forward in my name in this Committee stage should indeed be supported. 
The first amendment in my name that I will speak to relates to the issue of letting fees. In Labour’s bill we prohibited the charging of letting fees to tenants. This is the situation where a tenant goes into a letting agency in order to find a property to rent and a landlord has engaged a letting agency to market the property to prospective tenants. When a tenant finds a property that he or she wishes to rent the letting agency then charges that tenant a week’s rent usually—sometimes more—for that service. Labour thought that that was particularly unfair. It is hard enough at the moment for tenants to get into the private rental market without putting up another barrier. When we consider that rents are likely to rise as a result of the taxation changes in the Budget we see that this barrier for tenants is not needed and not warranted. I make the comparison of letting agents with real estate agents. When someone wants to sell a house and engages a real estate agent to market that house to prospective buyers the vendor pays the charges or the commission to the real estate agent not the person who buys the house. 
The argument is often put up—and it was put up to us in the Social Services Committee—that when the rental market is tight the letting agency is in a way working for the tenant not for the landlord because it is so hard to find a property that it is in fact good for the tenant that a letting agency is doing that work. But that argument does not apply when someone sells a house. Regardless of the state of the housing market the person who has engaged the professional agency be it a real estate agent or a letting agency pays the agency’s commission. It is not the decision of the tenant or the purchaser to engage that professional agency so why should those people be the ones who pay for its services? I welcome the Minister’s arguments on this matter because it is a significant barrier to getting into the rental market. It is yet another thing that people have to pay on top of the cost of moving on top of the cost of an upfront bond and on top of the fact that rents will be going up—and they have been going up. The letting fee might not seem like a lot of money to some members here but for someone to have to pay another week’s rent on top of everything else may well make the difference between that person being able or not able to get into the property. 
An interesting fact is that a lot of property agents came along to the select committee and said they were annoyed because other agents could charge letting fees but they could not. When we asked them whether they would be happy to just have the right to charge those fees taken away from everyone they said yes. They wanted to have a level playing field; they did not want to have those fees as a source of income. National Party committee members and Labour Party members agreed there should be a level playing field but the National Party’s point of view was that everyone should charge tenants a letting fee and the Labour Party and the Green Party—I am not speaking for it—then said no one should charge letting fees to tenants. If a landlord wants to engage a property management agency or a letting agency to market a property then the landlord should pay the cost of engaging that agency. The charge should not be put on to the tenant. 
So there is an amendment in my name that would make this change and prohibit the charging of letting fees to tenants. I urge members to support it. I think it is only fair that this amendment be passed into law. 
The second amendment that I will talk about is one that started off in a member’s bill in the name of my colleague Maryan Street. It is around the issue of joint and several liability when there is damage to a property. This issue arose out of a case in Dunedin where a student flat burnt down. One tenant was responsible for the action that caused that but the other tenants were not. In fact they were not there. They did not know anything about it and they could not have stopped it because they knew nothing about it. But they were held liable. We have heard I believe that two of the tenants who had nothing to do with causing the fire and who could not have stopped it even if they had wanted to were bankrupted as a result of the insurance company going after them to get back the money that it had to pay out to the landlord to fix that property. That is a situation where clearly only the insurance company wins. 
I want to be quite clear about this issue because I know that there tends to be a bit of mischief about trying to misrepresent what Labour believes about it. Absolutely a landlord should be able to recoup the cost of damages caused to a property but Labour says we should make the person responsible for causing the damage the one who is targeted for recouping that money rather than people who are not responsible for it. It may well be that the response that Labour put up is not the best way of doing it and that the Government thinks there is another way of achieving that. If so we would definitely be open to considering other options. But I do not think anyone thinks it is fair that an insurance company can get two bites of the cherry by chasing after people who could not possibly have stopped an action from happening. We have ended up with young people at university being bankrupted as a result of the actions of that company. 
This is a serious issue. The Minister has known about this issue for a long time. In fact when in Opposition he dealt with it as the spokesperson on housing when my colleague Maryan Street first brought her member’s bill to the House. He has had more than 18 months to deal with it as the Minister. The select committee reported back on this bill many many months ago; I think it was in September last year. He has known about the issue for a long time and I hope that he will be able to stand up and tell us either why he will not be addressing it—why he does not feel the situation needs to be addressed—or if he is prepared to address it what he intends to do about it. 
I will save my other amendments for further calls. Certainly the issue of letting fees is critical and I do not understand how the Government could possibly say it is unfair that the person who engages the letting company should pay for that as opposed to the person who ends up renting the property particularly in light of the Budget changes and the hardship that is being faced by many people. In fact 30 percent of New Zealanders rent their properties and 50 percent of them have a combined household income—not personal but combined—of under $50000 a year. These people cannot easily absorb another couple of weeks’ rent on top of everything else and that is what makes the issue of letting fees even more critical than perhaps it was when the previous Labour Government put forward legislation to prohibit the charging of letting fees to tenants. It is an issue of fairness. I do not see the Government scrambling to make sure that in a tight housing market the real estate agents charge buyers and not vendors for marketing properties so it is difficult to comprehend why the Government and the Minister of Housing feel it is necessary to whack another cost on to tenants who in the current financial situation are already struggling. 
I have to say that issue was a big one at the select committee. It was an issue on which even those who thought that letting agents should be able to charge whomever they wanted acknowledged that charging tenants the letting fee caused hardship. There were people who acknowledged that it did keep people out of the housing market. We had a comment from one of the National members on the committee that those people could just go down the road and find somewhere else to rent. That comment worried me because I think that sometimes National members do not understand that the lowest-paid New Zealanders do not have a lot of choice when it comes to these situations.