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 30 June. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to stand this afternoon and talk to the third reading of the Residential Tenancies Amendment Bill. First I acknowledge the Social Services Committee and all the hard work it put into this bill. In particular I acknowledge my deputy chair Hekia Parata from Mana; Tim Macindoe who will speak later from Hamilton; Todd McClay from Rotorua; and of course Chester Borrows the member of Parliament for Whanganui. Of course other members who sat on the committee contributed as well. I also acknowledge the hard-working officials who worked for us. It was a very intense bill and we made many significant changes to it. 
This bill took a while to get to Parliament. The previous Labour Government first started a review on residential tenancies in 2004. Unfortunately it took 4 years to get the bill before the House. In 2008 the first bill came before the House. When National came into power we looked at the bill and did a bit of a review on it. In 2010 it is here for its third reading; it came to the select committee that I chair last year in September 2009. So it is a pleasure to be here supporting this bill today. 
Obviously the residential tenancy market has undergone significant change in the 22 years since the Residential Tenancies Act was last looked at. In fact one-third of New Zealanders live in rental properties today which is quite significant. It is quite a big change from 22 years ago. So it was important that this Act was addressed. Both landlords and tenants have been asking for issues around residential tenancies to be brought forward and addressed. These reforms are long overdue. 
This bill provides a modern framework that addresses the needs of today’s residential property market. The bill defines the rights and obligations of residential landlords and tenants in a clearer and much fairer way. 
The review of the bill identified five primary issues with the current Act which we believe this bill will address. Currently there is insufficient compliance enforcement and dispute resolution. There is a lack of knowledge around landlord and tenancy rights and the obligations that ought to be conferred. It leaves open mixed capability to manage property and tenants. It allows too variable a standard of rental housing and it lacks the opportunity for a stable tenure of longer-term tenants. It was important that this bill came to the House to address those issues. 
In light of these concerns the bill makes positive changes and will encourage the development of a rental market to provide stable quality housing to those who live in rented homes. It will enable landlords to manage their properties more effectively giving them certainty around obligations. 
Many of us stand here today representing our electorates. My electorate is Ohariu which I represent for National. We have a big area of rental properties which may surprise many people and we also have many many landlords. So this bill is quite relevant to all those constituents in my electorate of Ohariu. 
The committee looked at certain slightly contentious areas more closely than others. One of those areas was the disclosure of cleaning orders. We are unfortunately in a society where P is manufactured in residential properties. When that manufacture is identified the question was what to do if there are cleansing orders. The committee had a big debate around whether one has to disclose that information to tenants when they come into a tenancy and whether the fact that it sits on a land information memorandum was enough for the tenants to research it and find that there was a cleansing order on the property. We looked at this area in quite a lot of detail. The select committee came to the conclusion that we would rather landlords went out and got the properties cleansed and did not hide the fact that there had been drugs in that property for fear of never being able to let it again. So we decided they would not have to disclose that to the tenants in a formal way; it would still be on the land information memorandum of the property. This was to ensure that there was an incentive for landlords to identify whether their houses had been used as a P lab and whether they have had them properly cleansed. We had confidence through the cleansing process and the cleansing orders that tenants would not be at risk at all. 
We had a big discussion on what we should do about abandoned goods. We heard from representatives from universities which was interesting. Obviously students especially in Otago are renowned for leaving their property all over the place. They pack their bag leave the flat and leave everything there. So we discussed what we could do for the landlords and the tenants to make it fair and equitable for everybody. We put some practical solutions in the legislation around the cost of removal and what the price of those assets—if we can call them assets—would be. We discussed what to do with the couches the cars on the front lawn and the mattresses on the front porch and how to determine whether the landlord has to store them whether he or she should pay the cost of storage and whether he or she can dispose of them. We put some criteria in place in terms of what a landlord could and could not do. 
We looked at letting fees and temporary or transient accommodation. We excluded camping grounds which were caught up in the legislation. Retirement villages were also caught up in it. We opened up the legislation a little bit to boarding houses to give those tenants a lot more rights. We had a great debate on many of these issues. We feel that we have got it just right to make it fair for tenants and for landlords. I commend this bill to the House. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I apologise to the House for my slight lack of voice. I will see whether I can get to the full 10 minutes. There is a possibility that I might not. 
Craig Foss 
: That’s a good thing. 
CHRIS HIPKINS 
: The National Government prevented us from getting the good drugs over the counter at the pharmacy. We have to go to the doctor to get those now. I have not had the opportunity to do that yet—[ 
Interruption 
] Can anybody get a sick leave form for me? 
It is slightly ironic to hear Katrina Shanks complaining about the fact that the previous Labour Government did not do enough in this area and that it took too long. This bill has taken since September. Where are we now? We are towards the end of July. It has taken nearly a year for the Residential Tenancies Amendment Bill to be progressed through its remaining stages. So it is a little bit rich for Katrina Shanks to say that the previous Labour Government took such a long time. 
There were situations that could have been potentially avoided had this legislation been passed prior to Christmas. I am thinking about the boarding tenants who were chucked out of where they were living for the sevens rugby. That potentially could have been avoided had the Government got its act together to get this legislation passed before Christmas. I have to say that listening to the debate I was very disappointed that the Government chose to vote against an amendment put forward by my colleague Moana Mackey that would have guaranteed tenants certainty during major events. It would have prevented them from being evicted from their homes because of the very significant amounts of money that landlords could potentially generate by letting those homes on a short-term basis during major events. Moana Mackey’s amendment would have stopped that from happening. It was very disappointing that the Government voted against that amendment. Although generally speaking we are supportive of this legislation some changes proposed by Labour were opposed by the Government and we think that will make this bill much much weaker than it otherwise would have been. 
I will talk in particular about the issue of letting fees. There is a problem under the current law that a real estate agent can charge a letting fee but a property manager cannot. The Labour Party’s view is that we should therefore do away with the letting fees. There should be an even playing field between real estate agents and property managers. The Government also thinks there should be a level playing field but it wants to do that by allowing property managers to charge a letting fee as well which ultimately leaves the tenants or the prospective tenants— 
Katrina Shanks 
: Or not. 
CHRIS HIPKINS 
: It may be a one-off fee but people on low incomes students in particular—and Katrina Shanks talked about Otago University students—now potentially face another fee on top of all the fees that they have to pay at the beginning of the year in order to find somewhere to live. I do not think that that is necessarily a good thing. I think it would have been much better had the Government agreed to the Labour recommendation which was to do away with the letting fees altogether. 
Ultimately if I sell my house I am the one who has to pay the real estate agent. Why should it be different for a tenant? The person purchasing the house does not have to pay the real estate agent; it is the person selling the house who has to do it. Why should the situation be reversed in the case of a tenancy arrangement? Should it not be that the person letting the house pays the fee not the prospective tenant? It is very disappointing that the Government voted against that. We know that for those looking for rental property accommodation sometimes letting fees can be a significant barrier to finding somewhere to live. 
There are elements of this bill that the Labour Party supports strongly; that is why we are voting in favour of it. Obviously we want stability and certainty for those living in rental accommodation. Being able to have some certainty about where one lives being able to put down roots and being able to send one’s kids to a school and know that they will not be uprooted and have to change school at short notice is really important. That is where stability in residential tenancy arrangements is important. It is really important that there is good faith on both sides of a tenancy arrangement—from both the tenant and the landlord. As a constituency member of Parliament—I know plenty of other people in the House will have this experience as well—I have seen evidence of where the good faith relationship has broken down on one side or the other or in some cases on both sides. Not all tenants behave the way they should; not all landlords behave the way they should. It is really important that we provide very clear legislation and guidelines so that everybody knows where they stand. I think this bill goes some way to improving the situation at the moment. 
I talked about good faith and with the Minister of Housing in the House I will once again pick up the major tenancy issue that exists in my electorate in the community of Pomare and the bad faith I think that the landlord—in that particular case Housing New Zealand Corporation—has been showing towards the tenants in Pomare. It has been leaving empty large numbers of Housing New Zealand Corporation houses. There were 42 empty houses at last count. There may be more in the last few weeks; I have not driven around there to count them. That is creating problems for the local community. 
One of the obligations on a landlord particularly in the case of Housing New Zealand Corporation where it may well own all of the houses in a neighbourhood should be to act in the best interests of the whole community as well as the individual tenants. When the landlord leaves a large number of houses empty prone to vandalism squatting and antisocial behaviour—a whole lot of those things—all that that is doing is exacerbating the problems in that community. I know that Housing New Zealand Corporation wants to do some redevelopment in that community. I welcome that; I think that is very good. It is long overdue and I think that successive Governments need to accept responsibility for that. But I would like to see that happen sooner rather than later. 
At the moment my very strong view is that Housing New Zealand Corporation is being a bad landlord to the people in Pomare. It is not maintaining the houses that are there at the moment. The tenants who live there are having a great deal of difficulty getting even the most basic maintenance done. That is not good enough. They deserve to have Housing New Zealand Corporation behave as a responsible landlord but that is not happening at the moment. I want to see the Government go back to Pomare give them some certainty around when the redevelopment is likely to take place give the tenants who are in the houses at the moment some certainty that when the redevelopment takes place they will be looked after and that they will be able to go back into their community once those houses have been redeveloped. One of the concerns amongst that community is that they will be effectively thrown out of their community so that the houses can be redeveloped they will not be able to go back there afterwards and the whole community will be broken up. I think that it would be good to see Housing New Zealand Corporation give them some certainty by engaging with them again to reassure the people there that this is not about turfing out people who are good tenants at the moment and not allowing them to return to their community but that there will be some staged redevelopment process that allows those already in the community to stay in their community while the redevelopment takes place. I do not have any problem with the Government cracking down on severe antisocial behaviour as part of the process. I do have a problem if innocent tenants the good tenants who take a lot of pride in their houses are being turfed out. One of those tenants has for example won a Housing New Zealand Garden Award. 
There is a winner of the Housing New Zealand Garden Awards in Pomare. I want to see those people rewarded for taking pride in their houses. I do not want to see them having their whole community effectively written off by the Government. Significant progress can be made in that area to improve the lot of those tenants. I hope the Government takes that on board and does something about it. 
Finally to conclude one of the things I have become aware of as a local member of Parliament is that there are good landlords and bad landlords. Possibly one of the areas of weakness in the legislation at the moment is that there are few minimum standards that a landlord needs to meet in terms of the property they provide to a tenant. The House may want to consider whether somebody who is letting a property should have to meet minimum standards in terms of its habitability before it can be let. Otherwise there is not much to prevent landlords running slums as some of the very irresponsible ones do at the moment and that is something Parliament should not turn a blind eye to. I think the possibility of some greater minimum standards for rental properties is something we should look at closely. Before a landlord can put a property on the market for rental perhaps they need to meet some minimum standards so that we know that those who are unable to afford to purchase their own properties are protected. As Katrina Shanks pointed out a significant number of New Zealanders live in rental properties. We want to provide them with some certainty that they can find not only somewhere to live but also an adequate standard of accommodation in their rental property. 
Overall this is a good bill. It does not go as far as the Labour Party would like. We think it has been watered down from what the Labour Party was proposing. We are disappointed the Government has voted against what we felt were some constructive common-sense amendments including the one I have mentioned in respect of protection for tenants during major events. Overall we are in support of the legislation as it stands at the moment. We would like it to go further and we will be voting in favour of it. 
TIM MACINDOE (National—Hamilton West) 
: 
 Tena koe Mr Speaker. That was a fairly considered and constructive contribution from the member for Rimutaka. So I begin by acknowledging that and thanking him for making some fairly thoughtful observations. Nevertheless I cannot let him get away with the suggestion that in some respects the Government has been sitting on its heels in respect of this legislation. He is after all a member of the party that as far back as 2004 started talking seriously about the need for changes to the residential tenancies legislation— 
Hon Phil Heatley 
: Talked about it. 
TIM MACINDOE 
:—that is right—and saying there were some really significant flaws in the legislation. Five years later Labour left office and what had it achieved in this area? Positively zip. We certainly heard a lot—Labour said a lot—but it achieved absolutely nothing. So I say to Mr Hipkins that he needs to brush up on his history a little bit before he takes the Government to task. It is certainly fair to comment that this bill has taken just over a year from its introduction to what is very nearly its passage. But it is incredibly complex legislation a very important bill and it is therefore right that we have taken our time. I am delighted that we are now in the final lap. 
I reiterate that there are three main purposes to the bill. The first is to encourage the development of a rental market that provides stable quality housing to those who rent their homes. The second is that it will enable landlords to manage their properties more effectively. The third is that it clarifies and appropriately balances tenant and landlord rights and obligations. That is not an easy task. It was important that we took our time to get it right and I am confident that we have. 
By and large it is fair to say that the bill has enjoyed cross-party support in a very constructive progression through the select committee process and I thank everybody involved in that. As the Minister commented when he spoke on the bill on previous days and as other speakers have said it is a very very important bill that affects literally hundreds of thousands of New Zealanders. It was important that we did the job thoroughly did not rush it and took our time to address the significant changes that have occurred in nearly a quarter of a century since the Residential Tenancies Act came into force back in 1986. I am not sure whether the previous speaker Mr Hipkins was even on this planet at that time but I am sure that if he had been he would recognise huge changes in the quarter of a century since. 
The bill has received very careful and thorough consideration from the departmental officials who have guided our deliberations as it passed through the Social Services Committee. I thank those officials and acknowledge the good job they have done. We are all clearly in their debt. They have given us very good advice at every stage along the process and they have taken on board the many submissions we received and have incorporated them to make sure the bill is a really balanced piece of legislation. 
I also pay tribute to Katrina Shanks the chair of the Social Services Committee who has provided very fair and able leadership in this and indeed in all measures since she became the chair. She is doing a very fine job and she deserves praise for her commitment and for the intelligent approach she is bringing to that responsibility. I also acknowledge the contributions of my select committee colleagues on all sides of the House for their collective efforts to get this bill right. 
As I have mentioned literally hundreds of thousands of New Zealanders are affected by the provisions of this legislation and as we go further on through the years more and more New Zealanders will come into that category. They will all depend on the legislation to deliver fairness and encourage adequate and ethical investment in New Zealand’s residential property market. 
Our landlords need to have confidence that they will receive fair rates of return if they invest in rental properties and that they will have adequate protection against that small minority of tenants who abuse their property and fail to meet their obligations. As the previous speaker has said all electorate members of Parliament are aware of a few cases of that type and it is very distressing for landlords when they find themselves in that position. 
Similarly tenants need to have the security of knowing that they will receive a fair deal that their rights are enshrined in law and will be respected and that they will have affordable and accessible remedies if their rights are abused. That is why the bill provides for access to advice information and dispute resolution services. It is why the responsibilities of landlords and tenants for various outgoings such as rates and water charges are clarified. Again this is an area where things have changed considerably in the last quarter of a century and we needed to ensure that the Act was updated to come into line with contemporary conditions. The bill includes measures to facilitate speedy and cost-effective adjudications of tenancy disputes and I thought I might just note how significant those changes are. 
The bill increases the Tenancy Tribunal’s monetary jurisdiction from $12000 to $50000. It increases the monetary threshold on the automatic right to use legal representation from $3000 to $6000 to ensure that legal representation is used only when it is justified. One of the features of the Tenancy Tribunal has always been that it is accessible and by and large does not require representation for the parties involved. The bill also requires the tribunal to order the other party to a dispute where that is the only way of trying to bring things to a head and to compensate the applicant for the filing fee if the applicant’s claim is upheld in full or partially by the tribunal and if in the opinion of the tribunal it would be reasonable to make such an order. I am pleased to see that additional discretion coming into place. 
The bill also improves the enforceability of tribunal orders by giving the tribunal jurisdiction to make an order against a guarantor of a party to a tenancy agreement. It allows a party to recover reasonable private debt collection costs associated with enforcing a tribunal order and it assists tribunal creditors to locate debtors by facilitating the release of address information held by Government agencies to the District Court. 
As I said there are some very significant changes here. Several speakers have noted that a major initiative of this bill is the provision of protection for boarding house tenants who were previously outside the scope of our tenancy legislation. I echo the concern of others that those New Zealanders have been vulnerable to exploitation and abuse and it is good to see them gaining some security and an acknowledgment of their rights under this bill. 
I have been proud to contribute to the deliberations of the select committee and the House on this bill. I congratulate the Minister Phil Heatley on his successful stewardship of this bill through to its third reading. It is a very significant bill and a very significant achievement for a determined and effective Minister. He will certainly be remembered for this in years to come—not that I am suggesting he is going anywhere—and it is another significant step along the road for a focused and effective Government which is delivering real gains for New Zealanders and improvements to our social and economic welfare and infrastructure. I am proud to have played a small part in that outcome. 
Bill read a third time.