Williamson Maurice: Residential Tenancies Amendment Bill — First Reading 
Williamson Maurice: Residential Tenancies Amendment Bill — First Reading 
[Volume:654;Page:3827] 
Hon MAURICE WILLIAMSON (Acting Minister of Housing) 
: 
 I move  
That the Residential Tenancies Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the Residential Tenancies Amendment Bill be considered by the Social Services Committee and that the committee report finally to the House on or before 5 October 2009 and that the committee have authority to meet at any time while the House is sitting except during oral questions any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House and to meet outside of the Wellington region during a sitting of the House despite Standing Orders 187 189 and 190(b) and (c). 
The Residential Tenancies Act 1986 sets out the rights and obligations of both landlords and tenants and provides a way to enforce those rights and obligations. The residential tenancy market has undergone significant change over the 22 years since that Act came into force. More people particularly older people and families with children are renting and they are often renting for longer. The private residential rental market has grown as more people have seen it as an investment opportunity particularly mum and dad landlords. A wider range of rental accommodation is now on offer particularly in terms of apartments and one-third of New Zealand households now live in rental properties. 
The bill updates and clarifies existing rental laws in response to the changes in the structure and nature of the residential rental market. It adjusts the balance of the Residential Tenancies Act enabling landlords to manage their properties effectively and ensuring that tenants have access to stable good-quality accommodation. The bill will protect some of the most vulnerable people—those living in boarding houses—and also address risks for landlords in providing rental accommodation. 
These reforms are long overdue. Both landlords and tenants have been keenly awaiting reform to the tenancy laws since the previous Government commenced a fairly drawn-out review in 2004. That review although well intentioned resulted in the introduction of a bill in May 2008 that would have created inequities added unnecessary cost and adversely affected future provision of rental housing. Not surprisingly given stakeholders’ concerns that bill never progressed even to its first reading. The Minister of Housing Phil Heatley listened to stakeholders’ concerns and acted swiftly and decisively to bring this new improved and more appropriately balanced bill before the House. This Government is intent on ensuring protection for some of the most vulnerable tenants in New Zealand those who live in boarding houses as they are currently not covered by the legislation. We are therefore requesting a shortened report-back time from the select committee. 
This bill will also provide clearer guidance for landlords. Changes to the Act were mooted by the previous Government; this Government is anxious to progress this legislation to give certainty to both tenants and landlords who have been waiting for a long time. We have kept our promise to make sure that renting out houses is not too tough for the thousands of mum and dad property investors who provide houses for almost one-third of the population. We have kept our promise to make sure legislation supports private sector rental options and encourages the supply of affordable and decent rental housing stock. I particularly acknowledge the contributions of time and effort made by the New Zealand Property Investors Federation the Real Estate Institute of New Zealand the Independent Property Managers’ Association the Tenants Protection Association the Manawatu Tenants Union and the Insurance Council of New Zealand towards the development of this bill. 
Key provisions in the bill will extend the Residential Tenancies Act including access to advice information and disputes resolution services to more people involved in renting such as tenants in boarding houses. The bill will clarify the responsibilities for outgoings by introducing overarching principles to indicate when landlords or tenants are responsible for charges such as rates or water rates. It will introduce clearer and fairer processes for terminating and renewing tenancies to provide an appropriate balance between flexibility and certainty of tenure. It will encourage landlords and tenants to comply with their obligations under the Act by increasing the value of existing fines and exemplary damages and by introducing new sanctions. It will provide for most tenancy disputes to be resolved quickly fairly and cost-effectively and it will improve the enforceability of Tenancy Tribunal orders. The bill allows changes to be phased in reflecting the fact that some will require a period of adjustment by landlords and tenants or indeed by both. 
I shall now outline the key changes contained in the Residential Tenancies Amendment Bill. It will extend the Residential Tenancies Act’s coverage to more people who are renting such as tenants in boarding houses and tenants in accommodation where more than 20 percent of their rent is for meals cleaning or other services provided. This will give those many thousands of tenants access to the same advice information and disputes resolution services as is available to other people who rent. 
In the case of boarding houses some of the rights and obligations of tenants will differ from those of other tenants because of the different dynamics created by communal living. These differences include the way tenancies are terminated the process for dealing with abandoned goods and the ability for landlords to make house rules. Boarding-house landlords will be able to take bonds from their tenants in the same way that other landlords may do so but the amount of the bond will dictate whether it is required to be lodged with the Department of Building and Housing. Extending coverage to premises where meals or other services are provided will ensure that there is an adequate consumer protection for people renting units in places such as retirement villages. The rules applicable to such tenancies will be the same as for general tenancies. 
The bill clarifies responsibility for outgoings by introducing overarching principles under which landlords will be responsible for charges that are incurred regardless of whether the premises are occupied such as rates and insurance. Tenants will be responsible for charges that can be directly attributable to their occupancy of the premises such as water use. The introduction of these overarching principles will address a frequent cause of misunderstanding and dispute and will ensure that the Act’s provisions are flexible enough to accommodate any future charging regimes adopted by utility and service providers. 
The bill introduces fairer and clearer processes for terminating and renewing tenancies. It provides greater certainty to landlords and tenants by providing for fixed-term tenancies to automatically convert to periodic tenancies when they expire unless the parties enter a new fixed-term agreement or give advance notice that they do not want the tenancy to continue. Landlords will be required to state a reason when terminating a periodic tenancy on less than 90 days’ notice in order to ensure that their grounds for termination are valid. The bill will give a party the ability to end a tenancy on short notice where the premises become uninhabitable due to a breach of the tenancy agreement and where that other party is the landlord it enables a tenant to stop paying rent. 
The bill clarifies the status of a tenancy when a sole tenant dies and it provides a range of options for terminating the tenancy. This will provide an appropriate balance between enabling landlords to regain possession of premises following a tenant’s death and providing friends and family with time to grieve or to negotiate a new tenancy. The bill also requires the Tenancy Tribunal to terminate a tenancy on application by a landlord where a tenant has permitted his or her associates to assault or threaten specific persons including the tenant’s landlord and neighbours. It also clarifies the circumstances in which the tribunal can terminate the tenancy for rent arrears. 
The bill increases the amount of fines and damages payable for some breaches of the Residential Tenancies Act to ensure the sanctions are meaningful and provide sufficient deterrent value. As is the case with owner-occupied properties the standard of rental housing is variable and some landlords take up an unplanned and unsystematic approach to maintaining it. 
This bill brings our residential tenancies law up to date in wide-ranging areas. It addresses the changes that have occurred in the tenancy market over the past 22 years. It strikes an appropriate balance between the different rights and obligations of landlords and tenants. It clarifies those rights and obligations and it provides incentives to make them easier to enforce.