Heatley Phil: Residential Tenancies (Damage Insurance) Amendment Bill — First Reading 
Heatley Phil: Residential Tenancies (Damage Insurance) Amendment Bill — First Reading 
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PHIL HEATLEY (National—Whangarei) 
: 
 I rise to put the National Party’s view on the Residential Tenancies (Damage Insurance) Amendment Bill. The bill amends the Residential Tenancies Act. It provides for landlords to insure the interests of a tenant against liability for damage to the premises that they took no part in causing. It is designed to protect “the innocent tenant” from liability. The bill does not prevent the landlord from passing the costs of insurance on to the tenants as an increase in rent and it would not apply if the damage were intentional. National opposes the bill. 
The member who introduced the bill put up the case where six flatmates in Otago witnessed $67000 worth of damage to their flat because one flatmate had a fry-up while the rest of them were out. I wonder whether they were scarfies—six flatmates in Otago five were out and the other one was having a fry-up on the stove. I do not think they were scarfies; I think they were 45-year-old middle-aged men and women. Five of them were out working late that night and the other one had not eaten for days and was having a fry-up. I do not think they were scarfies. Anyway one of them was having a fry-up at night while the other five were out. That flatmate started a fire that caused $67000 worth of damage and do members know what the Labour Party member says? She says it is the landlord’s fault! She said five scarfies were out boozing one came home for a fry-up and caused a fire and it is the landlord’s fault and he should pay. 
But the Labour Party member does not stop there. It is not just the landlord’s fault. She wants us to pass legislation because she said it is 20000 landlords’ fault. She wants 20000 landlords in this country to pay insurance so that their tenants will be covered when they cause damage or vandalism or have fry-ups and burn the house down. That is absolutely absurd. 
I ask whether the member has done any study on this issue because my understanding is that there is no widespread tenant dissatisfaction with current insurance arrangements. If there is minor damage a bond is paid and that can be uplifted. We know that landlords today insure their homes against being burnt down seriously damaged or anything like that happening. We know that tenants generally insure the property they have within a home. But in this bill we have a situation that if a tenant invites a guest in and that guest decides to take an axe to the door kick a hole in the wall or spill wine on the carpet and causes damage it is the landlord’s fault. Did the landlord invite the guest? No. Did the landlord invite the flatmate to share the tenancy? No. But the landlord will pay. 
There are two hooks in the bill. One is the issue where apparently tenants first of all have to prove that it was not them but a flatmate or a guest who did the damage. If that is in dispute how will the landlord or insurance company establish whether it was the guest flatmate or tenant who did the damage? How will the landlord or insurance company prove that? 
The second little fish-hook is that in many instances it will be difficult to prove whether the damage was deliberate or accidental. This bill says that recovery will take place when it is accidental damage. If that is in dispute and the tenant guest or flatmate says it was an accident how will we ever prove whether the hole in the wall was accidental or deliberate? I will tell members—the bill says it is the landlord’s fault he or she is not there 24 hours a day assessing who comes into the house and who does not and looking over the shoulder of everyone to see who causes deliberate or accidental damage. 
This bill makes it the landlord’s fault. In the case of the six tenants in Otago— 
Chris Tremain 
: The 45-year-olds. 
PHIL HEATLEY 
: —the 45-year-old middle-aged men and women flatting together where five were out working late and the other one was hungry and had a fry-up it was the landlord’s fault because the landlord was not there watching over the stove and the fry-up. The landlord did not know whether it was deliberate or accidental. The landlord never stopped other tenants coming into the house and never checked whose shoes were under the bed. That is right. What if a lover visits and we see some sort of foul spillage on the carpet or whatever who is to prove whether that act was an accident or deliberate? How will we prove whether that damage was caused by a tenant or guest—a guest whom the landlord never invited in the first place? 
It is currently possible for an innocent tenant to recover the cost of damage or insurance from a guest or flatmate is it not? If a guest comes into a home and causes deliberate damage and the tenant has to pay the landlord can that tenant not go to the courts and seek some sort of redress from their guest? One can do that by law now. Why do we need to bill 20000 landlords when an opportunity for redress already exists? 
We also have an opportunity for redress through the bond system if the damage is minor. Landlord-tenant negotiations can allow an insurance agreement to be made if people really want one in individual cases. Why do we have to legislate that it must happen for everyone? Why do we have to legislate that every landlord must go through this with every tenant? We should not have to. If landlords and tenants want to come to an agreement let them do so. Let them have freedom of choice. A fourth opportunity for redress is that a standard tenancy agreement may be drafted to contain a clause requiring tenants to obtain their own insurance for the careless acts of their guests—not the landlord’s guests but the tenant’s guests. 
Those are the opportunities to fix this problem however minor. We can help the scarfies in Otago in four ways. We have the bond which is paid now. Tenants can get redress from a guest—they can send the bill on to the guest. The landlord and the tenant can make an insurance agreement between themselves. And the tenants themselves can get insurance. There is no need for legislation affecting thousands and thousands of landlords throughout the country. 
I note that the Housing New Zealand Corporation is a landlord and will now because of this legislation have to pick up the bill for all vandalism and damage done to its properties. I will reveal a bit more about that in the next month or two. I know that Minister Clayton Cosgrove is nervous because he knows how much vandalism is happening in Housing New Zealand Corporation homes. 
This bill is absolutely irresponsible. There is no need for it whatsoever. National opposes it on the basis of our principle of personal responsibility. It is not the responsibility of landlords to assess who comes into a home and who does not 24 hours a day. It is not the landlord’s responsibility at all to decide who puts shoes under the bed at night and who does not. This issue is about personal responsibility where a tenant needs to look after the property he or she is in. National opposes this legislation.