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.

MOANA MACKEY (Labour) : I am happy to stand to speak to the first reading of the Residential Tenancies Amendment Bill.

This legislation is a very good example of the many differences between National and Labour, and between the way National and Labour approach the issue of housing, which is a core issue for the Labour Party. National often claims to be the party of aspiration, but it has never understood that aspiration is not simply about personal freedoms and being able to reach out to grasp the opportunity that is there. National members have never really understood that for some people that is just not the reality of their lives. One of the reasons why I joined the Labour Party was that it stood for policies that brought stability and security. Those are two of the most important things that our families, businesses, and communities can have.

Hon Christopher Finlayson: Spare us your clichés and get on with it.

MOANA MACKEY: There goes nasty Mr Finlayson—off he goes!

Labour supports security of employment. Labour has always supported security of employment. Labour does not believe that people should be fired in the first 90 days for something that is absolutely not their fault, and that they do not have to be given a reason. Labour believes in security and stability of income; in the minimum wage being increased every year; in Working for Families; in paid parental leave; and in putting redundancy provisions in the law, which my colleague Darien Fenton’s Minimum Wage and Remuneration Amendment Bill does. Labour supports security in the community, which is not about falling prey to ineffective knee-jerk reactions to law and order, but about actually addressing the causes of crime and creating safer communities. And Labour has always supported security and stability of tenancy in housing.

Labour appreciates that a home is incredibly important to a family and that it is what people build their families upon. For many people in the rental market, homeownership is not a reality, and we need to provide them with security of tenancy. The Government needs to make sure that the law also reflects tenants’ need for stability as well as a landlord’s need for stability. Of course, this Residential Tenancies Amendment Bill is Labour legislation once again. [Interruption] I know that it has been changed; members should let me get there. The consultation on this bill started in 2004. Members heard Minister Maurice Williamson, speaking as Acting Minister of Housing, say that the process had been drawn-out. Well, this is an incredibly complex area of law. It covers many, many people. The law had not been updated for a long time and Labour wanted to do it properly. We know that the National Government’s approach to consultation is to ram through legislation under urgency and to not ask the community what it thinks. That certainly was not the previous Government’s approach.

But, obviously, there is a lot in this bill that Labour agrees with and believes should be done. Labour agrees—because we wrote the legislation—that the jurisdiction of the law should be extended to protect tenants living in boarding houses. Labour believes that we need clarification over who has responsibility for outgoings. Labour also believes that there should be clearer processes for terminating and reviewing tenancies, and for encouraging landlords and tenants to comply with their obligations. Labour wants to see tenancy disputes resolved more quickly and at less cost, and we want to improve the enforceability of Tenancy Tribunal orders. That is why Labour put those provisions in this bill when we drafted it. That is why Labour will support this bill’s referral to the select committee. But Labour will not give its ongoing support for the bill unless significant changes are made to it in the select committee, because they are definitely required.

We in Labour say that the new Minister of Housing is acting a little bit like a cuckoo. He is constantly going into other people’s nests and claiming that they are his. He claimed that this bill was a result of his desire to quickly bring a review of this law to the House. Well, of course, that was after the 4 years Labour spent reviewing tenancy law and doing all the work and the consultation. Then the cuckoo, Mr Phil Heatley, jumped into the nest and claimed that it was his. Labour has seen that with the Tāmaki Transformation Programme, where Labour did all the work and made sure that it brought together all sectors of the community. Labour got the programme to the point where it could go ahead, and then the cuckoo jumped into the nest and claimed that it was his. I look forward to Mr Heatley bringing an original piece of work to this House, rather than constantly taking Labour policy and changing it—in this case, making changes that Labour believes are not necessary and will, in fact, damage the situation in law at the moment.

New Zealand needs legislation that protects tenants and landlords regardless of the Government of the day. That is a very important point because, at the moment, we have a Minister of Housing who has told the Housing New Zealand Corporation that he wants certain undesirable tenants to be removed from Housing New Zealand Corporation houses. Members saw today that people who are on bail have been told they will not be able to apply for a Housing New Zealand Corporation house, regardless of the fact that they might be innocent. Apparently, the Housing New Zealand Corporation can be the judge and jury. It can decide that someone is guilty before his or her case is heard in a court of law, and, therefore, should not be allowed in a Housing New Zealand Corporation house. Given the long time it can take for a hearing to come before the court, this situation might mean that a parent will have to remove himself or herself from the family. The parent will want his or her family to be able to go into a Housing New Zealand Corporation house, but the parent is not eligible and his or her family will become ineligible if the parent stays with them. We think that that is appalling under the law. It is for that reason that Labour will work very hard in the select committee to ensure that protections are put in place to improve that situation, and to make sure that Governments that want to purge Housing New Zealand Corporation houses of people whom those Governments consider to be undesirable tenants are not able to do so under the law of the day.

The Minister of Housing claims that this bill is just about balance, about making sure that the Government gets the balance right. Certainly, that is the case with this type of legislation. But Labour believes that the changes the Minister of Housing has made to the legislation that we originally introduced to the House have pushed the balance too far in the wrong direction. This bill ignores the balance of power between tenants and landlords, as National also did in employment relations law when it ignored the balance of power between employers and employees. Labour will be seeking to address the imbalance at the select committee.

I will talk about one particular clause—clause 35, “Termination on non-payment of rent, damage, or assault”—because it is relevant in terms of the actions that we have seen recently from the Housing New Zealand Corporation in evicting tenants. The clause basically states that the Housing New Zealand Corporation can go to the Tenancy Tribunal to evict anyone who “has assaulted, or has threatened to assault, or has caused or permitted any person to assault, or to threaten to assault, any of the following persons”, which are the landlord, any member of his or her family, or any neighbours. On the surface of it that seems perfectly reasonable. From what members have seen from the Minister of Housing, the clause will, obviously, apply mostly to Housing New Zealand Corporation houses. If a tenant in a Housing New Zealand Corporation house is being threatening or breaking the law, then obviously that situation needs to be dealt with. But the fact is that what members have seen so far is that there is no defence under this clause. The evicted tenant does not have the opportunity to defend himself or herself.

Labour knows that the Minister of Housing had to introduce clause 35 because the Tenancy Tribunal told him it would not uphold an eviction order under the Residential Tenancies Act in the case of the Housing New Zealand tenants out in the Hutt Valley. The Minister of Housing has to pass this clause if he wants to be able to evict people easily. But the fact is that people are not being given the opportunity to defend themselves. They are not being given the opportunity to put their side of the story. There may well be a situation where someone who does not like his or her neighbour just pops up and says to the Housing New Zealand Corporation “They had a gang member boyfriend who came around. That person intimidated me.” Before any of that is investigated, or before any criminal claims are put before a court, that family could be evicted just because a neighbour does not like them for some reason or another. Labour does not think that is adequate protection under the law, and we will work hard in the select committee to require that this clause be changed to make it clear that that is not what the law intends.

One of my biggest concerns is that there might be a case of a woman who has been brave enough to take her family—her children—out of a gang environment and into a Housing New Zealand Corporation State house, then suddenly the gang member boyfriend comes to her house and is intimidatory and really angry because she left. The neighbours get really upset and they ring up the Housing New Zealand Corporation and say the gang member boyfriend has come around and has been threatening people in the community. According to what the Minister of Housing has already sanctioned, and according to this clause, that family can be evicted with no recourse and with no questions asked by the Minister of Housing as to what their real situation was. We could see women who have been brave and courageous enough to remove their families and children from those situations evicted from Housing New Zealand Corporation houses. Labour believes that those people are the very people Housing New Zealand Corporation houses are there for, and those families are the very families the Government needs to protect. Labour will be working to change this clause when the bill goes to the select committee.

I will talk briefly about what is not in the bill, because that is very important, as well. Labour wanted to have professional advocates for tenants going to Tenancy Tribunal hearings. The reason Labour wanted that is that no one can tell me that the Housing New Zealand Corporation is not a professional advocate. Of course it is a professional advocate. There is a huge imbalance of power when a tenant goes into a Tenancy Tribunal hearing against the Housing New Zealand Corporation or one of the many landlord groups that represent landlords. Labour wants the law to allow tenants to have someone go to the hearing with them who is up at that same level as the landlords, in order to make sure that that balance is right. That provision has been removed from this bill.

The Minister of Housing talked about the Residential Tenancies (Damage Insurance) Amendment Bill, which my colleague Maryan Street brought to this House. He said how terrible it was. The provision in that bill was going to be in this bill under Labour. It would have made sure that if one tenant caused serious damage to a house, then the rest of the house’s tenants, who had no part in the damage and no ability to stop it, were not held liable. That provision was based on a case in Dunedin where a flat was set on fire by one particular flatmate. The flatmate claimed full responsibility and full liability for the fire, but the insurance company pursued all four other flatmates whose names were on the tenancy agreement, even though they were not in the house at the time, had nothing to do with the fire, and could not have stopped it if they had wanted to. The flatmate had admitted liability, but the insurance company decided that it was not going to get the hundred and whatever thousand dollars from the one guy, and it would be better to spread it out across all of them, so it pursued them. One young man ended up being pursued for 4 years by the insurance company and was eventually made bankrupt.

This Government says that is OK. This Government says that is all right. Labour put that provision in the original bill—and Mr Williamson might want to reflect on the words he said about my colleague Maryan Street—because that situation is not OK. It could have been fixed very easily by what Labour tried to do under the original bill. That provision came from a court case in which the judge said the law was incredibly unjust.

Labour will support this bill going to the select committee, because it is a Labour bill.

JO GOODHEW (National—Rangitata) : It is a pleasure to rise tonight and speak on the first reading of the Residential Tenancies Amendment Bill. It is a bill that the Social Services Committee will welcome. The Hon Maurice Williamson has outlined the purpose of the bill, and I begin by saying that it is clear that both National and Labour believe that an amendment bill is necessary. On that point we have some agreement; there are also many points on which we differ.

One of the first interesting points I will make is that significant changes in the structure and dynamics of the residential rental market have taken place. The number of people living in rental housing has increased, with a corresponding decline in homeownership rates. One-third of New Zealanders are renting their homes. Of those people, 81 percent rent from a private landlord or trust, and 19 percent rent from a public landlord such as the Housing New Zealand Corporation or a local authority. Because 15 months is the average duration of tenancy, it is important that we put in place some amendments to residential tenancies so that we can deal with, and meet the needs of, people who are in that position. Fifteen months is a very short average duration of tenancy. It is interesting to know that in my own electorate of Rangitata, 20 percent of households are paying rent.

Landlords have changed over time. There has been significant growth in the private rental sector as a proportion of the total rental sector, including more private landlords. Demographic changes have meant there is an increase in the proportion of family households and older sole people in rental housing for longer periods of time, and sometimes throughout their lifetime.

This bill is entirely necessary. It sets out some significant changes from the original intentions that Labour had for this amendment bill. These intentions set out the differences between the two parties, but we believe that we will meet the needs of tenants in a much safer and more appropriate manner. I look forward to seeing this bill in the select committee.

Hon GEORGE HAWKINS (Labour—Manurewa) : I was very pleased to see the Hon Maurice Williamson bring the Residential Tenancies Amendment Bill to the House for its first reading tonight. He spoke about another bill this evening. I think this is the most work he has done since he arrived here in 1987. In fact, he has probably gone off for a quiet rest now. He has done far more today than he has ever done.

I am really pleased that this bill is going to the Social Services Committee, because Labour will make sure it is well scrutinised. About 44 percent of my friend and colleague Ross Robertson’s constituents live in rental houses. It is over 40 percent in my electorate of Manurewa. When so many people are in residential tenancies of various sorts, one needs to be sure that what the Social Services Committee does with this bill will make life better for many New Zealanders. At the moment, I do not think it does. However, with Moana Mackey on the select committee, things will be straightened out somewhat.

I was interested to hear the last speaker, Jo Goodhew, say that the average tenancy in New Zealand is only 15 months. That demonstrates why legislation is needed. These people are quite often the ones who are least able to protect themselves. There are some landlords who are not the best. A lot of our landlords are very good, but it takes only one or two bad landlords for the whole lot get bad press. We have many people coming to our electorate offices—and I am sure that Ross Robertson’s is the same as mine—about tenancies and bad landlords, including, unfortunately, the Housing New Zealand Corporation. I think that one of the big problems is that some tenants do not know what their commitments are. Yes, we sometimes hear that people in State houses do not look after those houses as well as they should. But that is mainly because they do not know what their obligations are, or the Housing New Zealand Corporation does not get on with repairs to its houses.

I was interested to hear what Moana Mackey said about section 35, I think it was. We have mothers with young children come into our electorate offices who are trying to escape from bad partnerships, marriages, etc., and they want help to get a State house so they can start their life over again. But quite often these people are hounded by gang members who are former partners. Who is going to stand up to a member of the Mongrel Mob and his mates, or to a member of Black Power and his mates, or any of the other gangs? In the end, these people are put under enormous pressure and I think that this is one area that the select committee will need to look at very closely.

I think there is general agreement that changes need to be made. It is the fine detail in legislation such as this that makes the real difference. When landlords go to hearings they can usually afford to have the best of advice. However, a lot of tenants cannot. That means that quite often wealth determines the outcome. I think we also need to remember that when we talk about the obligations of people renting properties, we are often talking about the poorest people in New Zealand. Yes, many people dream of owning their own home, but the reality for many is that that is not an option. If these people fall victim to bad landlords, then the whole family suffers. It is interesting to note that people want stable, quality housing whether they rent it or own it. If we want good families in New Zealand we have to make sure that there is stable, quality housing available for all New Zealanders.

People want security in their housing. People want stability in their housing. That is why I was somewhat alarmed when the last speaker said that 15 months was the length of the average tenancy. That seems a very, very short time. But when one looks at some electorates and sees the turnover in population in areas where there are a large number of rental homes, such as in Manukau East, Māngere, Manurewa, and Botany, we see so many kids going into schools and coming out of schools. That is something that is often very visible, and it means that a family does not have the security and the stability that it needs. Yes, it is very easy to talk about bad tenants and bad landlords, but both are a minority. We have mainly good tenants and good landlords. This bill will toughen up on some of the actual fines, etc. It is sad that we have to go to a system of fines. There are disputes over things such as the cost of water and who pays for it. Landlords can, but rarely do, impose accounts on tenants for which those tenants are not responsible under their tenancy agreements.

So it is very important that the bill goes to a select committee. Landlords will come along and make their submissions. Many of the people who live in rental properties will not do that. They possibly will not even know about it. But, luckily, we have some groups in the community that look out for these people. Usually they are volunteers, although on Thursday they will probably find out that they will not have so much money to do that work any more. It is important that these people are heard by the select committee. I hope it will not be a rushed job where, if there are lots of submissions, people are given only 5 minutes to speak. We saw that with the submissions on the Resource Management Act, when people were limited in the amount of time in which they had to put forward their submissions. It is really important that this bill is sent to the Social Services Committee. I will conclude by saying again how good it is to see that the Hon Maurice Williamson, who has been here since 1987, had his big day today.

SUE BRADFORD (Green) : Way back in the 1999-2002 Parliament, I sat on the Social Services Committee and heard submissions on a Residential Tenancies Amendment Bill that for the first time aimed at providing better protection for landlords and tenants, especially in boarding-house situations. Our committee travelled the length of the country to hear many submissions, and spent weeks on consideration of the matters involved. Then the bill simply disappeared into thin air, never to be seen again. I thought that this was a great pity after all the work that MPs, officials, and submitters—and there were many of them—had done on it. So it was with surprise and interest that I noted the return of a Residential Tenancies Amendment Bill—at last—to Parliament, under Labour last year, and now a different version of the bill this year with National. In a qualified kind of way, I look forward to going through the whole process again, albeit with somewhat different raw material to work with than the first time around.

The Green Party is sorry that some of Labour’s original provisions have been lost—for example, agents losing the right to charge a letting fee, a limit on tenants’ liability for property damage, and allowing for payment for professional tenant advocates at tenancy tribunal hearings.

The latest manifestation of the bill is complex, proposing a large number of amendments to the Residential Tenancies Act. The Green Party supports some of these amendments. For example, there is clarification of a whole lot of comparatively minor matters such as provisions relating to the address for service of documents relating to tenancies, the fact that landlords must give a reason for terminating a periodic tenancy with fewer than 90 days’ notice, the provision that an agreement for sale and purchase must be unconditional before a landlord can give 42 days’ notice, and the requirement that a landlord who is overseas for more than 21 days has to appoint an agent.

However, the bigger issue here is that once again the Government is moving to bring boarding houses under the residential tenancies legislation—something the Green Party has always supported. Although we welcome this first step, we are also concerned that the bill’s provisions are woefully inadequate in so far as providing security of tenure for boarding-house residents is concerned. In terms of the bill as it has evolved now, the devil is in the detail. For example, the provisions for landlords to give notice of termination of boarding-house tenancies risk increasing homelessness. The bill provides that a boarding-house landlord can give 28 days’ notice of termination for no reason at all, and we believe that tenants deserve greater security of tenure than this implies.

Clauses permitting a boarding-house landlord to end a tenancy with no notice period whatsoever if the tenant merely threatens to cause disruption to other tenants are potentially subject to abuse. Many people who live in boarding houses are among the most vulnerable in our society. They are often under financial stress, and at times coping with physical, mental, or intellectual impairment. Boarding-house residents deserve the same sensitivity—and in same cases even greater sensitivity—from the law and from landlords that other citizens receive, because of these vulnerabilities. I do not think they should be subject to immediate eviction just because in a heated moment they have, for example, made a comment threatening disruption.

The 48-hour termination of a boarding-house tenancy if the tenant is more than 7 days in arrears with the rent is also unduly harsh. There are times when tenants will get behind with their rent—for example, because of difficulties with Work and Income. Often enough, this is because of problems caused by the department rather than by the beneficiary. Such issues can take time to work out, and I can see no reason why the 3-week arrears requirement that applies to other residential tenancies before a tenancy can be terminated by the landlord should not apply in the case of boarding houses.

Provisions in the bill concerning the termination of a residential tenancy following the death of a tenant do nothing to improve the current situation where a caregiving relative is suddenly evicted from his or her home following the death of a family member for whom he or she has been caring. Relatives of a tenant in these circumstances deserve, I believe, to have at least some security of tenure when the tenant dies, even if this is under tightly limited conditions.

The bill continues, and increases from $3,000 to $6,000, the monetary threshold for the right to legal representation in the Tenancy Tribunal, and carries on with the current unfair provisions that permit a corporate landlord to be otherwise represented by an experienced tenancy manager. At the same time the tenant, who often knows little or nothing about tenancy law, and may well have English as a second language or literacy difficulties, is forced to represent himself or herself. This places many people at an unfair disadvantage in Tenancy Tribunal proceedings in a situation where the power imbalance is already significant.

I hope that during the select committee process, and when the bill comes back to the House, some of us may be able to persuade a majority of members to amend the bill in a number of areas in ways that will significantly improve it, including making provision for tenant advocates as the Labour bill originally intended. Indeed, the Green Party would like to have seen a bill before the House tonight that was much closer to Labour’s original bill. We would also like to have seen the shifting of standard tenancy conditions towards more secure and predictable tenure arrangements, and the provision of a simple legal framework for long-term as well as short-term tenancies. We are sorry that the bill does not make more progress in this direction.

However, on balance the Green Party has decided to support the bill through its first reading. I will put my energies into listening to submissions and, hopefully, working with others to ensure that this bill comes back to the House in an improved form before too much time goes by.

In the time since the first version of this bill came before Parliament all those years ago, a lot has changed in the housing situation in this country. More than a million people rent around 450,000 properties at this time, and the proportion of those of us renting as opposed to those living in their own homes is increasing constantly as homeownership continues to be impossibly out of the reach of many. At a time like this, it behoves all of us in the House to work together to improve the legislative framework around the residential rental market, for the protection of owners and tenants alike. I hope that a spirit of fairness and justice will underpin our consideration of this bill, as we move towards a society in which renting becomes much more the norm than it was in earlier generations, and in which it will become even more important that equity and clear process underpin all legislation in this area.

DAVID GARRETT (ACT) : I rise to speak on the first reading of the Residential Tenancies Amendment Bill. It is a pleasure to take a short call on the bill, which will hopefully go some way towards rebalancing the relationship between tenant and landlord. The Act that this bill amends, by modern standards, is a fairly ancient one. The Act was passed in 1986, and from my memory this is the first time it has been amended. In 1986 we had the Lange-Douglas Labour Government, and the Act was a beacon of simplicity and good drafting in its time. But as speakers on both sides have said, the market has changed and the nature of renting has changed in the 23 years since the Act was passed.

This amendment bill began life under the previous Labour Government but was withdrawn by the Minister who is now in charge of the bill, the Hon Phil Heatley, for very good reasons. It has undergone a substantial rewrite, and I commend the Minister and his officials for the work that has gone into improving it and for discussing with our staff the changes proposed.

I will point out one particular aspect of Labour’s original bill that was removed. But before I do so I will touch on the speech of the previous speaker, Sue Bradford. Although she carefully couched the relationship between tenant and landlord as not being a one-sided relationship, and said there were some bad tenants as well, the landlord and tenant relationship is sadly often portrayed by members on that side of the House as the landlord being a horrid Victorian chap wearing a dark overcoat and appearing out of the gloom to suck the widow’s mite for the rent that is overdue, and the hapless tenant as simply the victim of big, bad Bill the landlord. The reality, of course, is very different. There are big, bad tenants as well. I am afraid I do not have too much sympathy for gang member tenants who might be subjected to changes under Housing New Zealand Corporation policy, but I digress slightly.

The part that has been removed from the original Labour bill is the one that limited recourse to landlords to the 4-week maximum bond in the case of damage done to the property. Four weeks does not represent a lot of rent, and if that provision had stayed in, the landlord would have few avenues for recourse if the tenant left the property in a more damaged state than a 4-week bond could cover. It is not hard to do such damage. Sadly, Mr Taito Phillip Field is no longer in Parliament to tell Labour members of some of the perils of owning rental properties, but if members opposite had listened to property owners in their electorates, they would have heard grave concerns being expressed about that part of the bill.

Most people in this country who invest in property are not the stereotype we think of when we hear the term “property investor”. In fact, I believe that even some Labour members are property investors, in the sense that they own a nest egg rental property. People who invest in property are, by and large, mum and dad investors, as the Minister said in his speech. They own their own home and one additional property—or perhaps two if they are really entrepreneurial—which is their primary investment, their nest egg, and their security for retirement. All too often those nest eggs are wrecked by unruly and uncaring tenants.

We will not hear it said from members on the other side, but it would break members’ hearts to hear some of the stories of landlords, of reasonable people, whose lives have been ruined by their tenants—tenants who have gutted flats of all fixtures and fittings and have even removed the floorboards, tenants who have turned their houses or flats into tinny houses or P labs, and tenants who have ruined the property’s market value by damage or criminal activity. Labour’s provisions would have made it difficult, if not impossible, for landlords to seek further compensation. For that reason, I am very pleased that the Minister the Hon Phil Heatley has recognised the challenges that so many landlords—the mum and dad investors in this country—face. I am happy to speak in support of this bill on behalf of the ACT Party. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Deputy Speaker. Kia ora tātou e te Whare, e hoa mā, i tēnei pō. The housing market has traditionally been one of the key markers of well-being within society. Some reports indicate that citizens advice bureaux deal with about 60 tenancy-related inquiries a day, the bulk of those being about tenancy agreements, disputes, and bonds. For Māori, the rights and responsibilities of tenants and landlords is a particularly relevant area for review, in the context of declining rates of homeownership. Using 2006 census data, it can be seen that only 6.7 percent of the number of those who own or partly own their homes are Māori—some 29 percent of the total Māori population. This is a dramatic drop from the data of 2001, where the homeownership rate for Māori was 48.1 percent of the Māori population. The Māori Party is therefore particularly concerned to look out for the life situations for some 67 percent of Māori who rent their homes.

This bill is set up to care for both sides of the tenancy relationship, as other speakers have talked about—encouraging stable tenancies in decent homes, while also enabling landlords to better manage them. The passing of the Residential Tenancies Act, about 23 years ago now, provided the entry point for tightening up the rights and responsibilities of tenants and landlords. But there were some notable and glaring omissions, particularly in relation to those living in boarding houses, who continued to move regularly and had few protections in place.

During the process of researching this legislation, I came across a number of horror stories. There was the case of a landlord who insisted that one of his boarders, a female migrant, should share a room with a new male boarder. She refused and moved out immediately, but without being given her bond back, because the landlord stipulated that he needed 2 weeks’ notice. There was also the case of the boarder who was informed that the boarding house he lived in was being sold. His landlord wanted him to sign an agreement to stay there for a fixed period, and to direct his sickness benefit into the landlord’s bank account. On the other hand, there are cases of tenants causing all sorts of havoc to properties, such as in Dargaville a couple of years ago when a tenant accidentally burnt a house to the ground while attempting to manufacture P.

We in the Māori Party will support any moves to review tenancy laws and will seek to ensure that an appropriate balance between tenants’ and landlords’ rights and obligations is provided for in law. We are pleased to be extending the protection of the existing Act to boarding houses. Boarding-house tenants and general residential tenants are not vastly different, yet it would appear that for far too long boarding-house tenancies have been afforded fewer rights than general residential tenancies. We know that many boarding houses are often poorly funded and poorly resourced, with very little private space, and tenants usually share kitchens and bathrooms. Boarding houses may be run down and unsafe, with little security. Our young people are often particularly vulnerable in such settings.

The protections are quite specific, and include health and safety standards, security, house rules, access to advice, information and disputes resolution services, and the requirement that minimum rights and obligations are clear, adequate, and readily enforceable. This is a very positive step, long called for by housing advocates. The Coalition to End Homelessness has recommended that there is a need to improve the standard of boarding houses in New Zealand, a standard that is generally very poor.

Any useful definition of homelessness must include those people who move from one form of insecure accommodation to another, and those living in inadequate boarding houses, as well as those living on the streets. We are pleased that an initiative has been established to provide some support to our more vulnerable. The bill will enable a staged implementation, to allow time for the education of boarding-house landlords regarding the new provisions, which we think is good. Housing New Zealand Corporation is also planning to meet with community organisations, and with tenants, to advise them of the changes. Both decisions suggest that the Minister is committed to giving the affected communities time to consider the implications of this bill.

The bill also introduces provisions to better protect tertiary student tenants in student accommodation. The bill proposes that tertiary education providers will be required to have agreements with accommodation providers that include disputes resolution processes. Accommodation providers must also have appropriate house rules in place, and ensure that student tenants have access to them. In our approaches to the New Zealand University Students Association and Te Mana Ākonga, the National Māori student body, we were told that there have been too many incidents where private accommodation providers for tertiary students have not treated their tenants fairly, and have offered accommodation with low service provision, of poor quality, and with inadequate safety and security. This bill, therefore, provides a better level of protection for tertiary students staying in student accommodation provided by private providers.

The bill also sets in motion some changes that we consider are about making the legislation work better. It introduces clearer processes for terminating and reviewing tenancies, it will encourage landlords and tenants to comply with their obligations, it seeks to improve the enforceability of Tenancy Tribunal orders, and it will supposedly provide for the majority of tenancy disputes to be resolved quickly, fairly, and cost-effectively.

But this is where we have one of our major issues with the bill. There was a commitment in the Government’s response to the report of the Commerce Committee on the inquiry into housing affordability in New Zealand that the Government will work to ensure that New Zealanders are able to access affordable rental housing. We asked where affordability fitted in when the threshold rose. The bill introduces a new threshold of $6,000 for the automatic right to have legal representation at the Tenancy Tribunal. We believe that this is a very high threshold. For many of the constituents I have to deal with, $500 would be large enough. We think that that is worth some consideration. Although we understand that tenants and landlords can apply for this right if the situation is complex, or if there is a disparity of inexperience and resources between the parties, the onus is always on the individual having the required level of knowledge and confidence to put forward his or her case. For us, the key question is how the Residential Tenancies Amendment Bill will improve the fairness and quality of residential tenancies.

I have to say in closing that we will support this bill at its first reading, because we believe a number of positive provisions have been introduced to enforce the rights and obligations faced by tenants and landlords in tenancies. We will be listening keenly at the select committee to see whether these provisions are sufficient to make the changes we need to achieve affordable rental accommodation that balances the rights of both tenants and landlords. Kia ora tātou.

CHRIS TREMAIN (National—Napier) : I rise to support the Residential Tenancies Amendment Bill, and to recommend it to the House in its first reading. Thank you.

Dr RAJEN PRASAD (Labour) : I am thankful for the opportunity to speak in the first reading of the Residential Tenancies Amendment Bill 2009. As the Minister for Building and Construction said, the housing market has changed dramatically and there are any number of different types of arrangements available to people to use the rental market for their needs. It is time to update this legislation. In doing so, we should keep in mind that we are talking about the one place in our lives that gives us stability. It is the one place we all try to create where we can house our children, be ourselves, and develop a base from which to participate in society. It is one place where we can be safe and make sure that our loved ones are safe as well. This is also the base from which we as individuals, friends, and families care for each other. From there we care for our family members, those who come to visit us, our elderly, and those who might need us in different amounts from time to time. Therefore, our home is very important and it is no less important for the individual, family, or couple that enters the rental market, for whatever reason, whether by choice or by need.

John Hayes: Or caring landlords.

Dr RAJEN PRASAD: I will come to that. So it is very important to us from the point of view I have just described.

The home is important to the tenant, and the home, in all of its complexity, exerts very powerful influences on who we are, on our lives, and on our successes. At the same time a person who saves money, decides to purchase a property as an investment, and makes it available to a tenant—whether the tenant is a family or an individual—has also made sacrifices, and he or she is entitled to expect a fair return on their investment. Those are the two sides of the rental market in all of its forms. Stripped of all of its complexity, there are two competing needs. One is for the investor to get a fair return and to make sure his property is well provided; secondly, there is the need for the tenant to continue to live and do the things from their base that we all take for granted. Our tenancy legislation provides a fair balance between those two needs. This amendment bill establishes those rules and clarifies the responsibilities for each party. So the bill has many very good provisions, and it addresses the changes that have taken place in that particular market. For example, protection is extended under this bill to those tenants who live in boarding houses. We had not thought about them for a long time, and the boarding houses that I remember from when I visited many people living in them, both in my professional life and in my student days, were a very mixed bag. The protections of this bill will be extended to that environment as well.

The bill also clarifies responsibilities for outgoings by introducing overarching principles to indicate when landlords and tenants are responsible for charges such as rates and electricity. The bill introduces a clearer and fairer process for terminating and renewing tenancies to provide an appropriate balance between flexibility and certainty of tenure. So there are many good things to manage that tension between the needs of the tenant and the expectations of the landlord. The bill encourages landlords and tenants to comply with their obligations under the Residential Tenancies Act by increasing the value of existing fines and exemplary damages in producing new censures. It provides for the majority of tenancy disputes to be resolved quickly. There are many provisions that are very useful.

We know that things can go wrong in tenancy agreements. When they do, we require a fair process by which those disputes can be resolved. The proposals here do not give me the confidence that, for example, there is sufficient assistance by way of advocacy for a tenant who may or may not be in a position to deal with the kinds of difficulties that arise, and whether we have given enough thought to that particular situation. I am pleased that the bill will go before the Social Services Committee, and we will be looking to see whether the balance we seek between those two sets of competing demands is there and whether the provisions are tilted towards the interests of one and not the other. For example, turfing anybody out of a home for whatever reason is a very serious matter, and it is not just an economic consideration that needs to be put in place. A system needs to occur that tries to balance those two needs. It ought to address the various aspects of that balance.

So what systems are in place? We need to inquire into those systems. Some are proposed in this particular legislation, but are they the right ones? Certainly, as a member of the Social Services Committee, I am interested to see what those who have more experience in the contemporary market are saying about this. What are the more modern ways of solving disputes? When a landlord turfs out a family with children, for whatever reason—whatever it is that the adults have done to compromise the living environments of the vulnerable members of the family—then in a decent society we balance their rights with those two means. We should try to develop a system that does not favour one side over the other. I know at times that might be difficult. Here we are, we have provisions in this bill for when somebody in the home has assaulted somebody else, and those provisions then are, in a sense, quite Draconian. Are they the appropriate ones? Are they the ones that will work? We should at least ask advocates of some sort from both sides who have conceded right from the beginning that there are these two competing needs: those of the investor or the landlord, and those of the families that occupy the residence. In a decent society the interests of both are important, but certainly the interests of the vulnerable members of a particular family are as important as those of the landlord.

In the select committee we ought to inquire beyond the proposed provisions of this particular amendment bill and into those systems, and whether they should be revamped and or improved. I shall listen very carefully to those who present from their particular experiences, and I give an assurance that it will be in the interests of the landlords and those who have made an investment as well as of those families and individuals who are likely to suffer tremendous harm if we do not get that balance right. For example, children and vulnerable women who are turfed out into the street and into worse accommodation create for us as a society a bigger bill that somewhere down the track we have to provide money for. We will have to make provisions to address their situation as well. There are some very important competing demands that we shall be looking at in the select committee.

TIM MACINDOE (National—Hamilton West) : The Residential Tenancies Amendment Bill deals with many issues of great importance to people in my electorate of Hamilton West. I commend it to the House, and I wish the Social Services Committee well in its deliberations.

Hon DARREN HUGHES (Labour) : I raise a point of order, Mr Deputy Speaker. I have been listening to the debate this evening since the House resumed after the dinner break, and I am interested to know whether, under Standing Order 261, the bill is compliant with the Standing Orders in that respect. I have not seen any evidence of that.

Mr DEPUTY SPEAKER: The Attorney-General has not presented a paper. Consequently, the bill is in order.

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Speaker. In my experience, it works the other way. The Cabinet legislation committee gets an indication from the Attorney-General, and there can therefore be an assurance from the Leader of the House that that indication has been given. There is clearly some doubt on this issue. As for how it could be solved, I am not sure whether, as has been the case in the past, the Leader of the House chairs the Cabinet legislation committee, but I can certainly remember Michael Cullen doing that at the time when he was Leader of the House. It was something that he, both in the period that he was Attorney-General—

Mr DEPUTY SPEAKER: I thank the member. I am seeking advice from the Clerk, but I will call the Hon Gerry Brownlee.

Hon GERRY BROWNLEE (Leader of the House) : Raising this issue is a time-wasting effort on the part of the Opposition. You have ruled appropriately about the bill’s compliance. Your ruling should stand.

Mr DEPUTY SPEAKER: I am seeking advice, and it will be final. As far as I am aware and as far as the advice goes, the bill is in order, and that is what I have already ruled. But I will seek advice to make sure that we are right by speaking to the Clerk, and then the ruling will stand.

The situation is that if the Attorney-General had felt that this bill did not comply with the New Zealand Bill of Rights Act, he would have presented a paper. As that is not the case, the bill is in order. We will now proceed.

CAROL BEAUMONT (Labour) : The Residential Tenancies Amendment Bill is a Government bill that reintroduces many aspects of a previous Labour bill, but with some changes that we find very unpalatable. In speaking to the bill, I indicate, as previous colleagues have said, that we will be supporting this bill’s referral to a select committee. But during that process we will be scrutinising a number of issues very, very carefully. Of course, that scrutiny will be made difficult by the shortened period of time that this bill will have at the select committee. This is an example of a number of other situations where we have seen an abuse of the select committee process by the Government. So straight up front, I again raise some concerns about the process that is being used by the Government when it is dealing with legislation.

In this particular case we are talking about legislation that is very complex and of fundamental importance. As my colleague Dr Rajen Prasad said, this bill recognises changes to the residential rental market since the Residential Tenancies Act came into force in 1986. Those changes are very, very important and fundamental demographic changes that for example, reflect the increase in the proportion of people who live in rental houses and the consequent decline in homeownership rates. As I said earlier this evening when speaking on the previous bill that was before the House, this is an issue of affordable housing. The fact that more people are in rental housing is a direct consequence of the lack of affordable housing. I explained to members opposite earlier that the previous Labour Government put in place many initiatives to try to change that trend, to make sure that housing was affordable, and to make sure we provided a range of different ways that people could purchase their own home. Certainly I would challenge the current Government to consider that matter. There is a need to ensure that housing ownership is affordable for more New Zealanders.

In preparing for the discussion on the earlier bill, I looked at a very interesting article, which I would recommend to the members opposite, called “A shortage of living room” by Geoff Cumming, and published in the New Zealand Herald on Saturday 2 May. In that article, he goes into quite a lot of analysis of what is going on with regard to the housing market, looking at a number of initiatives around affordable housing. He concludes that the Minister of Housing, Phil Heatley, must have ordered a go-slow in terms of affordable housing. And, of course, he draws our attention to the attitude of the Prime Minister, John Key, to affordable housing. In Mr Key’s own electorate he stopped, I think, 500 affordable houses being built, because he did not want them to be in his neighbourhood, thank you very much.

The lack of affordable housing is one of the important changes that have happened that require a review of the principal Act. The other change—again, Dr Rajen Prasad started to discuss this—is the increase in private sector landlords in the period since 1986. There are more private sector landlords, and many of them, as Dr Prasad said, are indeed small landlords, if you like: people who maybe have one property—like my mother—that is rented out. It is important that that is protected. That rental property is their investment, in which they have often invested their life savings. So the issue is about having a balance.

The important thing here, though, as well as having that balance and protecting the landlord’s property, is the very, very fundamental nature of housing: the fact that housing is where people live. They live and bring up their children there. Providing stable housing is something that we have long valued in this country; indeed, over 70 years ago the Labour Government brought in State housing in direct recognition of the fact that having decent-quality housing was a fundamental right for New Zealanders. We recognised that that was important. We did not want people to live in slums; we did not want them to live in squalor.

Nikki Kaye: Well, the State houses are slums. You left the State houses as slums. You couldn’t repair them for 9 years.

CAROL BEAUMONT: Well, actually, there was significant investment by the previous Government in upgrading State houses. I would be very happy to go through the statistics with the members opposite. Although I have already done that earlier this evening, if members would like me to do it again, I am happy to do so. I ask members opposite whether I should go through it again. Perhaps I could go through those statistics again, except that there are some very important—

Peseta Sam Lotu-Iiga: Come and visit them in Panmure!

CAROL BEAUMONT: There are certainly, I say to Councillor Lotu-Iiga, houses in Auckland that need updating, renovating, and maintenance. There is no doubt about that. [Interruption] We can actually agree on something; that is fabulous. We can all agree that the housing stock in New Zealand is not perfect, and there is indeed a need for greater investment. That is fantastic. Let us agree on that.

Going back to the bill, I say one of the fundamental principles outlined here is the need to provide stable housing. Now, why is that? Providing stable housing for people is important in a number of different respects. It is important in terms of people’s health. Having a roof over their heads, having somewhere to live, and not having to live outside in the elements—all of those are basic rights. There is also a whole series of social needs that go with having stable housing. They include attachment to one’s community: building up contacts, friendships, and links with community organisations. For children, having stable housing is really important, because that also provides them with stability in terms of their education. They can go to the local school, stay there, and build up their own social networks. So providing stable housing is a very fundamental matter.

This bill tries to provide clarification of the rights and obligations of both tenants and landlords, and that is important. But it is also important not to pretend that this is a level playing field. It is a bit like the employment relationship. There are two parties, but the consequences of kicking tenants out of a property are much more dramatic for them than any consequences that landlords face, as are the consequences for an employee if the employer kicks somebody out of a job. Those people lose their house or their income.

• Debate interrupted.