Hon PHIL HEATLEY (Minister of Housing)
: I move,
That the Residential Tenancies Amendment Bill be now read a second time. I introduced this bill into the House on 13 May 2009. The bill amends the Residential Tenancies Act, enabling landlords to better manage their properties effectively and helping to ensure that tenants have access to stable, good-quality accommodation.
The bill has now been considered by the Social Services Committee, ably and constructively chaired by Katrina Shanks, my colleague. I would like to thank the committee for its robust consideration of the bill and for expediting the passage of the bill through the select committee process. The bill is very complex legislation. There are a number of issues that had not been debated since legislation went through Parliament over 20 years ago. I also acknowledge the submitters who took the time to make written and oral submissions to the bill during the select committee hearing.
The Residential Tenancies Act regulates the residential rental market. The structure and composition of the residential rental market is changing. Increasing numbers of families, children, and older people who historically had high homeownership rates are now part of the rental market. About one-third of New Zealand households are living in rental accommodation, and it is predicted that by 2016, 456,000 New Zealand households will be renting.
The growing rental market means that it is becoming increasingly important to make sure that our tenancy laws are up to date, that they are unambiguous, and that they are responsive, and we need a regulatory regime that reduces unnecessary costs, promotes equity, and facilitates the future provision of rental housing.
Changes to the Residential Tenancies Act had been proposed by the previous Government as early as 2004. It saw that we needed changes. Unfortunately, no tangible progress was ever made. Meanwhile, the sector has been left in limbo. This National-led Government is focused on progressing modifications to this legislation to actually make the changes happen—not just to talk about it—and to give certainty to a sector that has been waiting for years for amendments to be made to this very important Act, which affects many, many New Zealanders.
This Government wants to see landlords being able to manage their investment portfolios in a way that optimises their returns but is responsive to demand. This Government wants to see tenants having access to suitable rental accommodation and being able to make informed choices about where they live, how long they live there, and what, exactly, they are paying for. We want landlords and tenants to be clear about their rights so that they are empowered to act. We want landlords and tenants to take a responsible approach to their obligations to each other, to the people they share their homes with, and to their neighbours and the wider community. We want to see a rental market that is efficient, responsive, and well informed, and this legislation certainly goes a long way to creating that vision.
One of the main initiatives in this bill is to provide protections for some of the most vulnerable tenants in New Zealand—those who live in boarding houses. They are currently not covered by tenancy legislation, but this bill brings boarding-house tenancies under the umbrella of the Residential Tenancies Act so that the minimum rights and obligations of people living in boarding-house accommodation are clear, adequate, and readily enforceable. It was dreadful last year to see the media coverage of people living in boarding houses, particularly in Auckland, that were substandard. They were grotty, they were slum conditions, and those tenants were not protected.
I personally believe that this provision is the most important part of this legislation. It will cover those vulnerable people in boarding houses who are often transient, who are often on low, low incomes, and who are often in search of more formal and permanent accommodation. It is very, very important indeed to cover them while they are in boarding-house tenancies. In fact, much of the overcrowding in houses out in the general sector, in the suburbs, is due to the fact that many of these people refuse to go into the slum conditions of some boarding-house tenancies. Now they will be protected, and they will be more willing to take on the opportunity to live in a boarding house, even if only for a short time.
I would like to take the opportunity to outline some of the other main initiatives. This bill will extend the Act’s coverage to more people involved in renting. It includes access to advice, information, and dispute resolution services. It will clarify responsibility for outgoings, such as rates or water rates, by introducing overarching principles to indicate where landlords or tenants are responsible for those charges. It will introduce clearer and fairer processes for terminating and renewing tenancies in order to provide an appropriate balance between flexibility and certainty of tenure, and 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 some new sanctions.
Members will know that the Tenancy Tribunal plays an important role in the sector in adjudicating in a low-cost and speedy manner. This is helped by the fact that parties mainly represent themselves. However, where there is a significant disparity between parties, or where someone is unable to present his or her case adequately without assistance, then the party may use representation to assist. That is a good thing. This regime is fair, supportive, and helps keep costs down for everyone. The bill includes measures to ensure that most tenancy disputes are resolved quickly, fairly, and cost effectively, and measures to improve the enforceability of Tenancy Tribunal orders. The most vulnerable will most certainly be protected in the Tenancy Tribunal. As I have said, there are opportunities for them to get representation.
The Social Services Committee has recommended changes to the bill that will assist landlords and tenants in very practical ways. The changes streamline the process for managing goods abandoned by tenants at the end of a tenancy so that time and costs involved are reduced while still providing tenants with a reasonable opportunity to collect their goods. They allow letting fees to be charged by all letting agents—not just
real estate agents, as is currently the case—to create a level playing field for all property professionals working in the business, and to improve competition. We foresee that many property managers will not, in fact, charge letting fees at all as something to offer clients in a competitive environment.
The bill will now not require landlords to disclose to prospective tenants where premises have been subject to a cleansing order; for example, where a house was once contaminated by the manufacture of P. This will reduce potential costs for landlords while retaining existing protection for tenants, and has been deemed by the select committee to be appropriate. That is to say, when a house has been used for the manufacture of P, it gets a cleansing order. The police have to tell the council, the local council issues a cleansing order, and the house has to be decontaminated. That is a protection for tenants living there.
Lastly, the bill will make more equitable the process of terminating a boarding house tenancy for rent arrears by giving boarding house tenants greater opportunity to remedy rent that is owing before a tenancy is terminated. I once again thank the Social Services Committee, chaired by Katrina Shanks, for its thorough consideration of the bill and for its pragmatic recommendations for changes to the bill. I commend this bill, as reported back from the Social Services Committee, to the House.
