Hon PHIL HEATLEY (Minister of Housing)
: I move,
That the Residential Tenancies Amendment Bill be now read a third time. This bill amends the Residential Tenancies Act 1986. I introduced this bill to the House on 13 May 2009, and I am pleased to begin the bill’s final process for passage through the House. Keeping the Kiwi dream of homeownership within reach is a key focus for this Government, as many will know. That is why we are working so hard to make housing more affordable by freeing up the supply of land and reducing the red tape that has been strangling the
building and construction sector. I acknowledge my colleagues the Hon Maurice Williamson and the Hon Dr Nick Smith, who are working hard on the Resource Management Act and the Building Act in order to streamline them to make sure that red tape is indeed slashed. We are also easing the burden of interest rates by growing the economy. We do not want to see interest rates go to 8, 9, or 10 percent, like they were under the previous Government. We want people to be able to afford a mortgage. We are eliminating low-quality spending and are progressing a programme of personal tax cuts, so people can better afford a mortgage.
The reality is there will always be those who, for either lifestyle or affordability reasons, want or need to rent a place to live. Since the vast majority of families rent privately, it is important to ensure that the legislation governing the sector supports adequate private-sector provision of decent rental housing. That is why this bill is all about balance. It will enable the thousands of mum and dad landlords throughout the country to manage their tenancies and protect their investments, while ensuring that people who rent their homes have access to stable, good quality housing and the protections we would expect they would be afforded. The bill extends coverage of the Act to more people involved in renting, including the most vulnerable tenants in New Zealand: those living in boarding houses. Up until now people living in boarding houses did not have significant protections, but protections will be there now. For example, there is the provision that I spoke about during the Committee stage where boarding-house operators will now need to give 28 days’ notice for someone to move on, instead of just 24 hours.
We will clarify the responsibilities for outgoings such as water rates by introducing overarching principles to indicate where landlords or tenants are responsible for charges. We will introduce clear and fairer processes for terminating and renewing tenancies to provide an appropriate balance between flexibility and certainty of tenure, and encourage landlords and tenants to comply with their obligations; for example, by enabling the Tenancy Tribunal to award financial penalties against landlords who do not live up to their side of the bargain, and by improving the enforceability of Tenancy Tribunal orders. Just as important as what the bill amends are those features of the Act that have served us well over the years that the bill retains. When things go wrong, it is important that both landlords and tenants can access quick, low-cost, and impartial dispute-resolution services. That is why this Government is very reluctant to open up the Tenancy Tribunal so freely to lawyers, as the Labour Party suggests we should.
The dispute resolution process under this Act is an extremely exemplary example of how this can be achieved. As I said, if there is a David and Goliath situation—if the tenant is a minor, if the tenant has a disability, if we are talking about large sums of money over $6,000 or a situation where a landlord has a lawyer or an advocate—in all those cases a tenant can access advocacy, and, in many cases, legal counsel. Tenancy adjudicators have specialist knowledge of the Act and are empowered to take an inquisitorial approach to resolving disputes. It is quite different from the courts system and it is another reason why we do not need lawyers to freely enter the dispute resolution process when it comes to the Tenancy Tribunal. Landlords and tenants are encouraged to represent themselves at hearings, with the use of solicitors and representatives limited to only, as I said, where the nature of disputes brings particular disparity between the parties. This means the process is quick, cost-effective, and, most important, very, very fair.
During the consideration of the bill the Social Services Committee heard from a wide range of submitters with a diverse range of backgrounds and perspectives. That is testament to the fact that our tenancy laws affect people from all walks of life and political persuasions. Tenancy laws will always contain contentious elements, as
strengthening the rights of one party almost inevitably means reducing the rights of another. This legislation seeks to balance out things more perfectly than has been the case in the past. I acknowledge the difficult and important role that the Social Services Committee has played in ensuring that those competing interests were properly considered and appropriately balanced in the bill. I acknowledge the work undertaken by the previous Government in terms of what we are proposing to pass here today. I also acknowledge the work of the Opposition in investigating and putting forward Supplementary Order Papers or amendments that were substantial and thought out, and attempted to address issues that are real. There was no trifling with the House; the amendments put forward were worthy of consideration. Obviously we chose to vote against them for good reasons of our own, but we appreciate the debate. I thank the select committee staff, Department of Building and Housing officials, and the Parliamentary Counsel Office drafters who worked on the bill.
Most important, I thank the hundreds of landlords, tenants, and others with an interest in tenancy matters who participated in the review of the Act. By sharing their experiences, they helped shape a better bill. The reform of the Act, which directly affects the lives of around one-third of New Zealand households, has been a long time coming and I acknowledge that. It is with pleasure and satisfaction that I am able to oversee its final progress through the House. I commend this bill to the House.
MOANA MACKEY (Labour)
: It is extremely pleasing to speak on the third reading of the Residential Tenancies Amendment Bill, which has been a long time coming. I am sure all members of the House will be pleased when this legislation is finally passed into law.
The Minister of Housing said in his third reading speech that this law is all about balance, and he is absolutely right. But with the greatest of respect, I say that I do not believe he has that balance quite right. There is absolutely no doubt that the law we are passing in this House today—or whenever it finally ends up being passed—is far better than the status quo, and Labour will be supporting it for that reason. But the Minister had the opportunity to make the lives of the hundreds of thousands of tenants in New Zealand a lot easier by inserting a few simple amendments, and I am very disappointed that he chose not to do that.
People who rent their properties do not have security of tenancy. It is not like people owning their own home, where they know that they are in it and no one can make them leave it with 90 days’ notice. They face enormous pressures; rents are going up. I had a letter from a Housing New Zealand Corporation tenant today. Someone on the minimum wage under National’s tax cuts will get $3 extra a week. Members should guess how much this tenant’s Housing New Zealand Corporation rent is going up. It is going up $3 a week, and that is not even including inflation. When we factor in inflation, she is far, far worse off. Even if we pretend that inflation and the GST increase do not exist, her tax cut of $3 has already been swallowed up by a $3 increase in her Housing New Zealand Corporation rent. She is worried. It may seem like a small amount of money, but that is what we are talking about with the 30 percent of New Zealanders who rent, the majority of whom have a combined household income of less than $50,000. The Government should be protecting these people, not taking protections away from them, as that Minister did when he amended the legislation that Labour put in place.
The Minister mentioned boarding-house tenants, and he is quite right when he says that it is incredibly important that they come under the protection of residential tenancy law. But I say to the Minister that the job is not done. It is all very well to say that they now they have the protection that someone can evict them only with 28 days’ notice instead of 24 hours’ notice. But those boarding houses are filthy, and disgusting in
many cases. I spoke to one of the councils here in Wellington, and I was told that prior to the 1991 changes to the Building Act, which the previous National Government put through, councils were responsible for boarding houses. They had to know where they were. They could go in and check them as multi-residential dwellings. They had to make sure that they were in a state fit to be lived in. That responsibility was taken away from councils with those 1991 changes. The Minister may not know that; I did not know that until the council told me.
The fact is that a lot of councils do not know where these boarding houses are. They are disgusting, and a number of them do not even have running water. Unless someone points it out to the council, something may never be done. The tenants will not do it, because they are usually vulnerable people who do not know that they can just go to the council if they do not have running water. The Wellington Central MP, Grant Robertson, pointed it out to the council. The council thanked Mr Robertson and said that now it knows it is there, it is going to go in and make sure it is fixed, given its limited public health role, and keep an eye on it. But it should not have to be like that. It should not be that some of our most vulnerable citizens rely on the Coalition to End Homelessness taking MPs around to show them the parlous state of boarding houses for action to be taken. The journey for reform in the area of boarding houses has only just begun, and Labour will be more than happy to assist the Minister on that particular journey.
I come to the amendments that were unfortunately voted down in the Committee stage. When we talked about boarding-house tenants, the Minister alluded to the fact that over the Sevens in Wellington boarding-house tenants were evicted en masse. I put up an amendment in the Committee stage that would have made that illegal and said that for a major event like the Rugby World Cup, it is not OK to evict boarding-house tenants—or, indeed, any other family—from their home for the purpose of making a quick buck. The Minister chose not to deal with this serious issue. He does not think it is serious enough; he thinks it is OK that someone can be given a 90-day notice. The point is that although boarding-house tenants will have to be given 28 days’ notice of eviction, landlords have had more than 28 days’ notice of the Rugby World Cup. They have told their boarding-house tenants already that they will have to get out over the Rugby World Cup. Private sector rental tenants have been told that they will be issued a 90-day notice and will have to get out over the Rugby World Cup. I am shocked that the Minister of Housing thinks that is OK and should be allowed to happen. I am very, very disappointed in him in that regard.
When it comes to the issue of letting fees, it is hard enough for tenants to get into housing nowadays, without the Government putting more and more hurdles in front of them. Labour thinks it is only fair that if landlords want to hire a property management organisation to market their properties, they pay for it—not the tenants. Apparently the National Government does not think that that is the case.
When it comes to the Tenancy Tribunal, I acknowledge that in all those situations theoretically one can get representation, but I say to the Minister to go and talk to the tenancy advocacy groups, which will tell him that it is not happening. People are being denied representation in the Tenancy Tribunal. It seems simple to say that across the board tenants can have representation, because we know that in many cases it expedites the process. It stops tenants from being vexatious when they feel they are not getting their own way, or when they start to panic that they do not know the points of law and do not necessarily know their rights. But more than that, the Tenancy Tribunal has the power to remove people who are being vexatious. So if the Minister is worried that a tenant advocate will go in and start to try to drag out the process or slow it down, the Tenancy Tribunal—and he did not mention that it has this power, because it did not suit
his argument—is able to remove tenants if it feels that they are not conducive to the process.
As he says, and I completely agree, this process is meant to be fast and cheap. In fact, the situation the Minister outlined, where tenants have all these rights to representation, sounds good. But I say to the Minister that it is not happening. Very, very vulnerable people are being denied representation at the Tenancy Tribunal.
Dr Rajen Prasad: Does he care?
MOANA MACKEY: I hope he cares. I hope this is not just an exercise in saving face and not wanting to vote for a Labour Party amendment.
On the issue of the level of the threshold, I say that $6,000 is a lot of money to a boarding-house tenant. To say that a tenant has to be able to meet the threshold of the monetary claim being worth $6,000 or more is ridiculous. They will never get there. That is la-la land stuff for some of the most vulnerable tenants that we are talking about. So it is extremely disappointing that the Government is lifting the threshold from the current level of $3,000 to $6,000. It is even more disappointing that it is not prepared to remove that threshold altogether and make sure that the Tenancy Tribunal is a fair forum for everyone, including those who are not familiar with that process or not able to adequately represent themselves.
When it comes to the issue of cleansing orders, the most astonishing thing was that I was arguing to put back in a clause that the Minister himself put in the original bill. This was Minister Heatley’s clause in the Residential Tenancies Amendment Bill. I have never heard such an eloquent destruction by a Minister of his or her own clause before. He got up as though he had never seen it before and failed to mention that he put that clause into the legislation. At some point in history, Minister Heatley thought that it was important that tenants be told about methamphetamine labs and whether cleansing orders had been put on properties. I do not know who got to him in the meantime. The Social Services Committee made a decision that we would take the clause out; it was a rushed decision because the select committee was rushed. Subsequent to that decision I have seen overwhelming evidence that it is not as clear-cut as the Minister made out. The practices across councils are not uniform, and they are not policed. They are not at the level that the Minister seems to think that they are.
The Minister also failed to address how a tenant will afford $300 for a land information memorandum in order to find out whether there is a cleansing order that they have no idea is there. On a whim, tenants—who have also had to pay a letting fee, because the Minister thinks that they should have to; who have also had to pay a bond; and who have also had to move all their stuff—will now have to go to the council because they are worried the property might have been a methamphetamine lab. They have to be prepared to chuck down $300 on the off chance that there was a cleansing order on the property for a methamphetamine lab. All we said was that the tenant has to be told that this happened and be shown that it has been cleaned up. More than that, I improved the Minster’s clause. I spoke to the property investors and asked them how they felt about this. They said that they would rather we stuck with what the select committee did. But at the select committee we said that a 5-year time limit would be fine. We did not think that people should have to be told for ever; we thought that 5 years would be a fair time limit. If there was a cleansing order in the last 5 years, tenants would have to be told. It saves everyone money. It means a tenant does not have to fork out hundreds of dollars for a land information memorandum that they might not even need. Let us be honest: in this tight housing market where it is really hard to get a property, when tenants finally find a place they can afford, how many will want to wait however many days it takes to get a land information memorandum and then find the
money to pay for it? It is astonishing that the Minister voted against his own original contribution to this legislation.
This is very good legislation, overall. It is not as good as the one we put up; it is a shame that the Government watered it down. This is a missed opportunity.
