Regulatory Systems (Building and Housing) Amendment Bill

It has been an interesting debate on this Regulatory Systems (Building and Housing) Amendment Bill. I think some good questions have arisen in the course of the debate. We have spent some time talking about the changes to the Building Act, which are largely technical clarification issues—fixing some cross-referencing errors—but, really, the meat and potatoes in this bill are all to do with the Unit Titles Act. It is a little strange to be debating some relatively minor and technical issues when there is such a big review going on of the Unit Titles Act, and some glaring problems that need to be dealt with by that review. Nevertheless, there are some important issues in this.

I heard my colleague Clare Curran talking about clauses 25, 26, and 27, which contain matters that the Law Society had quite a lot to say about at the Local Government and Environment Committee, particularly in relation to the addition of sections about dealing with the reference to easements and covenants. We heard from Ms Curran the views of the Law Society on that, and, in particular, about the idea that common property should not be affected by the redrawing of boundaries, and so on.

Those are the kinds of issues that we dealt with in the course of the discussion. There were a number of others that were dealt with. We also talked quite a lot in the course of the debate about dispute resolution for bodies corporate and whether or not the Tenancy Tribunal is fit for purpose. The committee spent some time discussing whether or not the Tenancy Tribunal and the various restrictions on the tribunal’s ability to award damages in relation to the Unit Titles Act—disputes that have come to the tribunal under the Unit Titles Act. As we know, most of those issues are going to be dealt with by the wider review.

I think, probably, that is all I will say in wrapping up, other than to say that Labour is supporting this. We are willing to go along with the various technical adjustments and clarifications that make up this Regulatory Systems (Building and Housing) Amendment Bill.

I just want to talk about the commencement date on this and just ask the Minister in the chair, Michael Woodhouse, some questions. The Minister, when he stood up a couple of calls ago, said this is not quite an omnibus bill; it is little more than that. I think it is significantly more than that. It really does affect unit title holders—apartment owners. That, as we know, is becoming the predominant form of housing, because they are a little bit cheaper than buying your grassy knoll in Remuera. But I am wondering—

💬 Hon Member: Grassy knoll?

Ha, ha! This Act comes into force immediately after the expiry of the 2-month period that starts on the date of Royal assent. This is, I am assuming, going to get Royal assent before the election. This is going to get pushed through. It is this hard-working Minister who has taken on this portfolio and wants to see some action after doing nothing in tax. But what I do wonder is whether you considered, Minister, just pushing this out a little bit. The reason I say that is we all know that there are a number of apartments being built all around the country—and not just in the Christchurch rebuild but all around Auckland and everywhere—because the returns are high, the demand is substantial, and the prices are relatively low. So I wonder whether the Minister thought about delaying this for a couple of years, because people will have already made decisions based on the current law.

I know that there has been consultation on this, and I know that Phil Twyford has done a hell of a lot of work around this area of housing and construction, but my concern about this sort of bill is that there will be unintended consequences, and I wonder what the unintended consequences will be for people who have put down their deposits and looked at their unit titles, etc., etc., and found: “Oh, goodness me! Hold a sec—the real estate agent didn’t tell me that this changes when a new law comes into force.” In fact, I am assuming the real estate agents would have had to inform them, because it would have been illegal not to. But was there any thought of any unintended consequences, or any thought of delaying this by 2 years with the ability to signal this was coming on so that anyone buying into a unit title now would have time to digest what was happening, and anyone who was looking to buy into a unit title could actually assess and understand the new law before they paid the deposit over or before they actually occupied it? There are a whole lot of rules about unit titles, there are a whole lot of rules about bodies corporate, and there are a whole lot of rules about a whole lot of different things in here that will affect, I think, the predominant form of new housing going forward.

So that is all I have really got to say. It is not a big one; it is just a question. But this is very definitely more than an omnibus bill, and to pass it off as such, I think, does a little bit of a disservice to people in the building and housing sector. It also does a bit of a disservice to those who are interested in the sector, because just to say “Don’t worry about this, there’s nothing to see here, it’s only a small bill. You don’t have to worry, it’s not going to change the way you do things terribly much.”, well, I do not think that is right. I think we should actually treat the people who are buying into these schemes, who are developing these schemes and who are part of them, with a little bit more respect than just saying “Don’t worry, nothing to see here, move on—it’s an omnibus bill.”, because it is substantially more than that.

But, as mentioned, just to reiterate the one question: did the Minister actually think of doing some sort of retrospectivity—which we have seen a lot recently in tax legislation—or of delaying it by a year or two, which, again, we see in things like tax legislation? Thank you very much.

Speaking to clauses 1 and 2 of this particular bill, the Regulatory Systems (Building and Housing) Amendment Bill, which is part of the three omnibus bills being debated in the House, I can inform my colleague Stuart Nash, who just spoke, that the reason this bill is going forward and needs to be passed as quickly as possible is that the next bill that we are going to be debating contains a clause that requires it to be passed by 31 March—which is actually the end of next week—because of the provisions in it for retentions, in the case of businesses going down the drain in the construction industry. I digress, but there is a time factor involved in this piece of legislation. It is an important time factor, and that is why we are hurrying it through—or why the Government is wanting to hurry it through.

I also want to thank Minister Michael Woodhouse for getting up and speaking to my concerns around clause 25 and for his remarks around it being an omnibus bill that has a little bit more in it than a statutes amendment bill but does not address issues of substantive policy. Can I just make the comment, then, that—and I return to the issue around the easements and covenants—the amendment in clause 25 enables an infrastructure company to acquire sufficient rights over unit title developments for construction, operation, and maintenance of its water and wastewater pipelines. That does not sound to me like just an insignificant amendment in an omnibus bill. It actually sounds quite significant. It is an enabling clause. It allows for an acquisition. But what it does not provide for, and this is the converse to it, is that it limits the security of tenure normally enjoyed under an easement, and so it limits Watercare Services’ ability to adequately protect its pipelines—and not just Watercare Services, obviously, but other infrastructure companies that are undertaking work.

It deals with the acquisition of easements, but those easements, as was pointed out in the submissions on this, do not last for ever, because apartments, terraced houses, and other complexes might be demolished, destroyed, or might just reach the end of their useful life, and, in those situations, the unit title plan is likely to be cancelled, which reverts the land to freehold or leasehold ownership. This, therefore, raises issues about easements for the likes of infrastructure companies that have water pipes. I guess it could also apply to other infrastructure companies such as Chorus and other fibre delivery outfits that have installed some sort of infrastructure throughout land when a unit title is cancelled and they no longer have rights.

If this bill provides for the acquisition of easements to enable those rights while the building is in use, why then did it not deal with the other side of the equation, which is what happens when the unit title is cancelled? And why does that become an issue of substance and policy that is out of scope when the one that is in scope seems to carry as much weight? It seems to me that this bill does include issues of substance. It might not include enough issues of substance—clearly, by what I am just saying, and I know that my other colleagues have mentioned others. I do not think you could describe this as an omnibus bill that is not really dealing with issues that matter, and I find this inconsistent and concerning.

I am happy to take a call again, on clauses 1 and 2. Clause 1 says “This Act is the Regulatory Systems (Building and Housing) Amendment Act 2016.” When I draw the Committee’s attention to, again, the Ministry of Business, Innovation and Employment’s own advice to the Local Government and Environment Committee, it talks, again, about the purpose of the regulatory systems and gives three reasons why we have them, with one being to maintain and improve the effectiveness and efficiency of the regulatory systems. So when I go back to look at clause 1, “This Act is the Regulatory Systems (Building and Housing) Amendment Act 2016.”, and I look at the officials’ purpose for regulatory system bills, my question is: has what we are debating here met the test of both maintaining and improving the efficiency and effectiveness of the regulatory systems; if so, how? That is the question I want to pose.

It talks also about how the purpose of these bills is around including policy change. I do note the Minister in the chair, Michael Woodhouse, talked about how this was not so much a significant policy change but of a more minor and technical nature, but, again, the reason why and the purpose of why we are making the changes or addressing the amendments is so that we can assure the House and New Zealand that we are continually improving our repairs and maintenance of the regulatory system. So my question, again, to the Minister, is: how do we know we have met that test?

When I look at clause 2 and it talks about how “This Act comes into force immediately after the expiry of the 2-month period that starts on the date of Royal assent.”, I want to refer to a colleague’s point around the targeted review. I guess the question that I would pose to the Minister is, if we look at the purpose behind the targeted review, it does say it is about improving disclosure in dispute resolution regimes—it is about strengthening body corporate governance. The review is also going to address encouraging best practice for body corporate managers. It is going to take long-term maintenance planning and funding, and also look at the thresholds of mandatory requirements. Again, my question is: through that targeted review, what happens to the piece of legislation we are debating here in the Committee stage—in terms of clauses 1 and 2—which the review may throw up as requiring some amendments to the legislation?

I would just be interested to hear from the Minister—if the targeted review throws up an anomaly through this bill, I would be interested to know from the Minister what process he would recommend so that those anomalies or concerns that are picked up through that targeted review will be addressed in this bill. I am very keen to hear, because it is kind of back to front—we are passing this particular regulatory bill and we are undertaking a targeted review. Again, I am just really, really keen to hear how we would take the comments that people have applied to the review, and, if it requires some legislative amendments, how the Minister proposes to address that. So that is a question I would really like to ask the Minister in the chair, if he could shed some light on that. Kia ora.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported without amendment presently.