Residential Tenancies Amendment Bill (No 2)

I move, That the Residential Tenancies Amendment Bill (No 2) be now read a first time. I nominate the Local Government and Environment Committee to consider this bill. The bill addresses three issues. Firstly, it implements a common-sense approach to the issue of who pays for careless damage caused by a tenant; secondly, it addresses the contemporary issue of meth contamination of rental properties; and the third reform addresses an anomaly where the Tenancy Tribunal does not have jurisdiction over the renting out of non-residential properties.

This bill builds on our changes to residential tenancy law made last year. In that bill we made smoke alarms compulsory from 1 July last year, and I note and welcome the drop in fatalities in house fires as a consequence. Last year we also introduced a requirement for all social rental housing to be insulated by 1 July last year and for all other rentals to be insulated by 1 July 2019. This provision continues this Government’s leadership on home insulation. Since 2009 we have insulated over 320,000 homes. Others talk; we do. This compares to just 50,000 homes that were insulated under the Helen Clark Government over the same number of years, and with that sort of comparison—320,000 compared with under 50,000—I do find it a bit rich for the Opposition to be constantly questioning our leadership in that area.

The third change we made last year was the establishment of the tenancy compliance and investigation unit to ensure that our housing regulations are enforced. There are now over 200 property cases before the Tenancy Tribunal from that unit, and that reform is also proving successful. These tenancy law changes in both the first and now the second bill are just part of the Government’s broader, ambitious programme around housing reforms, which has included the special housing areas, the Crown Land Development Programme, KiwiSaver HomeStart, and the Resource Management Act changes, which are seeing record levels of construction and improved housing standards. We need to accept that the housing challenges we face do not have a single bullet, a single magic answer, but actually involve a whole series of reforms.

The first set of amendments addresses the consequences of the 2016 Court of Appeal decision Holler v Osaki. That decision changed the previously understood legal settings for tenant liability for damage in rental properties. As a result, tenants are now largely free from the cost of careless damage they cause in rental properties and landlords are bearing most of those costs. This situation is neither fair nor appropriate. Landlords should not be paying for damage to their rental properties that they have not caused, and, what is more, it provides the wrong incentives if tenants do not have some level of responsibility for their actions. But nor should tenants be exposed to the risk of litigation by insurance companies for hundreds of thousands of dollars for catastrophic damage caused by a careless act, such as in the Osaki case. Many tenants assume that the risk for catastrophic damage caused by a careless act is covered by their landlord’s insurance.

This bill makes it clear who pays for what. Tenants will be liable for each incident of careless damage they cause, up to a limit of the value of their landlord’s insurance excess but with a cap of 4 weeks’ rent. These damage liability settings strike a balance between incentivising tenants to take reasonable care of the premises they rent and protecting tenants from very high cost and risk. The bill also encourages cost-efficient insurance arrangements, which will reduce disputes, litigation, and the potential for the double-up of insurance arrangements. It specifies that an insurer of premises against destruction or damage has no right of subrogation in relation to a tenant’s liability under the bill, and to ensure tenants are not out of pocket for careless damage, insurance companies will not be permitted to take into account a tenant’s payment to the landlord for careless damage when calculating the insurance payable to the landlord under a policy.

It is important to note that the proposed settings apply to careless damage. Tenants will remain fully liable for intentional damage, damage caused by an act or omission that constitutes an imprisonable offence, or if the insurance money is irrecoverable because of a tenant’s act of omission. Insurers will retain a right of subrogation against tenants for these categories of damage. These exceptions from the Property Law Act will be incorporated into the Residential Tenancies Act. Equally so, landlords will be fully responsible if it is natural disaster risk such as a flood or earthquake and will need to take out appropriate insurance accordingly. Tenants and landlords will need to discuss insurance arrangements so that tenants understand the exact level of their liability. The bill adds this understanding by providing that a landlord must disclose relevant insurance information or that he or she does not have the insurance over the rental premises. Failure to comply with the insurance disclosure requirement will be an unlawful act with a maximum penalty of $500 for non-compliance.

The second set of amendments is required to protect tenants and landlords from the harmful effects of methamphetamine contamination and to provide clarity on the level of contamination where it poses a serious risk to health. I must acknowledge the work of Andrew Bayly, the MP for Hunua, and Alastair Scott, the MP for Wairarapa, for the work they have done in this area, including the development of a member’s bill. Meth use and manufacture are serious ongoing issues in the rental market both in social and private rentals. Contaminated homes create real and serious risk to the health of occupants, but, equally, we do not want homes being vacated as a consequence of an overly cautious approach to this matter.

The key provisions of this bill provide clarity about the rights of entry and clarity about the rules to disclose the test results. They also enable us to be able to incorporate into the regulations the standard that we announced last week—developed by Standards New Zealand—about the appropriate level of contamination whereby properties should not be occupied, and ensuring that is based on sound science.

The last part of this bill makes it an unlawful act with a maximum penalty for exemplary damage of $4,000 for a landlord to provide premises that the landlord knows not to be fit. There is a range of rental properties that could be unlawful for residential purposes, where the building is either a garage or a commercial building, or in some other way it does not comply with the relevant building health and safety regulations. The difficulty for the Tenancy Tribunal is the ruling from the High Court that the Tenancy Tribunal does not have jurisdiction in the event that it is not a residential property. So the purpose of this part of the bill is to ensure that where landlords do rent out inappropriate properties, there is the capacity to be able to hold those landlords to account.

I think we can all think of situations that occurred in Wellington because of the Kaikōura earthquakes—situations where commercial buildings that had been deemed earthquake-prone were rented out as residential properties. I think most in this House would find that abhorrent, but it is unacceptable that the Tenancy Tribunal was prohibited from being able to have jurisdiction in that area.

Equally, there have been examples around the country of garages or other properties that are being rented out that do not go anywhere near meeting the requirements of the Residential Tenancies Act but where there are limitations on our new compliance teams being able to enforce them because of that jurisdiction issue. My view is that the amendments in this bill that make it plain that the tribunal has full jurisdiction over unlawful residential premises will strengthen the regulatory environment and ensure that those people who attempt to rent out such properties are held accountable.

The three provisions of this bill—clarity around the issue of damages, improving the management in terms of meth contamination, and further enforcing our capacity to ensure that properties are of a good standard and are able to be tenanted—are just part of this Government’s pretty common-sense and practical approach to the Residential Tenancies Act. As I said earlier, it builds on our work of requiring smoke alarms and of requiring insulation. It will improve the safety, the protection, and the clarity for the rental sector, and I commend the bill to the House.

Labour is supporting this bill to select committee because we judge that there is enough in this bill that it is worth giving it some serious scrutiny at select committee. I will have something to say about each of the three main provisions in the bill, but it is our argument that it is a bit strange that Nick Smith would bring a bill like this to the House to improve rental conditions—three practical but fairly minor improvements that need to be made—when the housing market and the rental market are in a state of meltdown and, of the half of the New Zealand population who are living in rental housing, a significant proportion of those people are living in despair at the moment because they are desperately trying to keep their heads above water in the face of skyrocketing rents, poor quality housing, and what is, essentially, an unregulated market. But we will come back to that.

The first part of this bill that I want to comment on is the provisions that deal with methamphetamine contamination. The bill will give landlords easier access to properties to allow for the testing for methamphetamine contamination and it will allow both landlord and tenant the right to terminate a tenancy if tests come back at unsafe levels. The bill also, I think helpfully, sets up a regulation-making power to set the standards and the guidelines for meth testing, including what would be the maximum acceptable level of contamination.

Nick Smith told Radio New Zealand earlier today: “I cannot be a miracle man.” Nick, the country does not want you to be a miracle man; the country wants you to do your job as housing Minister and do something about the appalling conditions that renters in this country are facing and the plummeting rate of homeownership that now sees—on your watch, Nick Smith—the lowest rate of homeownership since 1951. It has fallen every week that you have been in the job, Nick Smith, since you took it on as housing Minister. So the country does not want miracles; it just wants the Minister to do his job. To be honest, Nick Smith, you have sat around for 3 years—3 years—while cowboy meth-testing companies have preyed on the anxieties of tenants and landlords, and, because of this Minister’s absolute negligence, Housing New Zealand alone has wasted $30 million—

💬 Peeni Henare: How much?

—$30 million—testing State houses that they thought were contaminated with meth and remediating those State houses. Hundreds of families have been needlessly evicted because of faulty meth-testing standards and guidelines that the Government was responsible for. This Minister, Nick Smith, the incompetent Nick Smith, sat around for 3 years while $30 million was wasted and more than 500 State house tenants were evicted on the basis of faulty evidence—of testing procedures and standards that simply cannot distinguish between homes that have a residue of methamphetamine that might be harmful to people’s health and a residue that poses no risk to anyone’s health.

The testing and the standards that Nick Smith has presided over cannot distinguish between a home that has been used as a P lab and a home where someone has smoked P. The former is a serious risk to people’s health; the latter poses no risk. And yet that Minister has sat around, sat on his hands and done nothing while tens of millions of dollars have been wasted and hundreds of people have been needlessly evicted by the Government’s State housing agency.

The provisions in this bill are long overdue, but it needs to be said that without proper regulation of the meth-testing industry that has grown up in the last few years in response to this problem, and in a situation of moral panic about P contamination, this Government has allowed lack of proper information, lack of data, lack of decent standards, and no accountability for meth-testing agencies, which have made a killing at the expense of landlords and tenants. So it is 3 years overdue, but what I say to this House, and I hope we will have the opportunity to have this debate in the select committee, is that without proper regulation of the meth-testing and remediation agencies, these provisions are very unlikely to be effective.

The other area that I want to touch on is that this bill, basically, clarifies the law around intentional damage—careless or intentional damage by a tenant. As the Minister said, the Osaki case, that the Court of Appeal found in April last year—it applied the provisions in the Property Law Act that usually apply to the commercial property industry to residential tenancies and, basically, changed the law that, up until that time, had meant that tenants were obligated to pay for the costs of damage to rental premises caused by intentional or careless damage. Basically, the Court of Appeal ruled that tenants are immune from a claim by a landlord where the rental property is damaged by careless or negligent action. The effect of that was, essentially, to let tenants off the hook. It meant landlords could no longer pass on, for example, the cost of their insurance excess to tenants. I think it is widely agreed that it has tipped the law too far in favour of tenants, and there is no disincentive for careless or intentional damage.

So what the officials and the Ministers tried to come up with is a new formula that will provide a better balance of liabilities between landlord and tenant that will encourage tenants to take care and not expose them to, potentially, the risky and expensive legal action that insurance companies could take. We look forward to debating this in select committee. I know that the Property Investors Federation has some doubts about whether or not the right balance has been struck here, and I look forward to hearing from it and also the various tenants’ advocacy groups, which I know were consulted by Ministry of Business, Innovation and Employment officials in developing this bill, but it will be good to really tease that out at select committee and see whether or not this particular formula strikes the most appropriate balance.

The third aspect that I want to finish on is that this bill aims to strengthen the powers for prosecuting landlords who have rented out unsuitable accommodation, such as garages, warehouses, and industrial buildings. There was one very notable case—I think it was 61 Molesworth Street—where, at the time of the Wellington earthquakes, the ratbag owner of that building had rented out a lot of that commercial space to tenants. They were found to be living not only in kind of unsafe and unsuitable accommodation but—what the bill points out is that if people are not in premises that are consented for residential purposes, then landlords cannot be held to the provisions of the Residential Tenancies Act.

So we applaud the intent of this legislation, but it is ironic for a Government that has overseen an explosion in the number of New Zealanders living in substandard and overcrowded housing, whether it is unconsented garages—and we have seen cases of Work and Income New Zealand referring people who would otherwise be homeless to live in unconsented garages in people’s backyards. It is ironic that a Government that has presided over that is now spending $100,000 a day on putting homeless people up in motels, and is now cracking down on this particular aspect of it.

I want to finish with the point that there is a massive reform agenda to fix the housing crisis and make conditions better for renters. There are so many things that need to be done to improve the quality of rental accommodation, to give renters more security of tenure, and to curb the property speculation that is driving house prices and rents through the roof, but this Government prefers to focus on fairly small and relatively inconsequential matters when it brings a bill like this to the House.

It is a pleasure to be talking on the Residential Tenancies Amendment Bill (No 2). As the Minister, Nick Smith, explained before, there are three key issues that this bill is seeking to address, but I want to focus on the methamphetamine issue, which is highlighted in this bill. As the Minister alluded to, I put forward a member’s bill early last year to deal with the issue of methamphetamine contamination in houses. The lead-up to that was actually a lady in my electorate called Sarah Higgins, who was a member of the local board, brought this to my attention, and, as a result of further work, has actually ended up with this legislation now entering this House tonight—a very important piece of legislation, to deal with P. Unfortunately, Sarah is no longer with us, so this legislation is part of Sarah’s legacy in terms of her life, in terms of dealing with the issue of P.

We are all very aware that P is a scourge on our society. It is an insidious blight. This bill is seeking to deal with some of those issues. I think we are all aware that, in terms of what P does, first of all, it has those terribly adverse health effects, particularly for the young and the elderly, as they are the most susceptible to P. The second thing is the social dislocation that it causes, particularly for people who rent and have to find new premises if they find their houses are contaminated. Thirdly, there is the need to protect the rights of landlords who own property and conduct themselves appropriately.

Under the former Prime Minister, now Sir John Key, and currently under the auspices of the Deputy Prime Minister, the Hon Paula Bennett, this Government is focused on addressing the issue of P. One of the 13 initiatives that John Key as Prime Minister established in December 2015 was the establishment of a working group under Standards New Zealand to address three issues. The first issue was whether 0.5 micrograms is the right threshold to determine whether a house is contaminated. The committee has worked its way through, and it is the independent committee that has come back with the recommendation that the threshold should be set at 1.5 micrograms. I heard the previous speaker, Phil Twyford, and if he did some research he would actually find that there are varying levels adopted by different States and countries around the world. But we have landed at 1.5 micrograms.

The second thing that the committee considered was how to standardise the testing of P in property. Many testing companies adopt different practices. It makes a big difference where you test in a property as that will result in a different outcome. The working committee has worked assiduously over the last year or so on how testing is done and on setting a standard for that testing.

The third most important thing it considered was how you would know that a house has been properly contaminated, and, again, it has worked through that process and standardised it. So all those things will help formulate and be the basis of this bill.

I could speak on this topic for a long time, but I am not going to. All I can say is that I am most grateful to the Minister for referring this issue to the Local Government and Environment Committee, of which I am the chair. I am looking forward to working through this issue because it is vitally important, and I see it as a legacy of the late Sarah Higgins. Thank you very much.

Labour will be supporting this bill. I am a little bit surprised, because the Residential Tenancies Amendment Bill—the original one; the first one—came to the Social Services Committee, and this one is going to another select committee. I was just talking to my colleague Phil Twyford about why that might be. Perhaps the Government is trying to avoid our housing spokesperson by sending it to another select committee, but we will send him in that direction when the bill is being considered, so that it can get some good Phil Twyford housing analysis going on there.

We will be supporting the bill. There are a number of changes; however, there are three that we deem to be most important in this bill. First, it will give landlords easier access to their properties to test for methamphetamine contamination and it will allow the landlord or the tenant to terminate a tenancy if tests come back at unsafe levels. The bill also sets up a regulation-making power to set the standards and guidelines for meth testing, including establishing a maximum acceptable level of contamination and guidelines for testing.

We have been going on about this for quite some time. It is long overdue. National’s housing Minister Nick Smith has for far too long allowed a cowboy testing industry to run riot for the last few years without any proper regulation. Tenants and landlords, who, understandably, are concerned about meth contamination, have not had reliable standards or testing for the last few years. Along with that, Housing New Zealand has wasted about $30 million on meth testing and decontamination, and it has evicted more than 500 tenants unnecessarily on the basis of faulty testing that has been unable to prove whether there is residue that could be a risk to the health of tenants. Tenants have been evicted on the basis of meth residue being present, but without baseline testing there is no reliable proof whether they were responsible, or some earlier tenant. So it is really another Nick Smith fiasco. The bill’s provisions are long overdue, but they are unlikely to be effective without some regulation of the meth testing and decontamination industry.

The second point to make about why we are supporting this bill, and the second area of primary interest to us, is that it clarifies some laws around where the tenant is liable for damage to rental premises broadly encompassed by intentional damage by a tenant and for damage that was caused by a tenant as a result of an act that constitutes an imprisonable offence. It also clarifies that tenants are responsible for damage caused by a guest of a tenant—i.e., someone who has been given permission to be on the premises, as opposed to a gatecrasher or an intruder.

The law and practice around the liability of tenants for careless or intentional damage to a rental property was changed by the court judgment in Holler v Osaki. The bill tries to set out a new balance of rights and responsibilities for both landlords and tenants. This is a complex area, and we are looking forward to hearing from the Property Investors Federation and tenants advocacy groups at the select committee so that we can try to craft a solution that is workable and fair for both parties.

Thirdly, the bill strengthens the law for prosecuting landlords who have rented out unsuitable accommodation, such as garages, warehouses, and industrial buildings. However, given National’s seeming reliance on housing people in garages due to its complete inaction on the housing crisis, it seems odd that it is willing to do this.

We will be supporting this bill to select committee. The three issues that I have outlined are worth getting sorted out, but the strange thing is that with half of all Kiwis living in rental housing, there is so much more that National should be doing to fix a broken rental market. I see it all the time in my electorate of Kelston, where constituents are paying through the nose for substandard accommodation.

I saw one case recently where a family was homeless and living in their car. They were then put into emergency accommodation and then they were forced to take up the one house that they were able to actually rent, because the landlord said “OK, I’ll give the house to you.”, and within the first 3 weeks they had two issues with the sewerage, where sewage was spilling out on to the driveway. They had a landlord who was very slow to respond. They were told that the house had four bedrooms, but they got there and one of the bedrooms was actually the lounge. The house was not insulated. It was cold. There were no smoke alarms. There was a whole lot of rubbish that was left behind from the previous tenant, which the landlord had not fixed up. There was a whole lot of things that were broken when they moved in and they had a landlord who had no intention of fixing any of that up.

Really, as a consequence of the housing crisis, what we have here are landlords who are cowboys, who are exploiting the housing crisis, and who have no qualms with exploiting desperate people in desperate situations. Without the right checks and measures in place, that will only continue and, unfortunately, get worse. We do need a much broader plan to be able to address this. We have come up with a number of things that we would do and that we would implore the Government to do.

We have said that we will legislate to improve standards for rentals to make sure that they are all warm and dry. Andrew Little’s healthy homes bill will be back in the House shortly for its second reading. It would be great if the National Government would pay attention to that.

We will be massively increasing the supply of housing, as we have said, through our KiwiBuild policy, and that will flow on to increase the supply of rental properties. So with that, hopefully, we will not have so many people in desperate situations and landlords then willing to then exploit them, not only through substandard living conditions but also through rents that are completely disproportionate to what they are renting in terms of the amount that they are paying.

We have to address the property speculation issue, and we have said that we will be curbing that. We will be closing down the speculators tax loophole and banning foreign buyers from buying existing homes. I cannot see why the Government has such an issue with that. When you go out on to the street and you speak to the public and you tell them “Actually, we’re going to stop non - New Zealand residents and non - New Zealand citizens from being able to purchase properties in New Zealand.”, they breathe a sigh of relief. They look at you and say “That’s just common sense. Why wouldn’t the Government do that?”, but, for some reason, that side of the House finds it so difficult and cannot even contemplate being able to ban foreign speculation.

We do need to look at the issues around security of tenure and the right to make a house a home. We have far too much transience with regard to our children. In fact, we come across schools that say they have got like a 30 percent turnover of students, and the reality is that it comes down to the fact that their parents do not have stable housing. If they are in rental properties and there is no security of tenure, and if they cannot afford to buy a house and they are constantly getting shifted on, then what kind of disruption does that cause to the education of those children? As schools are telling us, it is causing huge disruption. So it is about healthy homes and it is about making sure that those kids are well but also it is about giving them that sense of stability in the house and also in the neighbourhood, in the community, and in the school, so that they do not have to constantly shift.

Moreover, much of the debate on this bill is likely to end up on new changes to meth contamination standards, and changes are good. However, what would be better is National actually showing some guts on methamphetamine supply in New Zealand, and then we would have to worry less about it being smoked in our homes. I will not forget that one of the first things those members did was remove the pseudoephedrine from our cough medicines in our chemists. What kind of impact did that have on the meth problem in this country?

💬 Hon Ruth Dyson: None.

None. It has gone up every year significantly under those members’ watch. It is cheaper and easier to access than ever before. It is cheaper and easier to access than ever before. And, what is more, since Bill English got into the Prime Minister’s office he has put the Department of the Prime Minister and Cabinet reporting on the meth action plan on ice. That is not leadership. New Zealanders want to see something done about this issue. So far they have seen nothing. The only thing they have seen from that side of the House is the removal of cough medicines that actually help alleviate symptoms, but nothing to actually alleviate the meth problem in this country. We need some action, and, unfortunately, the reality is—well, actually, no, not unfortunately; fortunately—I think the only way New Zealand is going to see real action is if it changes the Government on 23 September.

💬 Matt Doocey: Thank you, Mr Assistant Speaker.

Well, I have not called the member yet.

💬 Matt Doocey: Oh, it was just anticipation.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Is the member just going to call in the traditional way?

💬 Matt Doocey: Mr Assistant Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Matt Doocey.

Thank you very much, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): That is fine.

It is a privilege to rise in support of what I would call a cracker of a bill, the Residential Tenancies Amendment Bill (No 2), in its first reading. Just listening to that last speaker, Carmel Sepuloni, talking about a change of Government—I sit here and reflect after listening to that speaker and, of course, Phil Twyford, and I think of three terms in Opposition, and I just think “How out of touch”—how out of touch. She talks about banning foreign speculators, when all the reports have come out that less than 3 percent of housebuyers are non-domiciled in New Zealand. She is too busy reading Denis O’Rourke and Tracey Martin’s newsletters—that is what I would say she has been doing.

Then we get Phil Twyford up. You cannot deny his enthusiasm and his energy, but, man, he really needs to come south of the Bombay Hills, does he not, and see how we are doing in Canterbury, where rental prices have dropped over 10 percent in the last year. The biggest dilemma now is that terraced houses are not renting because renters now have the choice of having their own stand-alone houses. That is what happens when the Government intervenes, but when it tried to intervene in Point England, well, it was not allowed to, were we? No, and the Opposition tried to vote it down, but it shows that when the Government steps in and frees up land, which increases supply, it equals demand.

Back to this bill—even though I have not been prompted, I will go back. I am very diligent and compliant. I will just say this is a cracker of a bill—succinct, very clear, and connected to the issues. There would not be one electorate or list MP in this House who has not dealt with either tenants or landlords and the issues that they face. I think this bill is very clearly drafted to address some of those key issues.

Unfortunately, as has been spoken of in the House tonight, we do have a growing P issue, something that should be taken very seriously. In my former work in the mental health field I worked in drug services, and P, scarily enough, unlike any other drug—you primarily have to be predisposed to mental health issues for other drugs to bring out psychosis, but after doing pharmacology and working with these clients, it is very clear that P is one of the very few drugs that can actually bring out mental health issues in people who were not predisposed to mental health presentation. So it is a very scary drug that we should be taking all actions to address. I think it is quite right, with the growing numbers of reports of manufacturing of P in rental properties, that this bill will go some ways to addressing that—being able to intervene early and being able to support tenants and, ultimately, families who are renting properties so that they may be protected from P-contaminated houses.

As a member of the Local Government and Environment Committee, I am looking forward to this bill being sent there for the deliberations and for the submissions, to ultimately bring back to the House a bill that will support many mums and dads, whether they be tenants or whether they be landlords. Thank you very much.

The Green Party will be opposing the Residential Tendencies Amendment Bill (No 2). Of all the things—of all the things—that a Government could be doing right now with purpose and urgency and energy to directly address the very urgent problems that are happening in our communities, of all the things—my goodness, what is happening? What is happening? We have got 40,000 children a year being admitted to hospital because of illnesses linked directly to cold, damp homes. We have got 16,000 deaths a year—

💬 Metiria Turei: Hundred.

—1,600 deaths a year—thank you, Metiria Turei; one is too many, but 1,600 is what we have—of elderly people linked to cold, damp houses. We have things we can do right now to address those problems, but, of all the things, we have Nick Smith’s little minor bill.

We do agree with some parts of this bill. For example, on its own we do agree that the positive step to make it easier to prosecute people who take advantage of the housing crisis by renting out properties that are unfit for residential purposes is a good step. On its own, we would support these parts of the bill, but this is Nick Smith’s style. He sneaks in these things that seem like an on-the-edge positive step. He sneaks those into a bill, and in the meantime forgets about all the other urgent things and urgent solutions that this Government has the power to put in place right now. Instead, he sneaks through something that is just skipping around the edges. So I have a huge issue.

We are talking about residential tenancies. We are talking about renting, here. Māori and Pacific homeownership rates are plummeting. They already were not too flash, but they are plummeting. They are plummeting. Te Matapihi believes that political inaction is the reason for a huge decline in Māori and Pasifika homeownership, and so do we. The Green Party supports what Te Matapihi is saying, because between 1991 and 2013 Māori homeownership has declined down to 32 percent, and Pacific 38 percent. If we are talking about legislation to improve our communities and our country, and looking at renting and looking at renters, what on earth is this? Rau Hoskins of Te Matapihi says 9 years of political inactivity is what has caused these plummeting rates of Māori and Pacific homeownership. We need bold action. We need bold action, and what we have got here is this legislation.

I want to pick up a little bit on the meth testing. I have been knocking on doors and walking around my community in Manurewa and I have been talking to neighbours of people who have been evicted next door or a few houses down who are really upset when they talk to me. They say: “Marama, those people were an amazing family. There was no way that they should have been evicted from their home.” We have to weigh up the harm that we do when we evict people. Evicting people is a big call. Evicting people is a big call, and we have to be prepared to understand what we do.

This meth testing has an underlying problem. The advice from the Drug Foundation is that representatives of the meth-testing industry—hello—are overrepresented on the panel developing the standard. The Drug Foundation worries that the bill will legalise those silly standards and will result in a whole lot of harm. Bottom line: there is no science for setting a contamination level for meth use. We just cannot be sure. So we have to weigh up the harm. Yes, we do want to have safe homes—absolutely—but we also need to weigh up the harm in evicting people from their homes when we are not clear exactly who was responsible for any meth contamination, and when we are not clear exactly how to measure the harm that can be caused by any amount of meth. So, yes, we want to ensure that our homes are safe from meth. But we have to, in this House, understand the impact that evictions are having on real lives—on families, on children, on the elderly. We have to understand that here, and it is our job to weigh up that harm.

Our houses are too cold, but the problem with that is that, because of the dire situation of this housing crisis, too many tenants do not want to complain about that—too many tenants are going to hang on to whatever condition their house is in. Even if they do make the bold decision to try to raise that awareness to a landlord about the condition of their home, more times than not there is not going to be good action. We need to put that leadership from here in the House on to the minimum standards for what a warm, healthy, safe home should look like. There are too many instances where damage is raised by the tenant, and the least possible action is done that the landlord can get away with, if at all.

When we heard some of the submissions from some of the advocates, including the Sisters of Mercy from Manukau, they talked about how, more often than not, their tenants would choose not to make a complaint because they would have to join the line with 30, 40, 50 other applicants for a house. That is how we are ending up pushing people along this spectrum right down to the bottom of homelessness. We have to be really clear about making sure that we have got minimum standards—making sure that we have got strong legislation so that all landlords can do the right thing. There are many who do, but those few that do not do the right thing, they have a real impact on many families—many families. That is the sort of legislation that we need to be getting through.

We need to have secure tenancies so that renters can feel free to make a complaint without the threat of being evicted out of retribution. We need to wipe leasing fees. Can we just have some legislation right now around that, because in this unstable housing environment, tenants and families and people are having to come up with leasing fees. It is a big ask, and those leasing fees are getting more and more and more at the moment. We have to put legislation in place to restrict rent increases, and come up with a formula that is not going to make it so shaky and unstable and destabilising for families to just put down roots and live. These are the things that the Greens would do.

We have so many more homes that need good insulation—so many more homes that need good, proper insulation. If we want to talk about standards and levels of insulation, let us just say that one tamariki who gets sick and admitted to hospital from housing is one too many. Let us just say that one annual winter death of any elderly person is one too many. Let us put those standards—let us insulate according to that. Let us aim for that. Why not? Let us be inspiring and bold and visionary.

The Greens too understand that we have to address this speculation environment—this privileging of speculation that we have at the moment, when homes are for living in. Homes are not supposed to be so heavily the business that we have got going at the moment; they are supposed to be for living in, for putting down roots. Homes are for living in, not for business trading, and we know we have to do the legislation that will address that.

These are the bold things that a Minister of housing should be doing right now. I was told in an inequality hui that I attended in Hawke’s Bay yesterday that the advocates in the community are just tired—they are just tired. They want us to fix this—they want us to fix it—and we can; we have got the power and we have got the tools. We will not be supporting this bill. We want something brave and bold that will actually address the causes. Thank you.

My speech is going to be a little different from some others, because I am actually going to stick reasonably close to what is actually in the bill. New Zealand First supports the purposes of the bill and will vote for it to go to the select committee for examination. The only criticism I actually have of the Government over this bill is why it took so long to bring it before the House, because some of the problems addressed by the bill have been around for quite some time. Those purposes are, firstly, to expand liability for careless damage to rental premises caused by a tenant or a tenant’s guest; secondly, to define the rights and responsibilities of the parties where there is methamphetamine contamination in a rental premise; and, thirdly, to divine residential tenancies that are so substandard that they are to be made unlawful for residential use.

I am glad that the bill addresses the problem of methamphetamine contamination, because that is a problem, as I have just said, that has been around for some time. I think it is actually the single worst problem in the residential tenancies market. This bill will give landlords access to their properties to test for meth, and tenants would be able to terminate their tenancy if the test results show unsafe levels of meth.

I am glad, also, that the bill addresses the problem of liability for careless damage caused by tenants and by tenants’ guests, because that is also a problem that has been around for some time. Tenants will be liable for the cost of their landlord’s insurance excess, up to a maximum of 4 weeks’ rent, for each incident of damage caused by the carelessness. I think that is a very fair and appropriate provision, and I am glad to see it there.

Most of all, I am glad that the bill strengthens the law for prosecuting landlords who tenant unsuitable premises. The housing crisis, caused by the ineptitude of the National Government, has caused, as we all know, a distressingly large number of people to be forced to live in cars, garages, industrial buildings, warehouses, under bridges, and so on and so on. It has therefore been an opportunity for unscrupulous landlords to rent that kind of accommodation to people who cannot afford better or who cannot find suitable accommodation. One of the effects of Government mismanagement of housing has been to cause rents to rise hugely, forcing people to continually look for cheaper and cheaper and worse and worse accommodation. Christchurch is an exception to that, simply because of the sheer magnitude of the insurance money that has gone into that city to provide more and better housing, and also the city council has been pretty good about making land available. But, generally, the market has become a paradise for bad landlords and a disgraceful standard of rental accommodation at the bottom end.

Moving on to the bill itself, it defines the term “unlawful residential premises” as those that are used for accommodation for a person but cannot lawfully be occupied for residential purposes, and where the landlord fails to comply with his or her obligations set out in the bill in relation to legal impediments to occupation at the start of a tenancy and ongoing compliance with building health and safety legislation. That is exactly as it should be. Properties that do not reach a reasonable standard should be declared unlawful to rent to any person.

I am pretty pleased, also, to see that if the Tenancy Tribunal finds that premises are or were, at any material time, unlawful residential premises, then there are some pretty good, practical sanctions provided for in the bill. One of those is that the bill limits the liability of the tenant to pay rent arrears or damages or compensation to the landlord. So if a tenant is living in very substandard accommodation, they simply can stop paying the rent, knowing that it will not be enforceable by the Tenancy Tribunal. That is a very good sanction on a landlord—a very practical and direct one—that I think will work very well.

The tribunal can also make an order for the landlord to actually repay rent paid by the tenant. That is a step that I had not thought of, and I think that would be an even more powerful sanction on bad landlords. The tribunal can make a work order to require the landlord to take the steps available to fix any legal impediment to occupation and to comply with the applicable building, health, or safety legislation. Again, it is a very practical measure. So I thoroughly approve of all three of those measures, and it is one of the main reasons why New Zealand First is pretty pleased with the bill.

Of great importance: the landlord must not provide premises that are meth contaminated. If the landlord knows that because of tests carried out in accordance with regulations to be established, and the premises have not been properly decontaminated, and the landlord nevertheless goes ahead and lets it, there will be an amount payable for contravention of up to $4,000. Again, that is a pretty significant sanction, and it is deserved where a landlord knowingly lets a property that is meth contaminated, because of the danger presented to the tenants concerned.

The rights to end a tenancy of a contaminated property are also well defined in the bill. It allows the landlord the right to enter the premises for testing and to take samples, and the notice for that is 48 hours but not more than 14 days, and the time of the day is specified as well. The tenant must be informed of those results within 7 days—so they must share the information. The bill also provides similar sorts of provisions in the case of boarding house tenancies. That is good to see as well.

If the tests show that any part of the premises is methamphetamine contaminated, either party can then terminate the tenancy. If it is the landlord, they need only give 7 days’ notice, and if it is a tenant then just 2 days’ notice is required. That is appropriate for premises that are as dangerous as they would be if they were contaminated with methamphetamine. In addition to that, the rent abates, unless, of course, the tenant is responsible for the contamination in the first place.

As I have said, I think these are pretty good, practical measures, which probably should have come in some time ago, but it is good to see them finally getting here before the House. It is also good to see that there will be regulations brought down in due course to prescribe a maximum level of methamphetamine permissible for premises and also to provide for the testing of premises for the presence of methamphetamine and to prescribe the decontamination process.

Unlike the Greens, I actually think this is a pretty good and pretty well-rounded bit of legislation. It is quite narrow in its scope, but it covers areas of problems that have been coming up for so long. Just about every MP in this House would have had people come to them describing these kinds of problems. I just wish it had been done a lot sooner, but I am very pleased to see that this bill is before the House now, and I look forward to looking at the bill in much greater detail in the select committee, where we will make sure that it actually does do the things that are claimed of it, which I have spoken about this evening. For all those reasons, New Zealand First will not have any hesitation in voting for the bill to go to the select committee, and I do look forward to dealing with it there for the benefit of both tenants and landlords—for the future.

I rise to take a brief call on the Residential Tenancies Amendment Bill (No 2) in its first reading. I want to congratulate the Minister for Building and Construction for bringing this bill. As the previous speaker, Denis O’Rourke, said, we have waited a little while for this bill to get here. It is a narrow-focused bill, and I say that it is about time that it came before this Parliament.

I just want to say that some of the kōrero that came out from the Greens tonight over the harm to families from eviction from houses that are P contaminated—I just want to say that if it were my family, I would like them out of that house and away from that house so that the various testing could carry on. I would like to remove them, to keep them away from the harm that that house might impose.

I like this bill because it is a strong piece of legislation. It does deal with the three main things that actually affect people who are renting and landlords who are renting their properties, and it also empowers the tribunal as well so that it is able to do things that it is not able to do until this bill comes into law.

As I said, a lot of my colleagues and some of the people on the other side of the House have already given very good outlines of this bill. I have no hesitation in supporting it to select committee, and I welcome it to select committee. Thank you.

I just want to be really clear about the meth issues that have been raised by my colleague Marama Davidson. We know that as a result of a poor standard and poor testing quality, Housing New Zealand has spent millions of dollars using shoddy tests and making unnecessarily harmful decisions that have led to families having to leave their homes for no good reason. While Jo Hayes and National might think that it is fine for people to be evicted from their homes for no good reason, based on shoddy science, and at great expense to the public, the Green Party does not think that is justifiable at all. We think that is a waste of public money, and, more importantly, actually, it is a totally unjustified disruption of the life of a family who have been evicted, who have very low incomes, and who have nowhere else to go. So Jo Hayes and National might think it is quite fine for people to be evicted from their homes and made homeless based on that shoddy science; the Green Party does not, and that is why it is not supporting this bill.

I would also just note, on the two other provisions in this legislation, that I am really pleased that there will be a greater enforcement around non-residential properties, and the quality of those non-residential properties, that are being used for residential purposes. That is fair enough, if you are talking about garages. What about some decent law from National that holds residential properties to a higher quality standard? Would it not be great thing if we had a law that said that those properties that are residential properties and are unfit because they are cold and damp and cause people illness—

💬 Marama Davidson: They make people sick.

—that is right—because they do not provide basic services like decent water, like not having holes in the walls or in the floors, and like being properly insulated so that they keep people warm? Would it not be fantastic if we had a law that said that those residential properties were unfit for our families to live in, and that those landlords—

💬 Phil Twyford: Going to have to change the Government for that, Met.

We are going to fix that. That is quite right, Phil Twyford. But would it not be great if that was the law that we were discussing today? That would mean that New Zealand families could guarantee that the homes they are renting, which are supposed to be homes that are warm, safe, and dry, actually would be warm, safe, and dry—imagine that. But, no, National has no interest in protecting and maintaining the quality of residential properties. It is spending the time, the last remaining weeks that it has in Government, focused on a sliver of the issues that matter. And, yes, it does matter that landlords—exploitative landlords—are renting out garages and commercial buildings and outdoor sheds as residential properties, and charging people a huge amount of money for that—

💬 Marama Davidson: Huge.

—a huge amount of money for that. Yes, that matters.

We also have other major issues in the rental housing market that National should have been addressing over the last 8 or 9 years, and it has failed. National has been running from the major issues in housing that this country faces, and now, in its last remaining weeks in Government—it is only a few more weeks to go before it is out—it brings us this bill. We are simply not going to put the Green Party name to a piece of legislation that is potentially going to cause more people to be homeless and is going to make it very difficult for tenants, especially under the Holler v Osaki case. I know about the Osaki case and I know the details of it, and I understand the need to do something to clarify the law, but this bill is a sledgehammer that undermines tenants’ rights, and the Green Party will not put its name to that either. We will not support this bill. Thank you.

Peeni Henare, tēnā koe—5 minutes.

Tēnā koe, Mr Assistant Speaker. There have been a lot of interesting points being made across the House in relation to this particular bill. I want to just pick up on one of the points made by my colleague Metiria Turei. It is too easy to limit our scope, when you look at this bill, to simply just garages. It is easy enough to look over the history of this particular Government and find many cases of landlords who have been caught renting out garages or substandard living arrangements to desperate people in a housing crisis. It is easy to find landlords who are doing that with garages, but I take the point of my colleague and say, actually, and, in particular in recent times, boarding houses come under that. The substandard arrangements and living conditions in boarding houses is just not acceptable.

This particular bill actually does not address that. In a quick look under Part 1 of this particular bill, and I looked up under the original act, is section 66(H)(2)(b), and all it asks is that the boarding house room be of a clean state—of a clean state. That is just not good enough when we look at recent reports about substandard boarding houses, where rooms are covered in mould, and where the infrastructure and the facilities in those boarding houses are just not up to scratch. Yet, in the original legislation all it states is that the room has to be clean, and that is just not good enough. So this bill does not go far enough in that respect, but it does have some other good parts of it, mentioned by my colleagues in this House, around the meth testing and around other issues as I have already pointed out—landlords who, during a housing crisis, are exploiting families and desperate people who are looking for accommodation.

We need only look into recent times, as recent as March, where a landlord in Manurewa—and my colleague Marama Davidson has mentioned this—was fined for renting out a substandard garage to a whānau who were desperate. The landlord was ordered to repay almost $16,000. That was as recent as March, but you can go back even further to 2013 where one particular landlord was found guilty of multiple offences—multiple offences—where they converted garages and substandard areas, letting spaces in order to make profit. They rented 17 rooms out, in fact, to families who were desperate in a housing crisis, and that is just not good enough. That is just not good enough.

Sure, this bill might head some way towards curbing that and towards making sure that it does not happen in the future, and we will be supporting the bill to make sure that even more stories from families who are affected out there are actually brought forward to the select committee. We want to hear from housing groups. We want to hear from social housing agencies. We want to hear directly from families who have been affected by many of the changes.

I want to pick up—just in the small time that I have left—on the point made by my good colleague Marama Davidson. She makes a very good point about those families who were evicted for, in some cases, accusations of involvement with P, when that actually was not the case. The long-term stigma that is attached to those families who are trying to find a house, during a housing crisis, cannot be denied. It cannot be denied. Agencies and landlords look at a person’s record when they go to hire out houses, and under the unfair testing regime of this Government, families have fallen victim to that and have been evicted. Sadly, what that means for them is that the opportunity for them to get a house in the future is slim to none, and that is just not good enough, and that is not fair.

This bill does not address this, but what it will do is set a regime for testing that will actually be more effective than what has already been mentioned in this House. It is a waste of $30 million—$30 million. That is a heck of a lot of money to be wasted on a testing regime that did not work. So we do support this bill to the select committee stage. We do encourage everyone who is impacted by the amendments in this particular bill to come forward and make a submission to the select committee. Kia ora.

Tēnā koe e Te Mana Whakawā. Thank you for the opportunity to be able to take a short call on the Residential Tenancies Amendment Bill (No 2). I think it is really refreshing to know that all but one party, I believe, is actually supporting this bill to the select committee, and I think the important thing—just hearing the different speeches from both sides of the House—is that we all agree that, first of all, this bill is a very, very practical bill. It is a common-sense bill and it probably reflects, in a lot of ways, that more New Zealanders are actually choosing to live in rental accommodation. One thing here is that with that is an industry where you have scrupulous landlords, and even tenants, actually, who are involved in it. This Government is very much committed to providing better protections for both responsible tenants and also responsible landlords.

Just hearing from the Green Party, though, it is a little difficult to accept the fact that it is not supporting this bill, because I would think that a lot of its supporters are actually the type of people who would require a number of these protections that this bill is going to undertake. It was really interesting, actually, listening to the New Zealand First speaker, Denis O’Rourke, because he very much critiqued the fact that there are new things, particularly the scourge of society that is the P epidemic, and that there is necessary legislation that this bill gives to try to address a lot of those issues that come from the use of P, particularly in accommodation.

But I suppose one thing that I think is important is an excellent example of the real practicality of this legislation. If we go only a very, very short distance from here, to Molesworth Street, there was a situation where an old office block was transformed illegally into residential apartments. This happened, and then the problem came after the earthquakes here. What happened was that the existing law did not actually—the building was not at all covered by the Tenancy Tribunal to have jurisdiction to remedy complaints that we had evicted residents who were in a converted commercial building. When the tenants went to the residential tenancy association, it could not help them. The reason for that was that the accommodation was illegal originally, and there was no way that the tenants could be assisted. But if this legislation had been in place, then that would not have been an issue. It would not have been a problem.

So that actually highlights one of the great things that this Government is doing—the foresight, particularly around other legislation that we have put in place. This shows a Government that has not given up at all. This Government is continually bringing excellent legislation to this House, all the way up to the final term.

💬 Metiria Turei: About luggage? Excellent legislation about luggage!

So—oh, that is OK. You used the word “imagine”, and I was just thinking, when you used that, “Imagine there was no Green Party.”, and that is easy, very easy, if you try. So kia ora to you. Nō reira, e mihi atu ki a koutou katoa. Imagine!

Thank you so much for this opportunity to have a speech on the Residential Tenancies Amendment Bill (No 2). Labour supports this bill to the select committee, and I look forward to the discussions at the select committee, as well as to hearing some of the submissions, especially submissions from tenants when they come to present to the select committee. The bill deals with a lot of issues, but the three most important for the Labour Party that this bill actually addresses are the following: first, that it will address liability for damage to rental premises caused by a tenant; second, meth contamination in rental premises; and, third, tenancies over rental premises that are unlawful for residential use.

Now, I will discuss the third issue first, but, before I do, I want to agree with my colleague Metiria Turei. One of the things that she said was would it not be wonderful if this was legislation that would do so much more—for instance, legislation that would ensure a warm, dry, safe home for all of our people; one that would ensure a warrant of fitness for homes.

When we have 1,600 people a year pass away, and one of the reasons is because of the condition of the houses that they live in, and when we know from a coroner that 2-year-old Emma-Lita Bourne, from my electorate in Ōtara, died because of the condition of the house she lived in, which was a State house, there is so much more that we as members of Parliament can do to ensure that we save people’s lives.

On the third point, this bill would look at what can be a rented property, covered under the Residential Tenancies Act. This bill aims to clarify the kinds of properties covered by the Residential Tenancies Act 1986; in particular, tenancies of rental premises that are unlawful for residential use. It is unfortunate that I come across so many unlawful residences like this in Manukau East and South Auckland. There are certain streets in my area where, as you walk down the street, almost every second house has a garage that is a converted garage where families, children live—garages where it is leaking. Some of these garages are mouldy.

One particular example was of a mother with six kids. Most of her kids were really, really sick. One of her children had special healthcare needs, and this particular lady had been living in this illegal garage for months and months. She had no other option. In fact, this particular garage was one that belonged to the mother of one of her son’s friends. So one of her sons goes to school, and one of his friends whom he plays hockey with has a mother who is a teacher at the school. When this teacher heard about the fact that they lived in a car, she offered up her garage. It was not until she came asking for assistance from the MP that they were able to be placed in a house. The point I am making is: why is it that we live in a country now where we have so many families who live in illegally converted garages like this?

Now, we know, and I heard the Hon Minister, when he was in the chair earlier on, refer to the fact that the initial residential tenancy legislation that has been passed—one of the things is that the Ministry of Business, Innovation and Employment (MBIE) has a compliance unit that now looks at landlords and prosecutes them. But some of these folks—our office has been involved in some of these tenancy issues, and we take them to the Tenancy Tribunal. They are awarded funds because they are living in illegally converted garages or working sheds and all that kind of stuff, but these landlords then legally become bankrupt and so then no one actually pays these particular families. So having legislation like this that gets passed, and having a unit at MBIE that can prosecute folks—and I have actually read somewhere that the compliance unit over at MBIE has 15 compliance officers; if we are to look at the practical implication of that, for all of New Zealand to have only 15 compliance officers at MBIE to look at monitoring all of the possible illegally converted garages, all of the sheds that people are living in, all of the residential properties that should be warm, dry, and healthy—15 compliance officers just does not cut it.

💬 Hon Member: Nick Smith’s smiling. He thinks it’s funny.

No, it is actually not very humorous. When you actually go to various houses where you see a house that has no running water, a house that has no working bathroom, a house that has windows with no glass in the windows for 95 percent of it, and a house that is infested by cockroaches, rats, and all kinds of insects, this is not the kind of house that people should be living in, that people who are paying rent, people where—some of these landlords are getting the funds directly from Work and Income New Zealand (WINZ) themselves. Some of these families are actually encouraged by WINZ to go and see these various houses. It is not good enough.

Last year an investigation by Lisa Owen of TV3 revealed some of the worst kinds of working sheds that our people in South Auckland are living in—illegal, non-consented working sheds. She showed us that some of these working sheds had mould on the outside—not even looking at the mould on the inside of these working sheds. Some of these garages in South Auckland are being rented out at up to $560 per week—$560 per week for an illegal, unconverted, cold, freezing garage that vehicles should be in, not families with children. So I commend this Government for bringing this legislation through, but I just do not see it as the solution to ensuring that we have fewer families living in such illegal places.

The other area that this legislation deals with is with meth contamination. Now, it is one thing to actually allow legislation to look at, and have regulation where we would look at, testing kits where, hopefully, not that many people are going to be evicted out of the houses. Now, we know, and we have heard many other speakers cover this point, where there are over 500 State houses that people have been evicted out of, that the Government has spent more than $30 million not only to evict people but also to decontaminate these houses. But we have so many who are living out on the streets and too many who are homeless. Over 41,000 people are homeless.

When we look at the housing crisis in Auckland, it is by far the area that is experiencing the worst, but it is not the only place that experiences the housing crisis right now. Here in Wellington and the Hutt Valley, we know that Lower Hutt and Upper Hutt have over 266 families on their waiting list. When we look at Whangarei, there are more than 150 people on its waiting list. There are 166 in Napier and over 199 in Tauranga. These are issues that this Government should most definitely be looking at and making sure that our people have a house to live in.

The third and final point that this bill actually covers is tenants’ liability for damage. This bill would refine some of the law about tenant liability in relation to their accidental damage to the rental property. These provisions for tenant liability would reverse the recent Court of Appeal decision about limits to tenants’ liability so that they would actually pay part of the damage that they themselves have actually caused. Broadly speaking, intentional damage by tenants would be something that they must actually contribute to. Thank you so much for this opportunity.