Residential Tenancies Amendment Bill

CHRIS TREMAIN (Senior Whip—National) Link to this

I seek leave for the Committee stage of the Residential Tenancies Amendment Bill to be taken as one question, with unlimited calls.

MOANA MACKEY (Labour) Link to this

It is with great pleasure that we finally come to the Committee stage of the Residential Tenancies Amendment Bill. This bill has been a long time in making further progress through the House since it was reported back from the Social Services Committee in about September last year. It is very pleasing that we finally see some action to progress this bill. Labour has put up a number of amendments in the Committee stage. We support this bill; it was Labour legislation to start off with. Unfortunately, following the change of Government the Minister of Housing has seen fit to water down the protections for tenants under this legislation, so I have moved a number of amendments in my name in an attempt to address that watering down and restore some of the protections that Labour saw fit to award tenants under its bill.

It is fair to say as a background that tenants in New Zealand do not enjoy an enormous amount of protection, compared with tenants in other countries around the world that we generally compare ourselves with. Many other OECD countries have secure tenancies; New Zealand does not have those. This means that any tenant in New Zealand can be evicted on 90 days’ notice, for absolutely no reason at all. That does not provide security for families in New Zealand. In saying that, I acknowledge that the situation in New Zealand is very different from, for example, that in Europe, where there are a large number of corporate landlords as opposed to mum and dad landlords. I feel that the bill that Labour originally put forward provided a number of protections for tenants that did not need to be removed, considering that in New Zealand, compared with other countries, the balance is already heavily weighted towards the landlord.

I do not hold out much hope that the Government will support my amendments, because I fear some of these arguments have already been had and lost. But there is one particular amendment on a new issue that I hope the Government will support. Certainly Labour will be arguing very strongly that the amendments put forward in my name in this Committee stage should indeed be supported.

The first amendment in my name that I will speak to relates to the issue of letting fees. In Labour’s bill we prohibited the charging of letting fees to tenants. This is the situation where a tenant goes into a letting agency in order to find a property to rent, and a landlord has engaged a letting agency to market the property to prospective tenants. When a tenant finds a property that he or she wishes to rent, the letting agency then charges that tenant a week’s rent, usually—sometimes more—for that service. Labour thought that that was particularly unfair. It is hard enough at the moment for tenants to get into the private rental market, without putting up another barrier. When we consider that rents are likely to rise as a result of the taxation changes in the Budget, we see that this barrier for tenants is not needed and not warranted. I make the comparison of letting agents with real estate agents. When someone wants to sell a house and engages a real estate agent to market that house to prospective buyers, the vendor pays the charges or the commission to the real estate agent, not the person who buys the house.

The argument is often put up—and it was put up to us in the Social Services Committee—that when the rental market is tight, the letting agency is in a way working for the tenant, not for the landlord, because it is so hard to find a property that it is in fact good for the tenant that a letting agency is doing that work. But that argument does not apply when someone sells a house. Regardless of the state of the housing market, the person who has engaged the professional agency, be it a real estate agent or a letting agency, pays the agency’s commission. It is not the decision of the tenant or the purchaser to engage that professional agency, so why should those people be the ones who pay for its services? I welcome the Minister’s arguments on this matter, because it is a significant barrier to getting into the rental market. It is yet another thing that people have to pay, on top of the cost of moving, on top of the cost of an upfront bond, and on top of the fact that rents will be going up—and they have been going up. The letting fee might not seem like a lot of money to some members here, but for someone to have to pay another week’s rent on top of everything else may well make the difference between that person being able or not able to get into the property.

An interesting fact is that a lot of property agents came along to the select committee and said they were annoyed because other agents could charge letting fees, but they could not. When we asked them whether they would be happy to just have the right to charge those fees taken away from everyone, they said yes. They wanted to have a level playing field; they did not want to have those fees as a source of income. National Party committee members and Labour Party members agreed there should be a level playing field, but the National Party’s point of view was that everyone should charge tenants a letting fee, and the Labour Party and the Green Party—I am not speaking for it—then said no one should charge letting fees to tenants. If a landlord wants to engage a property management agency or a letting agency to market a property, then the landlord should pay the cost of engaging that agency. The charge should not be put on to the tenant.

So there is an amendment in my name that would make this change and prohibit the charging of letting fees to tenants. I urge members to support it. I think it is only fair that this amendment be passed into law.

The second amendment that I will talk about is one that started off in a member’s bill in the name of my colleague Maryan Street. It is around the issue of joint and several liability when there is damage to a property. This issue arose out of a case in Dunedin where a student flat burnt down. One tenant was responsible for the action that caused that, but the other tenants were not. In fact, they were not there. They did not know anything about it, and they could not have stopped it because they knew nothing about it. But they were held liable. We have heard, I believe, that two of the tenants who had nothing to do with causing the fire, and who could not have stopped it even if they had wanted to, were bankrupted as a result of the insurance company going after them to get back the money that it had to pay out to the landlord to fix that property. That is a situation where clearly only the insurance company wins.

I want to be quite clear about this issue, because I know that there tends to be a bit of mischief about trying to misrepresent what Labour believes about it. Absolutely, a landlord should be able to recoup the cost of damages caused to a property, but Labour says we should make the person responsible for causing the damage the one who is targeted for recouping that money, rather than people who are not responsible for it. It may well be that the response that Labour put up is not the best way of doing it, and that the Government thinks there is another way of achieving that. If so, we would definitely be open to considering other options. But I do not think anyone thinks it is fair that an insurance company can get two bites of the cherry, by chasing after people who could not possibly have stopped an action from happening. We have ended up with young people at university being bankrupted as a result of the actions of that company.

This is a serious issue. The Minister has known about this issue for a long time. In fact, when in Opposition he dealt with it as the spokesperson on housing when my colleague Maryan Street first brought her member’s bill to the House. He has had more than 18 months to deal with it as the Minister. The select committee reported back on this bill many, many months ago; I think it was in September last year. He has known about the issue for a long time, and I hope that he will be able to stand up and tell us either why he will not be addressing it—why he does not feel the situation needs to be addressed—or, if he is prepared to address it, what he intends to do about it.

I will save my other amendments for further calls. Certainly, the issue of letting fees is critical, and I do not understand how the Government could possibly say it is unfair that the person who engages the letting company should pay for that, as opposed to the person who ends up renting the property, particularly in light of the Budget changes and the hardship that is being faced by many people. In fact, 30 percent of New Zealanders rent their properties and 50 percent of them have a combined household income—not personal, but combined—of under $50,000 a year. These people cannot easily absorb another couple of weeks’ rent on top of everything else, and that is what makes the issue of letting fees even more critical than perhaps it was when the previous Labour Government put forward legislation to prohibit the charging of letting fees to tenants. It is an issue of fairness. I do not see the Government scrambling to make sure that in a tight housing market the real estate agents charge buyers and not vendors for marketing properties, so it is difficult to comprehend why the Government and the Minister of Housing feel it is necessary to whack another cost on to tenants, who in the current financial situation are already struggling.

I have to say that issue was a big one at the select committee. It was an issue on which even those who thought that letting agents should be able to charge whomever they wanted acknowledged that charging tenants the letting fee caused hardship. There were people who acknowledged that it did keep people out of the housing market. We had a comment from one of the National members on the committee that those people could just go down the road and find somewhere else to rent. That comment worried me, because I think that sometimes National members do not understand that the lowest-paid New Zealanders do not have a lot of choice when it comes to these situations.

Hon PHIL HEATLEY (Minister of Housing) Link to this

I take this call to clarify the purpose of the Government’s two Supplementary Order Papers. The first proposes minor, technical amendments to improve and streamline the implementation of the bill. More specifically it separates certain intertwined provisions of the bill so that they may be brought into force, via separate commencement orders as envisaged by clause 2, to ensure that parties have sufficient time to prepare for their new rights and obligations. The bill provides for administrative and Tenancy Tribunal forms to be updated and approved by the chief executive of the Department of Building and Housing rather than by regulations. It updates the Tenancy Tribunal’s jurisdiction to mirror the new process for dealing with abandoned goods, as proposed in clause 42. It removes the requirement, but retains the ability, to prescribe a fee for providing a debtor’s address details to the District Court for enforcement purposes. It provides for the form of notices filed with the District Court—for example, a notice of appeal—to be governed, as is the case under other legislation, by generic court rules rather than separate regulations. Although the aforementioned changes are minor in nature, collectively they will aid clarity, reduce unnecessary regulation, and facilitate improvements to the administrative processes over time, in response to feedback from users.

The second Supplementary Order Paper proposes minor, consequential amendments to the bill that reflect the recent enactment of the Unit Titles Act, which was passed, obviously, before this legislation. We would have had to make other changes, had the reverse been the case.

Both Supplementary Order Papers are consistent with the policy intent of the bill and the changes recommended by the Social Services Committee. I assure members that the Supplementary Order Papers I am tabling today are worthy of support. They have no policy impact, except to make the legislation more streamlined and understandable by those who use it. I urge members’ support. I will be happy to respond to members’ queries in due course.

SUE MORONEY (Labour) Link to this

I will make a contribution on the Residential Tenancies Amendment Bill. Although I am not on the Social Services Committee and have not had the opportunity to hear what sounds like some very fine submissions on the bill, the issue of letting fees is an important one in every single community in our country, none more so than in the community of Hamilton.

Even though we are in the Chamber debating, once again, legislation that started out as good, robust Labour Government legislation, it is legislation that, yet again, is being watered down by the Government. Even though we are debating such watered-down legislation, at least some progress is starting to be made on this issue, although Labour would like to see much more progress than is possible in the bill before us.

My colleague Moana Mackey spoke in very fine detail about letting fees. This is a classic issue of trying to balance the difference between the haves and the have-nots. Generally, the people who are landlords have the financial capability and therefore the power in this relationship. They not only own their own home that they live in but also have enough financial assets to own other homes that other people can live in. They are the haves.

Then we have the have-nots. They are the people who, for many, many reasons—whether financial or a deliberate decision not to own property—are not in a position of owning and holding property. Therefore, they heavily rely on some form of regulation to protect their interests. As we have heard, those protections are currently not strong enough. However, I would argue that the bill before us does not make them strong enough. It does make some improvements, and I acknowledge the Minister of Housing for his work on that, but we need to go an awful lot further. The Minister has picked up a previous Minister’s work, and good on him for doing that.

I will dispel a myth in relation to what I will call the Rugby World Cup amendment so that people understand what I am talking about. Labour members are proposing giving tenants some certainty in the situation where a major event comes along and landlords see an opportunity to make a lot of money because accommodation needs will be very high in their city. I want to dispel the myth that this is an Auckland-only issue. We are talking about the Rugby World Cup, and the city I live in, Hamilton, will have exactly this issue, as well. On behalf of tenants in Hamilton, I support Labour’s amendment to make sure there are some protections so that people cannot be thrown out of their accommodation in order to make space for landlords to bring in people who are prepared to pay more because of a lack of accommodation in our city. And it will not just be for the Hamilton-based games of the Rugby World Cup, because there is a very good proposal for Hamilton to have a passenger train service during the course of the Rugby World Cup.

Hon PHIL HEATLEY (Minister of Housing) Link to this

On the matter of charging letting fees, I think the Committee should note that up until recently real estate agents had the exclusive right to charge letting fees. They lost that right. All the Residential Tenancies Amendment Bill does is allow all agents, not only real estate agents but also other property managers, to charge letting fees. The ability for them to do it, as recommended by the majority of the Social Services Committee, will reduce the size of letting fees through increased competition.

In fact, I think what will happen is we will find that a whole lot of agents will not charge letting fees at all, just as they have not charged them for decades. That is why we are levelling the playing field by allowing everyone to do it. If they do, that is up to them; they will have to provide the service that goes with it. If they do not, then they provide a point of difference, which, as I said, has been in existence for many decades now.

CHRIS HIPKINS (Labour—Rimutaka) Link to this

By way of introductory remarks, I agree with many of the principles behind the Residential Tenancies Amendment Bill. It is a bill that the Labour Party is generally supportive of—obviously, with our minority report in mind. I think all Kiwis should have some security in where they live. Kiwis are entitled to some certainty in their accommodation arrangements; they need to be able to put down roots. Their kids need to have stability in where they go to school. Where children live has a direct relationship on the stability of their lives, their schooling, their early childhood education, and so forth. Giving people, even those who cannot afford the homeownership dream, stability in their rental arrangements is really important.

People have the right to live peacefully in their homes, even if they rent them, with relatively minimal disruption. They are also entitled to be treated with respect by their landlords. I have been very concerned in the last few days as the media coverage has reported the way some tenants of State houses are being treated in the neighbourhood of Pōmare, which is in my electorate. I think that some of the issues those people are confronting have direct relevance to the debate on this bill. The suggestion is that the Government is not living up to its own expectations and the things it talks about in this bill when it comes to State house tenants, particularly those in Pōmare.

In the neighbourhood of Pōmare over 40 Housing New Zealand Corporation houses are empty. Over 30 of those houses have effectively been abandoned by the Housing New Zealand Corporation and it is not putting new tenants in them. To some extent, those houses are uninhabitable, as they have been badly run down. Unfortunately, by simply abandoning them the Minister of Housing has made the problem so much worse. He has basically abandoned that whole community. We now have whole rows of empty houses that are prone to vandalism, and to squatting, in some cases. Simply leaving those houses there and saying that it is an antisocial neighbourhood, which is what the Minister tried to argue this afternoon, makes the problem worse. A whole lot of empty houses in a neighbourhood make the problem worse. Who wants to go and live in a neighbourhood where a whole lot of houses immediately around them will be empty and subject to vandalism, squatting, and the various other things that go on? The Government is effectively creating a ghost town. The Government is exacerbating problems that may have existed before, and it is stereotyping an entire community based on the actions of a small number of people, who are being dealt with in other ways. I think it is absolutely shocking that the Government has all but turned its back on an entire community in my electorate.

DARIEN FENTON (Labour) Link to this

I am pleased to have the opportunity to take a call in the Committee stage of the Residential Tenancies Amendment Bill. First I say how pleased I am, along with my colleagues, that the bill is before the Committee, having been introduced by the previous Labour Government in the last Parliament in May 2008. We were very pleased about it being introduced then, and we looked forward to its speedy passage through the House, particularly with issues such as boarding houses being included in the new legislation. Unfortunately, people who rely on the provisions of the bill have had to wait a very long time. The Social Services Committee did great work and reported back in 2009, and here we are almost 2 years later finally getting to the remaining stages of this bill. It has been a long, long time coming.

I am also disappointed at the potential lost opportunity this bill represents. My very good colleague Moana Mackey has put up some excellent amendments, and I hope the Minister of Housing will genuinely take them into account, because I think there are some very important issues in them.

I had to wonder about the Minister having been so busy, swanning around Northcote. Today in question time he could not resist holding up the report by the North Shore Times—that really good, left-wing local newspaper! Front page—

MOANA MACKEY (Labour) Link to this

I thank the Minister of Housing for his very brief comments on the issue of letting fees. As I said to him, Labour members were not arguing against the level playing field; we were asking why he was opposed to the person who engages the letting agency paying that fee as opposed to the tenant. I do not believe that he addressed that question, at all, and I would very much appreciate it if, in the interests of moving the Committee stage along, he would be prepared to address why he thinks it is unacceptable that the person who engages a business is the one who pays for it. I look forward to his answering that question.

I will pick up on my amendment that was alluded to by my colleague Sue Moroney. It is about what happens to tenants during major events. Over the time of the International Sevens held in Wellington earlier this year, boarding-house tenants in Wellington were evicted en masse. They were told that they had to leave their homes—well, boarding houses are not really homes; their places of residence—so that their rooms could be charged out to tourists here for the rugby. That move was to my knowledge unprecedented; it was unexpected. The police, hospitals, and emergency accommodation providers in Wellington were overwhelmed by the sudden outpouring of extremely vulnerable tenants on to the streets of Wellington. It raised a very, very serious issue. Because there is no such thing as a secure tenancy in New Zealand, that situation is possible.

I live in a very beautiful part of the country, which is incredibly popular over summer. I know people who are told every summer that they have to move out of their homes. For a couple of months they have to move out so that their landlords can rent the places out for three or four times the cost to people who come to the East Coast and Gisborne for their holidays. I think that is incredibly unfair, but I have tried to be extremely reasonable with the Government on this issue. I have not tried to cover off the holiday situation in my amendment; I have kept it to the schedule of major events. Let us keep focused on that for now, and let us say that it is illegal to evict tenants “for the purpose of providing short term accommodation for a major event” as listed in the Major Events Management Act.

This is a serious issue. I have already been approached by tenants in Auckland who have been told by their landlords that they will have to move out over the time of the Rugby World Cup. And why would they not be told that? There is price-gouging going on in Auckland over the Rugby World Cup, with some hotels charging thousands and thousands of dollars a night—

Hon PHIL HEATLEY (Minister of Housing) Link to this

I would like to respond to the member in respect of the amendments she has put forward. They have been presented with some thought and consideration, and they are genuine amendments. I certainly acknowledge that. I will start with the last one, which is the issue about tenants having advocates before the Tenancy Tribunal. It might be worth informing the Committee and those listening and the member that I can give six ways in which tenants can get an advocate, who may or may not be legal counsel, to assist them at the Tenancy Tribunal so that they are in no way disadvantaged. The first way they can have an advocate is if they ask the other party, the landlord, for consent. If a landlord consents to the tenant having an advocate, then the tenant can have an advocate.

There is another way, and that is if the dispute exceeds the sum under this new legislation, which is $6,000. So if we are talking about $6,000 or more being in dispute, then the tenant can certainly have an advocate and in fact can have legal counsel. If the landlord is represented by an advocate or by legal counsel, then that is the third way that a tenant can be represented by an advocate or legal counsel. Fourthly, if the nature of the issue at stake is quite complex, then the Tenancy Tribunal can allow the tenant to have an advocate and perhaps be represented by counsel. So if it is a complex issue the tenant can certainly have an advocate. If there is significant disparity between the two parties, the tenant can have an advocate. If there is a large disparity between the tenant’s knowledge and ability to defend him or herself,and the landlord’s knowledge and ability, then the tenant most certainly can have an advocate. We talk about this as a sort of David and Goliath situation. If a tenant is indeed vulnerable and in a “David” situation, he or she can have an advocate. If the person is a minor or has a disability, then absolutely he or she can be represented by someone approved by the Tenancy Tribunal. A person who is young or who has a disability can have a representative appointed to help him or her.

The last way is that the tribunal itself can rule in favour of the tenant having an advocate. It can do so for a reason other than the David and Goliath situation, or the complexity of the issue, or when the other party has legal advocacy, or whatever the other reasons are, and it can do so even if none of those reasons is fulfilled. So there is no shortage of avenues for a tenant to have an advocate, and that is why we do not believe it is worthwhile supporting the amendment that the member Moana Mackey has put forward, although I acknowledge that it is a serious issue and I appreciate the fact that she did bring it forward.

The other issue she talked about was the issue of tenant liability for damage. Labour would like to reduce the liability for damage accidentally caused by a tenant or by a tenant’s guest to the value of 4 weeks’ rent. We are opposing this Supplementary Order Paper as well, because limiting the liability for damage would impose unfair costs on the landlord, who did not cause the damage, was not the one who allowed the tenant’s guest into the house, and was not there when the tenant accidentally caused the damage. Why would a landlord, the owner of the property, get stuck with the fix-up bill for damage caused by a tenant or a tenant’s guest? National believes in personal responsibility, and we believe that it is important that tenants meet their obligations in this regard. In the same way, we expect—and this legislation makes sure of it—that landlords who are obliged to fix properties and keep them in a decent state of repair should do so as soon as possible. That, of course, as one of the previous speakers said, is one of my challenges and one of Housing New Zealand Corporation’s challenges in Pōmare in the Hutt Valley.

There is also the issue over the Rugby World Cup. Moana Mackey is rightly concerned about the people who, during the Sevens competition, were asked by the owners of the property to vacate so that they could have in residence visitors from overseas and within New Zealand who could pay quite high fees for accommodation in Wellington. Moana Mackey is concerned that that might happen with other national sporting events, particularly the Rugby World Cup. My challenge to the Labour Party and the member if they are concerned about that is to vote for this legislation, because the reason why landlords were previously able to do that in Wellington is that they had to give only 24 hours’ notice for someone to move out. This legislation, which, hopefully, Labour will support, means that they will have to give 28 days’ notice before someone leaves the accommodation. Boarding-house operators will be very reluctant to ask someone to leave 28 days in advance of a sporting event, because they may very well get 27 days of no rent. So we think it is important to support this legislation to fix that problem of people being asked at short notice to leave in order that overseas tourists can take up their positions in that accommodation and pay a much higher rent. This legislation requires boarding-house operators to give 28 days’ notice, not 24 hours’ notice. Had that provision been in place when the Wellington Sevens event was on, I do not think we would have seen as many people asked to leave the premises they were living in in order to make room for those travelling, with deep pockets, from overseas.

The CHAIRPERSON (Lindsay Tisch) Link to this

Before I call Moana Mackey, I just ask that the level of discussion around the Chamber be lowered. It is very difficult to hear what speakers are saying.

MOANA MACKEY (Labour) Link to this

I thank the Minister of Housing for his comprehensive response.

I will take a final call in respect of my last amendment, which is to clause 9. The Minister and I will never see eye to eye on these issues. On the issue of the Tenancy Tribunal, I say to the Minister that it is not happening. If he talks to any of the advocates who are out there, they will tell him that it is not happening. I think it would be far cleaner for the Tenancy Tribunal to say that a tenant can have an advocate. The Tenancy Tribunal has powers to exclude people who are problematic; if someone is vexatious and deliberately dragging the matter out, the tribunal can deal with that. I think that is far easier than having a convoluted list of A, B, C, D, E, F, and G things saying that someone can have an advocate, when we know from the experience of tenants that it is not happening. I think my amendment is a really clean and simple way of dealing with it, and I do not think it will cause the problems that the Minister has outlined.

When it comes to the Rugby World Cup issue, I say that, yes, of course, boarding-house tenants will have more protection under the law. But all it means is that a landlord has to give his or her tenants more notice that he will evict them; it does not mean that he cannot evict them. It means that instead of being able to give 24 hours’ notice that a tenant has to get out, a landlord now has to give 28 days’ or 90 days’ notice—it is just notice. The Minister did not address my question about tenants already being told that they are going to be given 90 days’ notice. We have had plenty of warning that the Rugby World Cup is coming; it is not something that suddenly jumps up overnight, with landlords thinking “Oh, here we go.” So I do not think the Minister addressed either of those questions.

My final amendment is on cleansing orders. The Social Services Committee actually removed the requirement—and Labour voted in favour of this, because we thought it seemed sensible, given the arguments we had heard—for a tenant to be told that a cleansing order had been put on a property. We had heard a lot of argument about why it was ridiculous, why it would be unfair to landlords if something had been cleaned up and the property was all hunky-dory and fine, why should we worry tenants—yada, yada, yada. At the time, that kind of made sense, and I think the select committee was under quite a lot of pressure to report back; we did not have time to investigate as much as we should have done.

Since then I have been contacted by a number of people who work in this area who are really, really concerned that the select committee took it out, and I think it raises enough concern that the Committee of the whole House should put it back in. I have been told that there are not consistent standards. What we are talking about here, largely, is methamphetamine labs. That is what this measure was trying to address. These labs leave residue that is dangerous, and, yes, we should deal with that. The argument we heard was that the cleansing orders was put on the land information memorandum report. Well, tenants do not have enough money to pay for a land information memorandum report in order to see whether there has been a cleansing order. Who will pay up to $300 or $400 on the off chance that there might have been a cleansing order on his or her property for a methamphetamine lab? Tenants simply cannot afford to do that, they are not going to, and they should not be required to.

I have discussed this with the Property Investors Federation. Obviously, it would rather that this provision was not in there, but I have put a 5-year limit on. The federation said that it would be happier with this provision if it had a 5-year limit. So for the 5 years following a cleansing order, during that time, a tenant would need to be notified that there was a cleansing order on that property, and be shown documentation that it had been cleaned up. I think the protection of tenants should be paramount. I think the chemicals we are dealing with here are very dangerous.

I do not think the select committee made this decision with all of the information before it. Yes, it is a requirement under law for a cleansing order to be placed on the land information memorandum. I have been told by councils that that practice is not uniform. Some councils take it off the land information memorandum once the cleansing order has been approved; some leave it on. It is not policed. Some councils do not know when a methamphetamine lab has been found, so they do not know that the cleansing order is meant to be on the land information memorandum.

I say to the Minister that I think there are too many questions in this area. I think the clause the Minister himself drafted and put into the legislation should be put back in, until we are certain that this provision is an undue burden.

As I have said, I have spoken to the Property Investors Federation. It has said that a 5-year time limit would make it far more comfortable with this provision. I welcome any short comments that the Minister has on this. I really hope that this is the one amendment that we can get some agreement on. Again, I say that on all my other amendments he has not really answered my questions, which suggests to me that he does not have an answer to my questions.

Hon PHIL HEATLEY (Minister of Housing) Link to this

I will again respond to Moana Mackey’s amendment to clause 9, because it concerns a serious issue, and she is taking it seriously. She is not trifling with the Committee, at all. Methamphetamine manufacture within some properties, including rental properties, is a problem. It is something that the Minister of Police is certainly getting on top of, but it does happen from time to time.

It is worth explaining to the Committee what the process is when a meth lab is discovered in a property. The manufacture of methamphetamine is illegal, so if anyone is caught manufacturing methamphetamine, two things have to happen: firstly, that person is busted by the police; secondly, the police inform the local district council, which has to—having been informed, and the police have to inform the district council—issue a cleansing order. The council documents that a cleansing order has been placed over the property. So after a methamphetamine lab is found in a property, the police have to go to the council. The council then registers a cleansing order against the property. Once there is a cleansing order, the cleansing order goes to the owner of the property. The owner, in this case a landlord, has to have the property decontaminated to a particular standard—in other words, the property is clean to a standard that people can live in it. So there is a process for when methamphetamine labs are discovered.

In some cases, a property cannot be cleaned, and it needs to be destroyed. We have seen that happen a few times, and in fact we have seen it happen to State houses a couple of times. I think it may have even been in Chris Tremain’s electorate of Napier. The problem of compulsory disclosure, of a landlord having to disclose to a tenant that the house had previously been used for methamphetamine manufacture, may very well drive landlords and owners of properties not to declare to the police or the local council that they have been used as a meth lab. We prefer that the processes in place incentivise the clean-up of properties used for methamphetamine production. We must incentivise that clean-up, or otherwise the destruction, of that home. The only way to do that is to have an easy process, which we have: on discovery of a meth lab, the police find out about it; then the police take action through the courts against the perpetrator, the police inform the district council, the council issue a cleansing order, and the property is cleansed to a very high standard or is otherwise destroyed. That is why we will not support Moana Mackey’s amendment.

I also note for members that renting out contaminated premises is a breach of the Residential Tenancies Act, and the Tenancy Tribunal can terminate the tenancy and award punitive damages to tenants, should they be put in unhealthy and unsafe contaminated conditions. So there is a belt and braces approach to this problem. We want to incentivise the reporting of discovery of methamphetamine or other drug manufacturing labs. We do not want to disincentivise reporting of methamphetamine or other drug manufacturing labs within the rental community.