August 2017 Residential Tenancies Amendment Bill (No 2)

To:

Justice and Electoral Committee

 

Submitter:

Rural Women New Zealand

Level 5, Technology One House

86 Victoria Street, Wellington 6011

 

Proposal:

This Bill amends the Residential Tenancies Act 1986 in order to address issues related to liability for damage to rental premises caused by a tenant; methamphetamine contamination in rental premises; and tenancies over rental premises that are unlawful for residential use.

 

Date: 

4/08/2017

 

 

About RWNZ

1.   Rural Women New Zealand (RWNZ) is a not-for-profit, member-based organisation that reaches into all rural communities and has an authoritative voice on rural environment, health, education and social issues. RWNZ strives to ensure that all rural people have equitable access to services, inequalities are addressed by Government, and the wellbeing of rural communities is considered from the beginning of all policy and legislative development.

 

Introduction

2.   RWNZ welcomes the opportunity to provide a submission to the Justice and Electoral Committee on the Residential Tenancies Amendment Bill (No 2). The amendments in this Bill will create significant improvements to rural landlord and tenant responsibilities, which effectively improve the wellbeing of rural communities.

3.   RWNZ supports the amendments proposed in this Bill. In particular, RWNZ supports changes to the current law that provide the greater protection for landlords when tenants are responsible for careless damage; protect tenants and landlords from methamphetamine contamination; and ensure that the Tribunal has full jurisdiction over cases concerning premises occupied or intended to be occupied for residential purposes. RWNZ’s support, however, is limited to the general intent of the Bill, as RWNZ recognises that the amendments insufficiently respond to the issues that the Bill seeks to address.

 

Specific Comments

4.   RWNZ supports the existence of amendments in this Bill that require tenants to be liable for careless or intentional damage. However, RWNZ believes that this Bill could improve by including a definition of “careless damage” and “intentional damage”. Similarly, the Bill must include a section outlining how damage is to be determined either intentional or accidental. Clarification will prevent subjectivity to ensure that just actions are taken regarding liability.

5.   RWNZ also would like to see an increase in the maximum amount that tenants are required to pay for their careless damage. In many cases, 4 weeks’ rent per incident will not be enough to cover the landlord’s insurance excess. RWNZ recommends that the Bill be amended to require tenants that cause damage intentionally or unintentionally to pay the insurance excess in full. Landlords should not be unjustly liable to pay costs incurred by their tenants for negligence and carelessness.

6.   The Bill could also be improved by including a section that provides strict guidance on how the number of incidents of of damage is to be determined. For example, if a tenant hangs a painting that falls and damages both the wall and the floor, will this be considered one or two incidents of damage? The law must not allow for subjectivity.

7.   RWNZ is in support of the amendments to protect landlords and tenants from the harmful effects of methamphetamine contamination. The manufacture of methamphetamine is a widespread, clandestine issue in New Zealand. In a 2017 media release by the New Zealand Police Association, Senior Constable Stuart Turnbull of the Kawerau Tactical Crime Unity states that the methamphetamine problem in rural areas will surpass that in urban areas. Turnbull explains that this is because there is a smaller risk of getting caught due to a lack of police resources in rural areas.¹

8.   In a 2017 study published by the Centers for Disease Control and Prevention (CRC), a family living in a home previously utilised as a methamphetamine manufacturing lab experienced adverse health effects. The youngest living in the house, a boy aged 7 years, developed asthma-like symptoms, had trouble sleeping and experienced behavioural changes.² The amendments in this Bill implement essential changes to the current law that will reduce the probability of cases such as this from occurring in New Zealand.

9.   RWNZ recommends that the Bill is amended to state that all landlords must test their property for methamphetamine contamination before a tenant moves in if requested by the incoming tenant.

10.  However, RWNZ is extremely concerned with the cost of methamphetamine testing and decontamination. According to the Ministry of Business, Innovation & Employment’s (MBIE) Regulatory impact statement: Protection of tenants and landlords from the effects of methamphetamine contamination, forensic testing for methamphetamine can cost up to $5,000.³

11.  Even with insurance, the actual costs incurred by landlords can still be substantial. For example, AMI Insurance does not cover the cost of testing methamphetamine in a rental house unless contamination is confirmed. testing costs, if done regularly, will be especially burdensome for rural landlords with few tenants to make a profit from. IAG also has a maximum coverage of $30,000 for methamphetamine decontamination.⁴ Effectively, a landlord might still be liable to pay at least $20, 000 if their property is contaminated.

12.  In a case study published by Meth Solutions, a rented property in Hamilton, New Zealand was found to have been methamphetamine contaminated. Initially, the insurer claimed that they would cover the cost for testing and decontamination. Before any work commenced, the insurer realised they could limit cover to $25, 000. This left the owner responsible to pay the remainder of the fees, which totalled $181, 000.⁵ RWNZ does not wish to see this case repeated. It is recommended that the Bill be amended to contain a provision that requires tenants to be responsible for the insurance excess incurred by methamphetamine testing, decontamination and reinstatement.

13.  RWNZ is in full support of the amendments regarding premises unlawful for residential use. All individuals living in New Zealand should be living in homes that meet health and safety standards. Landlords should not be able to exploit their tenants by providing them with housing that is unfit to live in.

 

Conclusion

14.  RWNZ supports the aims of the Residential Tenancies Amendment Bill (No2), although sees its potential for improvement. With further changes, Parliament can work towards implementing a law that will provide more equitable protection for New Zealand’s landlords.

15.  RWNZ thanks the Committee for the opportunity to submit on this Bill.

 

Please contact me to discuss our submission further.

 

 

Yours sincerely

 

 

Penelope England

Chief Executive Officer

Rural Women New Zealand

Email: Penelope.England@ruralwomen.org.nz

 

Melissa Deneau, Uni Michigan – Intl Security, Norms & Cooperation

Executive Assistant to Manager Government, Public Sector & Academic Relationships

Email: Melissa.Deneau@ruralwomen.org.nz

 

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^{1   NZPA. “The War on Meth” New Zealand Police Association. N.p., 31 Jan. 2017. Web. 26 July 2017.
2   Wright J, Kenneally ME, Edwards JW, Walker GS. Adverse Health Effects Associated with Living in a Former Methamphetamine Drug Laboratory – Victoria, Australia, 2015. MMWR Morb Mortal Wkly Rep 2-17;65:1470-1473.
DOI: http://dx.doi.org/10.15585/mmwr.mm6552a3
3   Regulatory impact statement: Protection of tenants and landlords from the effects of methamphetamine contamination. N.p.: Ministry of Business, Innovation & Employment, n.d. PDF.
4   Premier Rental Property Insurance. N.p.: IAG New Zealand Limited, 2017. PDF.
5   “Case Studies – How things go wrong.” MethSolutions. N.p., n.d. Web. 26 July 2017.}