Tenancy law reform submission questions avoid the issues

Anyone who spends the time (several hours) required to complete the online questionnaire about the proposed tenancy reform will soon see how out of touch the current Housing Minister is from actual issues involved with tenancy law.

The biggest issue is unpaid rent, which comprised 72 percent of total applications to the Tenancy Tribunal over the 2017-18 financial year. There were no questions on better managing unpaid rent. Damage to rental property is the next big issue. Again, no questions.

Some questions were so poorly phrased that a rational response was not possible. For instance, a response on the penalty for failing to comply with an improvement notice is sought without reference to the nature of the required improvement. Any dollar amount could only be plucked out of the thin air.

The proposed reform says it wants to balance the rights and obligations between owners and tenants but the actual proposals would make arrangements that are already biased against owners more steeply biased against owners.

The proposals seek rights for Government officials to enter boarding houses irrespective of the privacy of the occupants and irrespective of health and safety laws. Legalised “fishing expedition” evidence gathering rights are sought without any requirement to provide evidence of a reason for such evidence gathering.

Boarding house warrants of fitness are proposed without reference to the contents of such a warrant of fitness. There is no way on assessing whether or not to proceed down the WOF track without knowing what the contents of a WOF would be.

In this approach on a boarding house WOF, the Minister is using the disingenuous approach he used in passing the Healthy Homes Guarantee Act, in which Parliament agreed that extra standards should be imposed on rental accommodation without knowing what those standards would be. The standards are currently being imposed through regulation, thus bypassing Parliament.

The questions skirt around the major issue, the elephant in the room, which is a shortage of affordable housing, both own-your-own and rental. There is nothing in these proposals that will encouraging building more housing. The proposals are so draconian that many owners are selling, which is both reducing the supply of rental property and increasing rents.

What follows is an introduced and edited version of responses submitted via the Ministry’s online survey.

2.1 Removing ‘no cause’ terminations from periodic agreements

The Government wants to remove the ability for owners and managers to end periodic agreements for any reason and without needing to tell the tenant why, and generally extending the notice periods owners must give tenants under a periodic agreement from 42 to 90 days. Owners will still be able to end tenancies where tenants are not meeting their obligations and in other specific situations. This is a current practice by way of 14-day notices to remedy tenancy agreement breaches. This approach works with unpaid rent which is readily verifiable. This approach does not work with disruptive behaviour because witnesses can be bullied into silence, making evidence-gathering impossible. Here are my responses to the questions on the online survey:

2.1.1 The 14-day notice to remedy function covers this and already exists and use of it would just delay the whole process for 14 days.

2.1.2 No. Other examples of unwanted behaviour would include damage, wearing gang patches, setting up a tinnie house, using the property for other criminal activities.

2.1.3 The owner or manager could try to get photographs, letters, emails, affidavits, audio recordings, and video recordings from affected neighbours but these would be difficult to obtain if neighbours were subject to intimidation, which is quite likely from violent and anti-social people. NOTE, the 14-day notice to remedy already exists and already is ineffective for dangerous tenants. The proposed removal of no-cause terminations removes a useful tool from a property manager’s toolbox. I have used the 90-day no-cause terminations once this year to remove a crime family, and two years ago to remove a gang family, and that was after the actions of one of their visitors drove out a long-term neighbouring tenant after unwanted sexual advances.

Extension of the 42-days’ notice after sale of a property

2.1.4 The proposed extension of the 42-days’ notice after sale of a property, if the owner wants to move in, or for use of an employee or family member prolongs an already long process.

2.1.5 When a rental property is sold, the new owner should have no limits on his or her ability to require vacant possession. The proposed change would substantially reduce the rights of the property owner.

2.1.6 An owner should continue to be able to end a tenancy so they can advertise the property for sale with vacant possession.

2.1.7 No. Rights and obligations should be balanced between owners and tenants. If a tenant is only required to give 21 days’ notice to termination without providing a reason the owner should be able to give 21 days’ notice to termination without providing a reason.

2.1.8. No, but having said that, if notice to end is 21 days is for both parties this issue would not arise.

2.1.9 Rights and obligations should be balanced between owners and tenants. If a tenant is only required to give 21 days’ notice to termination without providing a reason the owner should be able to give 21 days’ notice to termination without providing a reason.

2.1.10 The longest length of time it’s taken you to find a new tenant has been within 21 days.

2.1.11 (a) I have used the 90-day no-cause terminations once this year to remove a crime family, and two years ago to remove a gang family, and that was after the actions of one of their visitors drove out a long-term neighbouring tenant after unwanted sexual advances. (b) I issued a 42-day notice when the property was sold.

2.1.12 The main effect of the removal of the 90-day no-cause termination would be that if applicant looks marginal, the owner would prefer to keep a property vacant instead of taking on a problem.

2.1.13 N/A since I am not a public housing provider.

2.1.14 N/A since I am not a public housing provider.

2.1.15 I agree with the assumption that if ‘no cause’ terminations are removed from periodic agreements, landlords could be more likely to offer fixed-term agreements.

Fixed-term tenancies

We have two types of residential tenancy agreement – a periodic tenancy and a fixed-term tenancy. A periodic tenancy may be terminated by the tenant by giving 21 days’ notice or by the owner giving 90 days. A fixed-term tenancy rolls into a periodic tenancy at the end of the fixed term unless the owner confirms that he or she  wishes to fix a new term, or if he wishes to terminate it. The proposals seek to abolish fixed-term tenancies and remove the owner’s ability to end the tenancy by giving 90-days’ notice. That means tenants will remain until they wish to move. Here are the questions for this section and my responses:

2.1.16 I have not used a fixed-term tenancy until now.

2.1.17 Giving one party of an agreement the right to renew, extend or modify an agreement, in this case a fixed-term tenancy, removes mutuality from the mutual agreement. This problem may be removed by changing the phrasing to owners and tenants may renew, extend or modify an agreement by mutual agreement.

2.1.18. The impact of setting a minimum length to a fixed-term agreement would depend on the length of the minimum term. For instance, three months would differ greatly from three years. No consideration has been given to the impact on both parties of a change of circumstances in the middle of a fixed-term agreement. A suitable minimum length would three months.

2.1.19 The best arrangement for periodic tenancies is 21-days’ notice of termination with no reason for both parties.

2.1.20 The best way for the Government to meet its objective to improve security and stability for tenants is to provide incentives for owners and developers to increase the supply of affordable accommodation.

2.1.21 The Government should not further investigate removing fixed-term tenancies from the market because they provide certainty for both parties.

2.1.22 The best arrangement to balance security for tenants and owners for periodic tenancies is 21-days’ notice of termination with no reason for both parties.

Tenant responsibilities

2.2.1 There has been disagreement with a tenant about whether or not they were meeting their obligations on a number of occasions. But the breaches were identified by reference to the terms of the tenancy agreement.  The matter went to mediation, then adjudication and the matter was resolved.

2.2.2 I don’t think tenants should have more responsibilities for the property they rent other than those already stipulated in the existing Residential Tenancy Act because current responsibilities cover the basic relationship and additional responsibilities may be by mutual agreement.

2.2.3 A tenant’s responsibilities to keep a property “reasonably clean and tidy” makes it clear what sort of behaviour a landlord can expect. Moreover, this requirement has worked for 32 years.

2.2.4 A tenant in a longer-term tenancy could have additional responsibilities for the care and maintenance of the property by mutual agreement only.

2.2.5. Since unpaid rent complaints make up 72 percent of total applications to the Tenancy Tribunal, the only change to tenants’ responsibilities could be stronger law around unpaid rent which could mean charging interest on unpaid rent, the ability to charge tenants’ credit cards, or exemplary damages for refusal to pay rent.

2.2.6 There are not sufficient repercussions for tenants who don’t meet their obligations. For instance, owners should be able to charge interest on unpaid rent, the ability to charge tenants’ credit cards, or exemplary damages for refusal to pay rent. Moreover, tenants who damage properties should be face the criminal charge of wilful damage which carries a penalty of up to seven years in jail.

Owner responsibilities

2.2.7 Owner responsibilities are clearly defined on every Tenancy Services tenancy agreement and in the RTA.

2.2.8 There no other things a landlord should be responsible for. Having said that, an owner should be able to charge interest on unpaid rent, charge tenants’ credit cards, or get exemplary damages for refusal to pay rent. Owners should be able to charge tenants who damage properties with wilful damage which carries a penalty of up to seven years in jail.

2.2.9 Current responsibilities make it clear what tenants can expect from landlords in terms of maintenance. These have worked well for 32 years.

2.2.10 The main changing trend in the housing and rental market is the shortage of affordable accommodation. The Government could help by easing restrictions on building and modification of property and possibly providing tax reductions for owners who provide infill housing on large back lawns of older properties.

2.2.11 There are over-the-top repercussions for owners who allegedly don’t meet their obligations. For instance, the egregious $4000 exemplary damages payable to a tenant for dobbing in an owner for not complying with insulation requirements. This may be triggered by absence of underfloor insulation, which only reduces heat loss by 10% in the three months of winter. The only quantifiable benefit for underfloor insulation is to the insulation provider and installer. There is no perceptible benefit to the tenant other than collecting the fine. There is no perceptible benefit to the Govt in terms of reduced hospitalisation. And the cost is totally on the owner.

Heating and ventilation

2.2.12 The responsibilities for heating and ventilation have been clear since since the Housing Improvement Regulations 1947, which were picked up in the Residential Tenancies Act 1986. As well as requiring a kitchen, living room, bedroom, bathroom, toilet and laundry, and for heating, every living room must be fitted with a fireplace and chimney or other approved form of heating. Bathrooms and toilet rooms were required to have a window opening to the exterior for ventilation. This was fine until 2004, when new National Standards for Air Quality banned open fires in urban areas in a quest to rid the atmosphere of tiny particles called PM10, and urban dwellings were forced to get an approved wood-burner or switch to electric or gas heaters.

Ventilation: To be quite clear, with the exception of dwellings where stormwater is not removed from the section and where there is a leaky roof, the build-up of mould results from how people live in houses and not the houses themselves. This may be tested by leaving the property vacant. I have a four-bedroom house that was turned into a mouldy wreck by one family, yet the next family has lived there for years with no problem. The house has ceiling insulation and has a log-burner in the lounge. I have a flat, insulated in the ceiling, that tended to have a build-up of mould on the south wall. Yet one family lived there for three years and the condition they left it in was identical to how it was when they moved in. (The flat had been painted throughout when they moved in.) I have a nine-flat property with extractor fans in kitchen and bathroom.  The flats are mainly identical. I have had problems with mould in some flats at some times by some people. Different tenants in a flat that has had a mould problem currently live there without mould or condensation issues. Dry heat produced by electric heaters or fires is preferable. The use of unflued portable gas heaters which produce 1 cup of water for every kilowatt hour greatly increase the amount of vapour within dwellings. Such heaters, plus showering, plus cooking, produce condensation that needs to be wiped away every morning and homes ventilated every day by opening windows and doors. Having said that, I have tenants who use portable gas heaters effectively without generating mould simply because they ventilate the property, mainly by leaving the main ranch-slider door partly open during the day when at home. Large-scale immigration brought hundreds of thousands of people from warm climates who try to recreate equatorial temperatures with portable gas heaters without ventilating properties. There also appears to be an increase in locals who know nothing about the need to ventilate.

Heating: The 18C or 20C temperature standard for a dwelling may be achieved in many ways. The amount of heat required depends on the ambient (outside) temperature, the size of the room, and whether the windows and doors are closed and curtains drawn. A simple test may be performed by anyone with a thermometer and may be done by closing the windows, curtains, and doors of a room and powering up the heater to raise the room temperature to 18C, which is a so-called “healthy” standard. A 2400-watt electric fan heater costing just $30 will heat a State-house living room to the required 18C on a winter night. A ban on portable gas heaters would be a good step to achieve dry dwellings and to avert respiratory issues resulting from burnt gas emissions. However, the recent complaints over 15,000 heaters installed in State houses shows that because people have preferences of what they prefer to keep them warm, a one-size fits all rule on heating would be a costly mistake.

2.2.13 It would be as much a mistake to force tenants to use heating/ventilation improvements an owner has installed as it would be to force owners to install them.

Modifications

The submission document asks how can the law better help owners and tenants agree to tenants making reasonable modifications or minor changes to their rental home? The discussion document gives as examples hanging pictures, putting up shelving, affixing furniture or appliances to a wall, or planting a vegetable garden. Property owners have no indication of the level of handyman skills a tenant may have and are likely to be concerned at possible damage resulting from an unskilled person attempting such tasks. Some owners have horror stories of interiors being painted red and black, walls removed, and gang fences constructed. Here are the questions and my responses:

2.3.1 I have also been a tenant and I have had no problem in asking to be able to paint interiors etc.

2.3.2 As an owner I have given permission to plant a vege garden with the requirement to return it to lawn at the end of the tenancy, but withheld permission on painting because I had no confidence in the likely outcome.

2.3.3. A tenant should be required to reverse any modifications they make in rental properties, unless the landlord agrees to take on the modification. Mostly at the end of tenancies, the vege gardens I gave permission for were not returned to lawns, which meant it was over to me to do the job. Lack of follow-through on commitments by former tenants has a big impact on current requests.

2.3.4 If the tenant doesn’t reverse a modification as agreed, I restitution should be paid to restore the property. I don’t think it should be an unlawful act with a potential financial penalty.

2.3.5 Reasonable grounds to object to a tenant’s request to make minor modifications to a rental property would be lack of evidence that the work could be done to a professional standard. Of course, no work that requires a building consent could be contemplated.

2.3.6 A total of 21 working days is not a reasonable amount of time, for an owner to consider a tenant’s request to make minor modifications to a rental property. A better way forward is to include in every tenancy agreement under the “landlord and tenant agree that” section an additional condition that says “The tenant shall not modify the property without the owner’s written consent” with “without the owner’s written consent” in bold.

2.3.7 Any modification should be of a professional standard because that is what is required at the start of a tenancy. Any modification that requires a consent should be out of the question.

2.3.8 There is no type of modification that could be included on a list of alterations tenants have a right to make, without seeking the owner’s permission. The author of these submission questions greatly over-estimates skill levels. Everything listed requires remediation. Even adding hooks or nails for pictures, and fastening furniture or fixing shelves to walls requires filling and painting at the end of a tenancy.

2.3.9 There is no sign that the author of the submission questions has any idea of advantages, disadvantages and impacts of each of the modification options.

2.3.10 Neither option 1, that an owner has 21 days to consider a request to modify after which they are deemed to have agreed, or option 2, that tenants have a statutory right to make modifications, is suitable. As already stated, a better way forward is to include in every tenancy agreement under the “landlord and tenant agree that” section an additional condition that says “The tenant shall not modify the property without the owner’s written consent” with “without the owner’s written consent” in bold.

Pets

The discussion document asks whether the law is fair when it comes to tenants and landlords agreeing whether pets can be kept? The Minister may not be aware that some owners have had to replace carpets urinated and defecated upon by cats and dogs. Some owners have been kept off their properties by savage guard dogs. Others have had to repair doors chewed through by a dog that has been locked inside. Here are the questions and my responses:

2.4.1 A landlord should be able to refuse a tenant’s request to keep a pet without giving a reason. This is because some properties are suitable for pets and some are not. For instance, a multi-unit property with no fenced yards would be unsuitable for a dog.

2.4.3 As an owner, my experience allowing tenants to keep pets at our rental properties has resulted in dog and cat faeces and urine on carpets and chewed through doors from when dogs were locked indoors. One property also had cat faeces in supplied bedding and cat spray half way up the walls in all rooms of a three-bedroom flat. I have also had pets abandoned at our rental properties.

2.4.4 As an owner, I have withheld permission to keep pets at our rental properties because of dog and cat faeces and urine on carpets and chewed through doors from when dogs were locked indoors. One property also had cat faeces in supplied bedding and cat spray half way up the walls in all rooms of a three-bedroom flat.

2.4.6 A better way forward with pets is to include in every tenancy agreement under the “landlord and tenant agree that” section an additional condition that says “The tenant shall not keep a pet without the owner’s written consent” with “without the owner’s written consent” in bold.

2.4.7 Some premises have specific attributes that mean they are inappropriate for some types of pet. For instance, a fenced yard means it is possible to keep a dog, but there are other issues, such as whether the dog whines incessantly when the owner is not there.

2.4.8 Tenants should be responsible to pay for all damage incurred on the property during their tenancy, including damage by pets. The Osaki ruling which offloads payment for damage by pets on to an owner’s insurance should be overturned. Tenants should be held legally responsible for pets left behind at rental property.

2.4.9 I support the introduction of specific obligations in the RTA for tenants who keep pets, in regards to their rental property and the peace and comfort of their neighbours because a pet owner should be responsible for their pets.

Rent

The discussion document asks whether tenants should know how rents are set and how often should rents be increased? Currently, rent may not be increased more frequently than once every six months. The discussion document proceeds on the assumption that rent only ever goes up. Numerous long-term owners would have experienced rents declining.  Here are the questions and my responses:

3.1.1 I have encountered rental bidding, where a prospective tenant offers more than the advertised rent for a property, on a couple of occasions. It arose at viewings by multiple applicants. Those who offered more sought a competitive advantage. However, I still had to find out whether the persons concerned were suitable applicants so they were ranked irrespective of their offering extra money. None of those who offered more ever became tenants of ours.

3.1.2 I have not seen rent bidding as a problem. There is more to letting a tenancy than having an auction to increase the rent. The owner or manager already knows the market rent before advertising.

3.2.1 An application for a rent adjustment under a fixed-term tenancy agreement must be made to the Tenancy Tribunal within three months of the last rent review or from the start of the tenancy. I don’t deal in fixed-term tenancies but remember, markets rise and fall. Anyone happy to be able to seek to adjust rent higher in a fixed-term tenancy every three months should be prepared to adjust it lower every three months in a falling market.

3.2.2 A view that RTA should include guidance on what constitutes ‘substantially exceeding market rent’ shows that the person recommending such a mechanism does not understand a market, which is a place where forces of demand and supply operate, and where buyers and sellers interact. The actual problem in housing, both rental and own your own, is that there is a shortage, and this shortage drives up prices. The Govt should address the issue of making it easier for owners to provide infill housing and incentives to do so.

3.3.1 As an owner I review rent when tenancies change or every year.

3.3.2. I don’t agree that rent increases should only be allowed once every 12 months. Currently they can be increased every 6 months. The market is always changing. Owners and tenants need flexibility.

3.3.3. Owners should not be required to disclose how they will calculate future rent increases when a new tenancy is entered in to. A tenant may ask. An owner will probably disclose how it is done. I have rarely had such a conversation. The RTA summary on the Tenancy Services tenancy agreement stipulates that rent cannot be increased until after 180 days.

Boarding houses

The discussion document wants to know how boarding house tenancies should be treated and how the quality of boarding houses and accountability of boarding house owners can be improved.

A boarding house is where a tenant rents a room, rather than the whole house. They share facilities such as the kitchen and bathroom with the other tenants. A boarding house is occupied, or intended to be occupied, by at least six tenants at any time.

Boarding houses came to New Zealand with British settlement. Every town had a hotel and a boarding house, mainly for single men, and this style of accommodation continued through every wave of housing reform.

A change occurred from the 1960s when psychiatric patients were recommended for accommodation outside of psychiatric hospitals. Sheltered accommodation was progressively closed and people with mental health issues relocated to boarding houses.

Boarding houses became useful for Government-funded “social service providers” who could help marginal applicants find accommodation. Applicants included those from psychiatric units and newly released prisoners.

Large-scale immigration from 2008 which saw up to 70,000 new migrants a year, every year, for 10 years, put substantial pressure on all housing. This meant that whole families were sometimes housed in boarding house rooms.

We always had a no-children policy at boarding houses because we could not guarantee the safety of children and because children can be disruptive and could be highly irritating for single men.

I also found that a couple with behaviour problems living cooped up in a boarding house room could be a recipe for domestic violence, especially when alcohol and drugs are used.

Boarding houses were included in the Residential Tenancies Act since 2010. The law already spells out the rights and responsibilities of both the owner and the tenant, and those rights are already skewed in favour of the tenant. For instance, the owner may end the tenancy by giving 28 days’ notice while the tenant has only to give two days’ notice.

The issues that face boarding house owners and tenants are (a) a shortage of affordable accommodation, (b) behaviour problems by some tenants due to drugs and alcohol and mental health problems, (c) a two-faced approach from Govt services which is displayed by both hostility as well as reliance on the accommodation that is available.

4.1.1. Current responsibilities for boarding house owners need some change. Termination requirements should be balanced to seven days’ notice for both parties instead of the current 48 hours’ notice by tenant not in writing and 28 days’ notice by owner in writing. The written-notice period to pay rent arrears should be reduced from 10 days to seven days. The termination for unpaid rent should fall on the seventh day after notice is given and not 48 hours after the expiry of a 10-day notice. The current notice period allows for two weeks of unpaid rent. If the owner has chosen to collect just one week’s rent as bond, they would be out of pocket for a week’s rent. Owners often choose to collect just one week’s rent, which saves paperwork. The benefit to the Govt of an owner collecting one week’s rent as bond is, for Work and Income clients, less required upfront to start a tenancy.

4.1.2 Current responsibilities for boarding house tenants need some change. Termination requirements should be balanced to seven days’ notice for both parties instead of the current 48 hours’ notice by tenant not in writing and 28 days’ notice by owner in writing. The written-notice period to pay rent arrears should be reduced from 10 days to seven days. The termination for unpaid rent should fall on the seventh day after notice is given and not 48 hours after the expiry of a 10-day notice. The current notice period allows for two weeks of unpaid rent. If the owner has chosen to collect just one week’s rent as bond, they would be out of pocket for a week’s rent. Owners often choose to collect just one week’s rent, which saves paperwork. The benefit to the Govt of an owner collecting one week’s rent as bond is, for Work and Income clients, less required upfront to start a tenancy.

4.1.3 Stronger enforcement powers would not necessarily improve the quality of boarding houses. These reforms are skirting around the actual problem which is one of supply. The quality of “boarding houses” is better increased by greater availability of affordable housing, both rental and own-your-own.

4.1.4 A self-certification regime would not work. Again, such a move is skirting around the actual problem which is one of supply. Standards for housing have existed since 1947. Legislation on the operation of boarding houses has existed since 2010. Requiring a certificate, whether written by the owner or written by some regulator would instantly make illegal operators of those who don’t have a certificate. Those who choose not to go down the path of certification will either continue to operate illegally and pay any fines or withdraw from the market and sell the houses used as boarding houses to first home buyers.

4.1.5 To answer the question on whether a self-certification scheme should focus on the building or the owner, I repeat, a self-certification regime would not work. Again, such a move is skirting around the actual problem which is one of supply. Standards for housing have existed since 1947. Legislation on the operation of boarding houses has existed since 2010. Requiring a certificate, whether written by the owner or written by some regulator would instantly make illegal operators of those who don’t have a certificate. Those who choose not to go down the path of certification will either continue to operate illegally and pay any fines or withdraw from the market and sell the houses used as boarding houses to first home buyers.

4.1.6. No other standards for boarding house would make any self-certification scheme effective.

4.1.7 As a boarding house owner, a self-certification regime would be a total irritation and over-complicate an already complicated and fraught business. It would not be worth while carrying on. The boarding house would be redeveloped.

4.1.8 A warrant of fitness is a check to ensure that a property and/or landlord meets minimum required standards before being granted a licence to operate a boarding house. Would a warrant of fitness lift the standards of boarding houses? I think a WOF would reduce the availability of boarding house rooms. I already have to comply with a building warrant of fitness for fire safety gear. This is an expensive exercise that really only benefits the compliance officer, who charged $211.60 for a 10-minute check, and the council, which charged $150 for the paperwork. I check the gear each month taking roughly the same amount of time doing a check with the same result. A rental property warrant of fitness achieves roughly the same sort of check that a prospective tenant does on viewing the property. An applicant views the room and sees the bed, mattress, chest of drawers, window, curtains, door, locks, the kitchen, the shower rooms, the laundry. He or she can ask about insulation, which few ever do, and ask how electricity and internet is paid for. If a prospective tenant does not like a property they view, they choose not to live there. Before standards may be effectively enforced we have to see what the standards are. The standards included in the trial WOF in Wellington were so extreme that a brand-new high-end property failed to comply. That is the sort of idiocy that owners wish to avoid. The actual problem that these proposed reforms are skirting around is the shortage of affordable accommodation, which means some choose to live in property they do not like. I suspect the authors of this proposed reform have no direct experience of actual boarding houses and instead are responding to a few hysterical news items. As a boarding house owner, a warrant of fitness would be a total irritation and over-complicate an already complicated and fraught business.

4.1.9 The introduction of a boarding house Warrant of Fitness would result in new costs for tenants, landlords and the government and cannot be justified. The actual problem is a shortage of affordable property, both rental and own-your-own. A WOF adds costs to owners that will be passed on to tenants. Some owners would sell. That would further reduce supply. Greater pressure would go on remaining boarding houses, which would further increase rents.

4.1.10 Neither a self-certification regime or a Warrant of Fitness would be effective as “additional protections” for boarding houses. What is needed is more affordable housing, not additional restrictions on existing housing, especially considering that all housing is already covered by substantial legislation.

4.1.11 There should be no WOF for boarding houses. My experience with a building warrant of fitness shows that council supervision is merely cash for paperwork.

4.1.12 The definition of a boarding house, which means residential premises—(a) containing 1 or more boarding rooms along with facilities for communal use by the tenants of the boarding house; and (b) occupied, or intended by the landlord to be occupied, by at least 6 tenants at any one time, is clearly understandable.

4.1.13 Not all room-by-room tenancies should be treated as boarding houses because there is a huge flatting market and such a redefinition would unnecessarily complicate flatting.

Enforcement

The discussion document asks whether the enforcement of tenancy laws be made more effective and efficient? The reform targets owners while the actual problem of enforcement is getting tenants to comply with Tenancy Tribunal orders, especially to do with unpaid rent, which is mostly what the tribunal deals with. Access as of right by government officials to boarding house interiors looks like a breach of the Privacy Act, being a breach of tenants’ rights to privacy. Questions and my responses follow:

5.1.1 I have had tenancy situations where I felt that some form of action was warranted but was unable to take it. This was to do with damage caused by tenants. The damage included holes in walls and damage to flooring resulting from dog faeces and urine. It was clear that the holes in the walls were not accidental. The presence of the dog indoors was entirely at the discretion of the tenant. I wanted to lay wilful damage charges. The police were not interested. When the matter was discussed in the Tenancy Tribunal adjudication I was led through a series of questions which started with whether I had insurance, whether the dog damage was an incident or a number of incidents, and whether the holes were intentional or accidental. The questions were outrageous and gave the appearance of a court trying to excuse a perpetrator for his behaviour while laying the costs on me. I note that under the Crimes Act, wilful damage is a crime that carries a penalty of up to seven years in jail. Why can owners not lay wilful damage charges against those who wilfully damage property?

5.1.2 This question asks to select which tenancy services previously used (if any) and comment on the quality of that service. The main problem I encountered with Tenancy Services is the increasing complexity of making an application to the Tenancy Tribunal online. Specifically, the problem was selecting the correct identity to make the application as. The last three applications required a call to the 0800 number to be stepped through the process. I’ve been putting in applications for 28 years.

Evidence gathering

5.1.3 I don’t think it is appropriate for MBIE to have the power to enter the common spaces of boarding houses, without the prior agreement of at least one of the tenants who have protection under the Privacy Act and the Health and Safety Act. Such a move assumes wrong-doing. Which party is the target of such an evidence-gathering exercise. The tenant or the owner. There should be some evidence of need to require such a draconian move. No evidence of any need has been given. Usual practice for police before conducting a search is evidence upon which to base a search warrant. Such an entry by Government officials into private accommodation should be based on evidence of a need to enter. It should not be a fishing expedition.

5.1.4 The question of a notice period would be irrelevant if MBIE is not given the power to enter the common spaces of boarding houses, without the prior agreement of at least one of the tenants, as already explained.

5.1.5 Likewise, it’s not appropriate for MBIE to carry out audits of landlords or property managers without providing evidence of wrongdoing. Any complaint of wrongdoing should be accompanied by evidence to protect against vexatious complaints. Audits cannot be fishing expeditions.

Enforcement

5.1.6 Any case taken by MBIE to the Tenancy Tribunal representing multiple alleged breaches of the same type must have clear evidence that there were in fact multiple breaches with dates, times, and details of the alleged breach.

5.1.7 It’s not possible to define any level of penalty MBIE could be able to seek when taking a single case representing multiple breaches of the same type without knowing the nature of each breach.

5.1.8. An enforceable undertaking is an agreement between an owner and MBIE that sets out the circumstances that led to a breach of the RTA, the steps that need to be taken to remedy the breach, and a timeframe and consequences for failing to adhere to the agreement. Why impose these on owners and not tenants? Enforceable undertakings should apply to tenants as well.

5.1.9 Why impose improvement notices on owners and not tenants? Improvement notices should apply to tenants as well.

5.1.10 The penalty be for failing to comply with an improvement notice would depend on the nature of the required improvement. It’s not possible to answer this question without knowing that.

5.1.11 Why issue infringement notices in circumstances where a breach of the RTA is straightforward to prove on owners and not tenants? Infringement notices should apply to tenants as well.

5.1.12 It is impossible to say whether infringement notices for owners would be effective in holding owners to account for poor behaviour, or to encourage positive behaviours, without defining poor and positive behaviours.

5.1.13 Unpaid rent would be a situation appropriate to issue an infringement notice.

Exemplary damages

5.1.14 An exemplary damage is a financial penalty paid to an affected person by the person who committed an unlawful act. The maximum amount the Tenancy Tribunal can award as an exemplary damage for each unlawful act ranges from $200 to $4,000, depending on the breach. Since there are 37 unlawful acts listed in the Residential Tenancies Act, it is not possible say in detail whether I think these existing exemplary damage levels are appropriate for breaches considered to be unlawful acts. A total of 26 of these acts warrant damages against an owner which in itself shows an anti-owner bias already built into the Act. Failing to comply with insulation requirements attracts exemplary damages of $4000, which is the top rate, payable to a tenant. Failure to install underfloor insulation attracts this penalty. Underfloor insulation prevents 10% of heat loss in a dwelling while ceiling insulation prevents 30 percent of heat loss. The only time of the year when heat loss is an issue is during the three months of winter. Even then, preventing heat loss is only an issue on seriously cold days. It is difficult to argue that an occupant of any dwelling is affected by the absence of underfloor insulation. Nevertheless, the maximum penalty remains. This is an egregious legislative failure, and is an example of the failure of the exemplary damages regime. If there are to be exemplary damages, they must both reflect the severity of the alleged breach and must be evenly applied on both owners and tenants. Otherwise, the law fails the fairness test.

5.1.15. Unlawful acts include discrimination, harassment of a tenant or neighbour, a landlord’s failure to meet maintenance or health and safety obligations, unlawful entry by a landlord, and abandonment of a premises without reasonable excuse. Unpaid rent should also be considered an unlawful act. Complaints about unpaid rent formed 72 percent of applications to the Tenancy Tribunal in the past financial year.

5.1.16 Changing the name of “exemplary damages” to “penalty” would better clarify its purpose. The penalty should be paid to the Govt as a fine, and not to the other party because it currently operates as an incentive to make a complaint.

5.1.17. I don’t think MBIE should have the ability to apply to the Tenancy Tribunal to award exemplary damages (a ‘penalty’) where unlawful acts have been committed. I lack confidence in the ability of the tribunal to make sound decisions because the application of tenancy law has been muddied over recent years, most notably by Osaki, and the case where all rent was refunded to a tenant after a building was found to be non-compliant. Any penalty depends on the nature of any alleged breach and is impossible to pluck out of thin air.

5.1.18. An owner, tenant, or MBIE should not be able to take a case and seek exemplary damages after 12 months from when the alleged act was committed because if the issue was in fact serious it should be dealt with immediately.

Links

The Reform of the Residential Tenancies Act 1986 discussion document may be downloaded from here.

You may email your submission to RTAreform@mbie.govt.nz .

The MBIE online submission is available here .

Submission author

Mike Butler

Stop the War on Tenancies spokesman

October 21, 2018

Downloadable form of this Document: Tenancy law reform submissionMB