Newman Column: Housing The Nation
Housing a nation is a joint effort between the private sector and the government. Of the 315,000 housing units rented by New Zealanders who don't own their own home, 230,000 are owned by the private sector. Only 70,000 are owned by the state, with around 15,000 owned by local authorities.
In light of that partnership between the state and the private sector it would seem appropriate that the government address some of the long-term problems associated with the Residential Tenancies Act - the law that governs tenancy contracts that concern private property investors.
Last year there were some 42,000 applications to the Tenancy Tribunal, the state agency that deals with disputes that tenants and landlords cannot sort out between themselves. Of these, less than 10% were filed by tenants against their landlords; the majority were against Housing New Zealand.
The Ministry of Housing acknowledges that most landlords readily comply with Tribunal rulings, since failure to do so can result in fines of up to $12,000 and even imprisonment. Local authorities also have the power to fine landlords over health and safety issues, with one landlord in Auckland last year being fined $40,000
In spite of these hefty penalties, in its new Residential Tenancies Amendment Bill that is currently before Parliament the government intends to introduce even more fines. Exemplary damages of up $3,000 will be introduced against landlords who fail to provide their premises in a reasonable state of cleanliness and repair, or who fail to comply with building, health and safety regulations.
The bill also requires landlords to pay for letting fees, which used to be payable by the tenant, and for wastewater in those areas where wastewater is metered.
Under the bill, landlords will no longer need to physically locate a former tenant for a Tenancy Tribunal hearing just as long as the application is made within two months of the tenancy ending. Further, the Tribunal will be given the power to hear and determine applications even though one or both parties fail to appear.
The Bill will also enable the Crown to receive unclaimed bond money from the Bond Centre, an election year windfall gain which could be worth as much as $1.5million.
A major objective of the bill is to bring boarding house tenancies under the auspices of the Residential Tenancy Act. This move is of great concerns to boarding house owners who state that because of the prevalence of tenants with severe mental health problems the Act could force them out of the business. They warn that the government will need to provide more community housing for those people if boarding houses are no longer a viable business.
There is widespread disappointment from the owners of rental housing that the Government's bill has failed to address a major problem for landlords that causes almost 40,000 complaints to the Tenancy Tribunal a year. That problem relates to the process of locating former tenants for the purpose of serving court orders for payment of outstanding rent or damage to the property. The problem occurs because once cases appear before the Tenancy Tribunal and a court order for rent arrears or damages is issued, it then becomes the responsibility of the landlord to provide their former tenant's new address to the Court for the purpose of serving the court order. If the former tenant is a beneficiary, the Ministry of Social Development refuses to provide details of the new address to the Court, effectively using the Privacy Act to prevent the rule of law being upheld. I have drafted a Private Member's Bill to address this issue. The Social Securities (Facilitation of Deductions and Recoveries) Amendment Bill enables the location details of former tenants to be provided by the Ministry of Social Development to an agent of the court for collection purposes, in the same way that fines and other penalties owed to the Crown are collected.
The bill also provides for those beneficiaries, who rent from the private sector and who so choose, to have their rent deducted at source in the same way that they can if the state is their landlord. Having rent deducted at source helps those people who have difficulty budgeting from falling behind in their rent. This is a provision that the government clearly needs to use more often since Housing New Zealand is currently owed $1.4 million in overdue rents with one tenant alone owing $15,651.
Just as the ACT party opposed the introduction of income related rents for state house tenants on the basis that it introduced discrimination into the housing sector based on a family's landlord rather than their need, so too we will be opposing the RTA Bill on the basis that it doesn't address the right issues.