30-04-2008

Residential Tenancies Amendment Bill - Soon

1. News
2. 2008
3. April

 The original bill would have made boarding house owners subject to many of the same rules as other residential landlords.

The Residential Tenancies Amendment Bill is expected to come to Parliament in May.

Major reform elements proposed in the Bill will include:

• extending the Residential Tenancy Act's coverage to boarding houses
• increasing the jurisdiction of the Tenancy Tribunal and penalties for breaches of the Act
• limiting tenant liability for damage to their rental premises to four weeks' rent if the Tenancy Tribunal is satisfied that the tenant neither caused the damage intentionally or recklessly, nor intentionally or recklessly encouraged or permitted another person to damage the premises
• clarifying responsibility for outgoings such as rates, insurance and water use allows for tenant breaches, such as sub-letting without consent, over-populating the premises or becoming a problem neighbour, to be subject to exemplary damages, as an alternative to eviction
• clarifying the status of body corporate rules, with remedies for tenants if body corporate rules change during a tenancy
• prohibiting tenants being charged `letting fees'
• enabling tenant advocates.

Upon completing first reading stages the Bill is expected to be referred to the Social Services Select Committee for examination.

UNIT TITLES ACT – Proposed reforms

Cabinet has agreed to a Unit Titles Bill, which will replace the Unit Titles Act 1972. It is understood that the bill is to due to be introduced shortly.

Some key reforms will include:

·         Removal of the requirement for a unanimous vote in body corporate decision making. Instead, a 75% agreement will be enough to decide on things such as redevelopments or fixing the roof.

·         Every body corporate will have to draw up a long-term maintenance plan, and apartment or unit owners will contribute annually to the costs.

·         Disputes with bodies corporate be dealt with initially through mediation, or adjudication in the Tenancy Tribunal, rather than through the courts.

·         Potential purchasers be entitled to view a body corporate's audited accounts, rules and maintenance plans.

·         A body corporate will own the common property. If an apartment block has a leaky roof it will be the body corporate's responsibility to fix it, not that of the owner of the top floor apartment.

Separately, the media reports on a recent High Court case which ruled an Aucklander bankrupt for refusing to pay body corporate levies and legal fees. Moreover, his property is to be sold by the official assignee to pay the debt, as well as $35,000 in outstanding repair levies.

LONG TERM RENTING – Update

The Building and Construction Minister Shane Jones has asked his officials to explore long-term leasehold agreements for tenants. In response, the Federation issued a press release expressing cautious support.

A report is due with the Minister by July but it is doubtful that the proposal will be completed in time to be included in a planned Residential Tenancies Amendment Bill.

And in a report from the Social Services Committee on the financial review of the 2006/07 operations of the Housing New Zealand Corporation it noted that “rental properties, income-related rents, and accommodation supplements are among the ways that homes are made more affordable for households who rent”.

In reference to the accommodation supplement, a draft NZPIF position paper has stated:

• NZPIF believes security of tenure could be further enhanced if the State were to direct credit the accommodation supplement (affecting 60,000 people in 2007) and or rent directly to landlords, with beneficiary request and approval [NB: The majority of cases determined by the Tenancy Tribunal were from landlords seeking rent arrears].

HOUSING INITIATIVES - Various

Additional to proposals making tenancies more secure (see above item) the month was dominated by housing affordability issues and Government initiatives.

These included:

• Reviewing the “Welcome Home loans” scheme ((through which HNZC underwrites the loans some first-home buyers’ receive from trading banks) NB: Figures prepared for the Department of Prime Ministers’ house prices unit say couples in rental homes and unable to buy in even the cheapest 25 per cent of the market need an average deposit of $122,000.)

• Progressing the Housing Affordability Bill which is aimed at giving Councils new ways of encouraging affordable housing, including giving them the power to require developers to include cheap housing in new subdivisions and
• Proposals to tweak the general building consent process (thus reducing housing costs)

REAL ESTATE LAW – Oral hearings

The justice and electoral select Committee continued to hear oral testimony on the reforming the Real Estate Agents Act.

Of interest to the Federation was the submission of the Consumers’ Institute. CI backed the new legislation as a whole but also expressed concern about the security of trust accounts. It said: “While property managers do pose less risk to consumers than other real estate services, it seems sensible when there is a major redrafting of the law to include them".

More than 800 submissions have been made on the bill - many from real estate agents - meaning MPs will be working extended hours to hear from all parties.

LAND TRASFER ACT - UPDATING

The Law Commission is currently reviewing the Land Transfer Act 1952 (governing the sale and transfer of property) with a view to modernising it. (See: http://www.lawcom.govt.nz/ProjectTermsOfReference.aspx?ProjectID=139)

The Commission expects to have a final report ready by the end of the year.

MEETING WITH DBH OFFICIAL

As part of a regular contact program, a meeting in Auckland attended by the Federation Vice President – Andrew King, was held with Greg Grouskery – the Department of Building & Housing’s Tenancies Manager. GG provided an informal update on official progress on the Residential Tenancies Amendment Bill and the Unit Titles Amendment Bill.