Nelson Property Investors' Association
Phone: 03 547 7718
REPORT ON THE MBIE SEMINAR HELD IN NELSON on
Tuesday 11 October 2016
I am sure the 200 people who attended this seminar appreciated the effort that staff from MBIE and Jenny Leith tenancy adjudicator made to explain the amendments to the Residential Tenancies Act. They also attempted to explain the serious injustices being inflicted on landlords as a result of the Osaki case and the Meth contamination fiasco.
I recorded the meeting and have uploaded this to my dropbox files. In the middle of the recordings I received an urgent phone call about my little granddaughter so a little bit was missed and the recordings are spread over three files!
To hear the recordings paste these files into your browser or control click. If you are not a drop box customer you can still listen by clicking on the play button. You might need to turn up your speakers to hear! Sure I know it is hard tedious work listening to a recording but not many people can take in such matters the first time they hear them.
Based on the questions from the floor there seems to be a wide spread disbelief that tenants who had damaged properties such as breaking windows, staining carpets, and creating holes in walls are no longer held liable for the cost of repairs.
There has been some public and judicial pressure on the Government to fix the problem urgently. A letter from the Principle Tenancy adjudicator uses terms even more reactionary than the ones I used in my opening address to the seminar. Clearly they have major legal crises on their hands which are causing MBIE and the courts to grind to a halt. This file is in pdf format which I cannot easily send to you. The link for this is here. I encourage you to copy and paste into your browser and read it.
The minister Dr Nick Smith addressed the National Conference of the New Zealand Property Federation last weekend. He read out the statement below which I have copied from https://www.beehive.govt.nz/release/tenancy-law-change-damage-claims-being-considered.
At the conference he also said that the issue of Meth contamination was being addressed urgently. Their solution was to increase the threshold of contamination and indicated that provision would be made to enable landlords to remove tenants when they were smoking Meth in a rental.
Tenancy law change on damage claims being considered
15 October, 2016
Tenancy law change on damage claims being considered
The Government is considering changes to the Residential Tenancy Act over when property damage costs can be reclaimed from tenants, Building and Housing Minister Dr Nick Smith says.
“This review has been prompted by recent court decisions and Tenancy Tribunal rulings, which have sparked confusion over how the Residential Tenancy Act (1986) and the Property Law Act (2007) interact. This is resulting in uncertainty for landlords and tenants, and is affecting the effective functioning of the Tenancy Tribunal.
“The issue is tenant damage to a property through carelessness or negligence. The latest court rulings mean landlords cannot recover the costs of this damage where they have insurance, including for their costs such as the excess. The problem with this approach is that it reduces the incentive for tenants to take good care of the property they rent. It also reduces the landlord’s incentive to have insurance as it lessens tenants’ responsibilities.
“My concern about this new interpretation is that it will add to the overall costs of the residential sector, driving up insurance costs and rents. However, we do not wish to return to the situation where tenants may be sued by their landlord’s insurance company for hundreds of thousands of dollars, such as with an accidental house fire.
“The proposal I am considering is that tenants would be liable for damage caused by carelessness or negligence up to the value of their landlord’s insurance excess but not exceeding four weeks’ rent, which is aligned with the standard tenancy bond. A different amount could be mutually agreed if specifically provided for in the tenancy agreement and would enable the tenant, if they wished, to take out their own insurance.
“The tenant would remain fully liable for damage caused intentionally or caused by a criminal act, with no limitation. The landlord would remain liable for fair wear and tear, and any damage caused to the property by an event beyond the tenant’s control, such as a storm or an earthquake.
“I have asked the Ministry of Business, Innovation and Employment to do targeted consultation with tenant and landlord organisations, and the insurance sector, on possible amendments. I am particularly interested in views on what is an appropriate limit on tenants’ liabilities.
“New Zealand has 450,000 tenanted properties, and both tenants and landlords need certainty about their rights and responsibilities. I am looking for a practical solution that will work for both tenants and landlords.”
Finally a word from our organisation that I ask you to read.
I am a bit mystified why the minister is claiming there are 450,000 rental properties in New Zealand. The 2013 census recorded 512,013 in New Zealand. At that time according to the census there were 419,533 rentals provided by the private sector of which 8750 were located in the Nelson Tasman area. These figures co relate with the bonds that MBIE hold. Since 2013 there has been a considerable increase in private rentals. I think it is likely that the 450,000 relates to the number of properties that are likely to suffer from this orchestrated injustice that the government has imposed on us.
Nelson Property Investors Association is a not for profit voluntary organisation. It is an incorporated society with a paid up membership of just over 100. I invite readers to look up our annual accounts on the incorporated society web site. None of our officials are paid nor profit from running the organisation. MBIE made us pay half the cost of them coming to speak to you. This is a nasty injustice of the government department because the bulk of the attendees were not our members so the cost of over $500 for the night has to be funded by the members
I have asked non members to consider joining in order to assist us in our attempt to restore justice.
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