Healthy Homes Guarantee Bill - 10 AUGUST 2016 Initial Briefing to the Government Administration Select Committee - Parliament NZ
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Healthy Homes Guarantee Bill
Initial Briefing to the Government Administration Select Committee
10 AUGUST 2016Contents
Introduction ................................................................................................................ 3
The Residential Tenancies Act 1986 ...................................................................... 3
Residential Tenancies Amendment Act 2016 ..................................................... 3
Structure of the Bill ..................................................................................................... 4
Summary of key changes ........................................................................................... 4
Contents of tenancy agreement .............................................................................. 4
Landlord’s responsibilities ....................................................................................... 5
Ensuring healthy homes ......................................................................................... 6
Policy issues .............................................................................................................. 8
The current drafting excludes boarding house landlords from complying with the
Bill ........................................................................................................................... 8
The penalty for non-compliance with the standards of heating and insulation are
lower than the in the current Act ............................................................................. 9
There are a range of legislative instruments available for requiring compliance in
the Bill ................................................................................................................... 10
Available legislative instruments ....................................................................... 11
There are practicality issues with requiring an indoor temperature standard ........ 15
Clarification is sought on the policy intent behind ‘draught stopping’ and ‘drainage’.
.............................................................................................................................. 15
Draught stopping ............................................................................................... 16
Drainage ........................................................................................................... 16
2Introduction
1. The Ministry of Business, Innovation and Employment (MBIE) has been asked to
assist the Government Administration Select Committee in its consideration of the
Healthy Homes Guarantee Bill (the Bill).
The Residential Tenancies Act 1986
2. The Residential Tenancies Act 1986 (the Act) describes the rights and
responsibilities of tenants and landlords when entering into, maintaining and
terminating a tenancy agreement, including a boarding house tenancy agreement.
3. With regard to housing quality, the Act currently places a general obligation on
landlords to maintain the premises in a reasonable state of cleanliness and repair.
Landlords are further required to comply with all requirements in respect of buildings,
health, and safety under any enactment so far as they apply to the premises
(including the Housing Improvement Regulations 1947).
4. The Act is reasonably prescriptive in nature and creates requirements for tenants and
landlords related to:
a. Form and contents of the tenancy agreement, including contact details and
addresses for service;
b. Bond and rent payments, and a prohibition on charging key money;
c. Rights and obligations of both parties, including rights of entry, and
d. Processes for terminating tenancies and recovery of abandoned premises.
5. The Act additionally provides for the administration, jurisdiction and procedure of the
Tenancy Tribunal.
Residential Tenancies Amendment Act 2016
6. The Residential Tenancies Amendment Act 2016 created regulation-making powers
in respect of smoke alarms and insulation. They require landlords to ensure there are
functioning smoke alarms in the property at the beginning of each tenancy, and that
adequate insulation is provided at the property by 1 July 2019.
7. Housing New Zealand and Community Housing Provider properties where the tenant
is paying an income-related rent were required to comply with all requirements by 1
July 2016.
8. The Residential Tenancies Amendment Act and associated Regulations came into
force on 1 July 2016.
3Structure of the Bill
9. The Bill amends the Residential Tenancies Act 1986 (the principal Act).
10. The Bill is in one Part with seven clauses. Clause five (Landlord’s responsibilities)
commences five years after the date on which the Bill would receive Royal assent.
The remainder of the Bill would commence 12 months after the date on which it
receives Royal assent.
11. Schedule 1A (Amounts for unlawful acts) has also been amended to reflect the new
unlawful act created by the Bill and set the exemplary damages.
Summary of key changes
Contents of tenancy agreement
What the Act currently does
12. Section 13A of the Act prescribes all the information required to be included in a
tenancy agreement. This includes, but is not limited to:
a. Full names and contact details of both parties;
b. An address for service for both parties – the address at which any notification
or document relating to the tenancy will be accepted by either party;
c. The date of commencement of the tenancy and whether the tenancy is fixed
or periodic;
d. Rent payable and all payment details.
13. Parties may also negotiate and agree to additional conditions, provided the tenant is
not contracting out of their rights (section 11(3)).
14. The Residential Tenancies Amendment Act 2016 amended section 13A to require
landlords to include in the tenancy agreement a statement that provides the following
information to the tenant:
a. whether there is any insulation installed in the floors, ceiling or walls at the
premises;
b. details of the location, type, and condition of all insulation that is installed at
the premises;
c. if the tenancy is, or will be, an income-related rent tenancy and requirements
in respect of insulation are imposed on the landlord, an explanation of how
the landlord will comply with those requirements if they have not already.
415. If, despite making all reasonable efforts to do so, the landlord has not been able to
obtain some or all of the information required the landlord may state instead:
a. the information that the landlord has not been able to obtain in respect of the
particular location; and
b. why the landlord has not been able to obtain that information; and
c. confirm that the landlord has made all reasonable efforts to obtain that
information.
16. Failure by a landlord to include a statement on the extent of insulation in the tenancy
agreement is an unlawful act for which a maximum penalty of up to $500 may be
applied.
What the Bill proposes
17. The Bill would amend this section to require every tenancy agreement to include a
statement that the premises meet, at a minimum, the standards prepared and
published on the MBIE website.
18. The Bill would create an unlawful act for a landlord to fail to include this statement in
a tenancy agreement, and an unlawful act for a landlord to breach the guarantee
contained in the statement. Exemplary damages would be a maximum of up to
$3000.
Landlord’s responsibilities
What the Act currently does
19. Section 45 of the Act sets out landlords’ responsibilities in establishing and
maintaining a property to which a tenancy agreement applies. This includes that the
landlord shall:
a. provide the premises in a reasonable state of cleanliness;
b. provide and maintain the premises in a reasonable state of repair having
regard to the age and character of the premises and the period during which
the premises are likely to remain habitable and available for residential
purposes;
c. comply with all requirements in respect of buildings, health, and safety under
any enactment so far as they apply to the premises; and
d. if the premises do not have a reticulated water supply, provide adequate
means for the collection and storage of water.
20. The Residential Tenancies Amendment Act 2016 amended section 45 by adding the
following responsibilities:
5a. comply with all requirements in respect of smoke alarms imposed on the
landlord by regulations;
b. if the tenancy is an income-related rent tenancy, comply with all requirements
in respect of insulation imposed on the landlord by regulations;
c. if the tenancy is not an income-related rent tenancy, comply with any
requirement imposed on the landlord by regulations that provides (generally
or in specified circumstances):
i. for the prohibition of any insulation (or any material or other item
related to insulation) of a specified description; or
ii. that any work, or other activity, of a specified description that is carried
out during the tenancy must be carried out in accordance with a
specified New Zealand Standard or a specified provision of a New
Zealand Standard; or
iii. that specified requirements in relation to thermal resistance (as
defined in the regulations) must be met where any work, or other
activity, of a specified description is carried out during the tenancy;
21. Properties where the tenant is paying an income-related rent must comply with the
insulation requirements by 1 July 2016; where the tenancy is not an income-related
rent tenancy the insulation requirements come into force on 1 July 2019. From 1 July
2016 all rental properties must have a functioning smoke alarm.
22. Failure by a landlord to comply with any of the above responsibilities is an unlawful
act and may result in exemplary damages of up to $4000.
What the Bill proposes
23. The Bill would amend section 45 to create an additional responsibility for landlords to
comply with the standards of heating and insulation given in the new section 132A of
the Bill (described below).
24. Failure by a landlord to comply with any of their responsibilities, including the new
responsibility to comply with the standards for heating and insulation would be an
unlawful act and may result in exemplary damages of up to $3000.
Ensuring healthy homes
What the Act currently does
25. Landlords are required to comply with all requirements in respect of buildings, health,
and safety under any enactment so far as they relate to the premises, in addition to
6the more general requirements to provide the premises in a reasonable state of
repair.
26. Such enactments include the Housing Improvement Regulations 1947. Those
Regulations place requirements on landlords and owner-occupiers that:
a. Every living room shall be fitted with a fireplace and chimney or other
approved form of heating;
b. Every bathroom shall have at least one openable external window or other
means of ventilation;
c. Every habitable room must have an openable external window to allow
natural light and ventilation; plus every other room and internal stairway must
have a window to allow for adequate lighting and ventilation, as defined by
the local authority;
d. Every house must have efficient drainage for the removal of storm water,
surface water, and ground water. No house shall be occupied which is built
on land which is not adequately drained or which is subject to periodic
flooding in times of normal rain;
e. Every house shall be provided with gutters, downpipes, and drains for the
removal of roof water to the satisfaction of the local authority.
f. Under every part of every house where the floor is of timber; construction
there shall be adequate space and vents to ensure proper ventilation for the
protection of the floor from damp and decay;
g. Every house must be free from dampness;
h. The materials of which each house is constructed shall be sound, durable,
and, where subject to the effects of the weather, weatherproof, and shall be
maintained in such a condition.
27. Landlords who fail to meet their obligations in respect of cleanliness, maintenance,
smoke alarms, insulation, or building, or health and safety requirements may be in
breach of the Act and may face exemplary damages of up to $4000.
28. Further, the Tenancy Tribunal is prohibited from making an order that the landlord
may make a monetary payment to the tenant as an alternative to compliance with a
work order if that work order relates to:
a. Smoke alarms;
b. Insulation;
c. Failure to comply with a standard of fitness or other requirement applying by
virtue of section 120C of the Health Act 1956 (which includes the Housing
Improvement Regulations 1947, and
7d. Failure to comply with any other requirement relating to health or safety under
any other enactment.
What the Bill proposes
29. The Bill would require the Ministry of Business, Innovation and Employment to
prepare and publish standards of heating and ventilation on its website in accordance
with what constitutes adequate:
a. Methods of heating;
b. Methods of insulation;
c. Indoor temperatures;
d. Ventilation;
e. Draught stopping, and
f. Drainage.
30. MBIE would be required to describe methods of measuring the adequacy of each of
the matters referred to above, plus any exemptions.
31. The standards must be published no later than 18 months after the Act receives
Royal assent.
Policy issues
32. In its current drafting MBIE does not consider that the Bill would meet its objectives if
implemented.
33. Officials have further identified five key issues the Select Committee may wish to
consider and clarify:
a. The inclusion of boarding house landlords within the scope of the Bill;
b. The current level of exemplary damages for landlords who fail to comply with
the standards of heating and insulation;
c. A range of policy options for enacting the new requirements;
d. The practicality and feasibility of a standard for indoor temperatures, and
e. The policy intent behind requirements for drainage and draught-stopping.
The current drafting excludes boarding house landlords from complying with
the Bill
34. Part 2A of the Act provides for the application of the Act to boarding house tenancies.
It recognises that there are some necessary distinctions between a longer term
tenancy in a private rental, and a boarding house tenancy.
35. For instance, a boarding house landlord must cover the costs of all outgoings such
as internet and electricity payments, unless a tenant’s room has a meter or separate
8connection. In private rentals the landlord must ensure the means of supply for such
utilities but connection and payment is the responsibility of the tenant.
36. Section 66I (Landlord’s ongoing obligation) cites the same responsibilities as for
private landlords in section 45.
37. The Bill states that the minimum standards for heating and insulation would apply to
‘residential premises’ which the Act defines as “as any premises used or intended for
occupation by any person as a place of residence.” The Tenancy Tribunal may
determine that this means a boarding house must comply with section 132A and
meet and the minimum standards. Additionally, section 45 (Landlord’s
responsibilities) has not been specifically excluded from applying to boarding houses
in section 66A.
38. However, as requirements for boarding house landlords to comply with the standards
of heating and insulation under section 132A of the Bill have not been repeated in
Part 2A of the Act, the requirements cannot definitively be said to apply to boarding
houses.
MBIE recommends that the Select Committee:
• Considers whether it is in the intention of the Bill to apply the standards of heating
and insulation to boarding houses.
• If so, instruct the Parliamentary Counsel Office to draft the necessary
amendments.
The penalty for non-compliance with the standards of heating and insulation
are lower than the in the current Act
39. The Residential Tenancies Act 1986 created an unlawful act for landlords who fail to
meet their obligations in respect of cleanliness, maintenance, or building, or health
and safety requirements (section 45(1A)). The maximum exemplary damages the
Tenancy Tribunal could order a landlord to pay was $3000.
40. The Residential Tenancies Amendment Act 2016 amended this unlawful act to
include failure to comply with the smoke alarms and insulation requirements.
41. The Amendment Act also increased the exemplary damages from $3000 to $4000.
42. The Bill amends section 45(1A) to create a requirement for landlords to comply with
the standards of heating and insulation, in addition to their existing obligations.
943. The Bill proposes that the maximum exemplary damages set for a landlord who fails
to meet their obligations in respect of cleanliness, maintenance, building, health and
safety requirements or standards of heating and insulation is $3000. This represents
a reduction in the maximum damages a Tenancy Tribunal may order.
MBIE recommends that the Select Committee:
• Considers whether it is in the intention of the Bill to lower the maximum exemplary
damages a Tenancy Tribunal may order if it finds a landlord in breach of section
45(1A) from $4000 to $3000.
• If not, instruct the Parliamentary Counsel Office to draft the necessary
amendments.
There are a range of legislative instruments available for requiring compliance
in the Bill
Requirements in the Residential Tenancies Act
44. The Act creates requirements upon tenants and landlords by reference to ‘unlawful
acts’ or by prescribing requirements. For instance, notice of a tenancy termination
that does not comply with the correct notice terms may be over-turned by the
Tenancy Tribunal, but is not deemed an unlawful act. Unlawful acts must be specified
as such in the Act.
45. The Residential Tenancies Amendment Act created two new regulation-making
powers to create regulations in respect of smoke alarms and insulation (the
Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016).
46. Landlords are required to comply with these Regulations by section 45(1)(ba) and
45(1)(bc) (Landlord’s responsibilities).
47. The Regulations give specific requirements for how to achieve compliance, for
example, the number and type of smoke alarms and where they must be placed, and
the location and condition of insulation.
48. The requirement for landlords to comply with the Housing Improvement Regulations
1947 which create more specific requirements on housing conditions is provided for
in section 45(1)(c): “comply with all requirements in respect of buildings, health, and
safety under any enactment so far as they apply to the premises.”
10Requirements in the Healthy Homes Guarantee Bill
49. The Bill amends section 45 (Landlord’s responsibilities) to require landlords to
comply with standards which will be prepared and published on MBIE’s website.
50. The Bill prescribes that the standards with which landlords must comply must
describe adequate:
a. methods of heating;
b. methods of insulation;
c. indoor temperatures;
d. ventilation;
e. draught stopping, and
f. drainage.
51. MBIE must also publish standards which describe adequate methods of measuring
the matters above, and any exemptions.
Different legislative instruments are available
52. Landlords must comply with any requirement in section 45 (Landlord’s
responsibilities), including requirements set in Regulations. The current draft of the
Bill sets landlords’ requirements in three ways: prescribed requirements in primary
legislation, Regulations and standards published on the MBIE website.
Regulations
53. As a general rule, regulations provide greater technical detail than their primary,
enabling Act. Regulations may provide details for how to achieve compliance and
reference relevant New Zealand Standards with which compliance may also be
required. Using regulations avoids adding too much detail into the primary Act which
may compromise its generality.
Guidance / Standards
54. The standards the Bill would require MBIE to publish may be considered similar to
guidance with which landlords should comply. In this case, the regulator (MBIE)
issues guidance on how it interprets and sets the requirements provided for in
section 132A of the Bill (Function of Ensuring Healthy Homes).
55. Issuing guidance can be beneficial for promoting best practice and the best ways of
achieving compliance. Guidance is more flexible and easier to change than
regulations or primary legislation.
1156. Table 1 below details some potential instruments for setting requirements with
respect to standards of heating and insulation, for the Committee’s consideration.
MBIE recommends that the Select Committee:
• Considers the range of legislative instruments available to create requirements
with which landlords must comply.
• If this differs from the current drafting of the Bill, instruct the Parliamentary
Counsel Office to draft the necessary amendments.
12Table 1: Potential Legislative Instruments
Instrument Example Benefits Risks
Regulations Residential Tenancies (Smoke Alarms and • Easier to amend than primary • Regulation-making powers in the Act
Insulation) Regulations 2016. legislation (for example, to adapt must stipulate carefully the nature and
to new technologies). extent of Regulations to be made. Must
• Can provide more technical detail be balanced with the need for future-
than an Act. proofing.
• May include a requirement to • May only be amended by the Executive
comply with a New Zealand or Council, rather than delegating.
International Standard, avoiding a amendments directly to Departments.
duplication of effort. • Must be precise but not too
cumbersome or confusing.
Guidance Building Act 2004 - The Chief Executive of MBIE • Can promote best practice without • Cannot create requirements for
may publish guidance information to assist people being limited to legal anything higher than what is required
in complying with the Act (for example, design requirements. by law – best practice is a
guidance for compliance with the Building Code). • Flexible and easy to change. recommendation only.
• Can create certainty about how to
comply, increasing compliance in
the sector.
• Has scope to include photos,
diagrams and other material that
Regulations cannot.Instrument Example Benefits Risks
New Zealand Standards New Zealand Standard 4246:2006 - Energy • Provide a high degree of certainty • Depending on the complexity of the
efficiency - Installing insulation in residential to the sector. Standards required, may take a long
buildings. • Robust, well-evidenced time to develop.
information on how to achieve • Potentially costly to develop, and costs
compliance. must be recovered (currently by selling
• Reduce health and safety risks, Standards to the public).
and show mitigations for existing • Less flexibility to amend Standards
risks. than other options.
Instruments Health and Safety at Work Act 2015 – Minister • Providing for the regulator • Creates two decision-makers (Minister
may approve safe work instruments (WorkSafe) to develop the and Department) which may risk
instrument and for the Minister to delays or differences of opinion in
sign it allows for the Department’s implementation and policy intent.
expertise to be utilised, but allows • Regulations must refer to a safe work
the Government to retain instrument for it to have legal effect.
oversight.
• Still allows for flexibility.
14There are practicality issues with requiring an indoor temperature standard
57. The Bill would require MBIE to describe what constitutes an adequate indoor
temperature when setting the standards for heating and insulation (section
132A(a)(iii)).
58. The most commonly cited adequate indoor temperature, determined by the World
Health Organisation, is a minimum of 18 degrees Celsius, or ideally 21 degrees
Celsius if infants or older people are living at the premises.
59. However, the actual temperature of any indoor space is largely determined by the
occupant’s behaviour. Other factors include the condition of the premises and the
type of heating source used.
60. The Bill creates a requirement for the landlord to comply with the Healthy Homes
Guarantee – the Bill does not include a corresponding requirement for tenants to use
any heating sources or keep the property at a particular temperature.
61. Tenants have a right to the “quiet enjoyment” of their property which means they are
able to choose how to live in their property, so long as they do not breach the Act
(section 38). Many tenants may choose not to use heating sources, or only use them
at certain times and in certain rooms. Often, this is because of budgeting constraints
and the need to balance power bills with other household costs.
62. In MBIE’s view, if a property was provided in a reasonable standard of repair, not in
breach of any of the requirements in the Residential Tenancies Act, Housing
Improvement Regulations, or any other enactment, then it ought to be possible for a
tenant to heat the property to an adequate temperature, or rely on passive heating.
63. MBIE does not consider it practical to hold landlords accountable to a standard that is
dependent upon their tenant’s behaviour. It would be more practical to hold landlords
accountable to the condition and maintenance of the premises which then enable a
tenant to live there comfortably.
MBIE recommends that the Select Committee:
• Re-considers the inclusion of a standard of indoor temperatures in the Healthy
Homes Guarantee with which landlords must comply.
• If the Select Committee agrees, instruct the Parliamentary Counsel Office to draft
Clarification is sought on the policy intent behind ‘draught stopping’ and
the necessary amendments.
‘drainage’.Clarification is sought on the draught stopping and drainage standards
64. The Bill would require MBIE to describe adequate draught stopping and drainage
when it publishes standards of heating and insulation.
65. The Act currently requires landlords to comply with a number of requirements which
may describe a similar policy objective as that intended by the Bill.
Draught stopping
66. Section 17 of the Housing Improvement Regulations 1947 state that:
a. The materials of which each house is constructed shall be sound, durable,
and, where subject to the effects of the weather, weatherproof, and shall be
maintained in such a condition;
b. The walls and ceilings of every habitable room, bathroom, kitchen,
kitchenette, hall, and stairway shall be sheathed, plastered, rendered, or
otherwise treated, and shall be maintained to the satisfaction of the local
authority;
c. Every room in every house shall be adequately floored so as to have a
washable and durable surface, and every floor shall be kept in a good state of
repair free from crevices, holes, and depressions.
67. Other draught issues with a property, such as gaps between the door frame and the
floor, may be remedied easily by the tenant using ‘draught excluders’ and other
impermanent solutions.
Drainage
68. Section 14 of the Housing Improvement Regulations 1947 state that:
a. The site of every house shall, to such extent as the local authority deems
necessary, be provided with efficient drainage for the removal of storm water,
surface water, and ground water. No house shall be occupied which is built
on land which is not adequately drained or which is subject to periodic
flooding in times of normal rain.
b. Every house shall be provided with gutters, downpipes, and drains for the
removal of roof water to the satisfaction of the local authority.
c. Under every part of every house where the floor is of timber construction
there shall be adequate space and vents to ensure proper ventilation for the
protection of the floor from damp and decay.
69. Additionally, section 16 of the Regulations refer specifically to sewerage drainage:
16a. In cases where there is a sewerage system available, every water closet,
urinal, bath, lavatory basin, sink, and other sanitary appliance shall be
connected to the sewerage system by impervious pipes in accordance with
the bylaws or regulations in force in the district;
b. In cases where no sewerage system is available the waste matter from every
sanitary appliance shall be discharged by waste pipe or soil pipe, as the case
may require, into an adequate drainage system connected to an adequate
sewage tank or other adequate means of disposal.
70. Section 15 of the Regulations further state that “every house shall be free from
dampness”. As dampness may be a symptom of inadequate drainage, we consider
this Regulation to be consistent with the drainage requirement proposed in the Bill.
71. In MBIE’s view, these Regulations address what we would describe as adequate
draught stopping and drainage standards.
MBIE recommends that the Select Committee:
• Clarifies the policy intent of the draught stopping and drainage requirements with
MBIE officials, and whether any additional amendments are necessary.
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