Volume 2 - Issue 8 July 2019

IN THIS ISSUE     RTAB2    |    Section 45a  |    Wastewater Analysis
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RTAB2 HAS PASSED AND IS NOW AN ACT

The Residential Tenancies Amendment Bill 2 became a New Zealand Act on Wednesday as it passed its final reading and now seeks Royal Assent, which it will receive.
 
This is great news for Landlords, Property Managers and Tenants alike, as it provides clarification around the issue of contaminated properties. The Regulations are still to be made, however, the Housing Minister has indicated they will draw strongly from the existing framework within New Zealand Standard NZS8510:2017, the Governments own Chief Science Advisor’s report and internationally recognised scientific peer reviewed publications on methamphetamine contamination.

Great news for Landlords, Property Managers and Tenants alike
Meth Xpert have released many a newsletter on this Bill, and have reiterated time and time again that protecting your investments by reducing your risk was sound business practice.

There are many reasons to have continued to test Pre-Tenancy and Post Tenancy, but one of the most striking is contained within this Act in Schedule 1AA, Section 16 Existing Tenancies.
 
This section states “An amendment applies to a tenancy whether the tenancy commences before, on, or after the commencement date.”  Meaning, if you have not tested for Meth prior to renting the property, and that tenant is now residing in methamphetamine contamination, then you are now liable under this Act, and all the applicable sections and fines, and not just the previous Act.

Section 45A Protection From Liability For Landlord Who Complies With Contaminant Regulations

There is another key point that was inserted into the Bill (now Act) within a supplementary order Paper before the reading, which has property investors heads spinning. 
 
Section 45A Protection From Liability For Landlord Who Complies With Contaminant Regulations.
 
The title says it all: Protection from Liability for landlord who COMPLIES with contamination regulations. That is, when you COMPLY with the meth testing regulations set, and only when you COMPLY, are you protected from liability.

Ignorance of the Law is not an excuse

For the benefit of our clients, we have applied this section to the following scenario:
 
A new tenant is concerned that her child is getting sick all the time, and has discovered, from her own investigations that there is methamphetamine contamination in their new rental property.  The tenant engages Company A who conduct a methamphetamine test in accordance with the regulations set. The test concludes there are levels that exceed the prescribed levels within the Regulations. Naturally the tenant is very upset and wishes to raise a claim, seeking damages and a ruling from the Tenancy Tribunal that the Landlord has provided her with a contaminated property.
 
This would suggest the Landlord would be liable resulting in fines and damages being paid to the tenant. However, before the existing tenancy began, the Landlord had engaged Company B to conduct a methamphetamine test, this testing also complied with the regulations, and the results concluded there were minor concentrations of methamphetamine under the limit prescribed by the regulations, meaning they property was not considered contaminated as defined within the act (The levels detected were under the those prescribed within the regulations).
 
As the Landlord has complied with regulations within the Act (as per the title of the section 45a) by conducting Pre-Tenancy/Post-Tenancy Testing, the landlord has protection from liability.

The Residential Tenancy Amendment Act 2 strikes a great balance between landlords and tenants
Given the landlords Insurance disclosure obligations within section one of the Act, which will be enforceable for new tenancies after the day of royal accent, it will be interesting to see how insurance companies react to policy requirements around pre/post tenancy assessments.
 
Overall the Residential Tenancy Amendment Act 2 strikes a great balance between landlords and tenants, it addressees some valid concerns around unjustified displacement of tenants due to minor contamination. It also takes a sensible approach to decontamination, in terms of if a portion of the property can be adequacy isolated, the tenancy can continue, as long as the contaminated areas are being decontaminated in accordance with regulations under the Act. If there is adequate proof that a tenant is responsible for an illegal act “punishable by an imprisonable offence” (use of a class A drug under the Misuse of Drugs Act) they are liable for all costs involved with decontamination.   

$1.4M worth of methamphetamine is being used EVERYDAY nationwide
Recent independent analysis of wastewater estimates $1.4M worth of methamphetamine is being used EVERYDAY nationwide. Let’s think about that for a second, that’s $1.4M consumed yesterday in New Zealand properties, its $1.4M worth today, and it will be the same tomorrow. That’s close to $10M of methamphetamine in New Zealand Properties this Week, over a year that can be extrapolated out to $510M of methamphetamine used in New Zealand Properties every year.

The question is, how long will it take to contaminate a landlords property above the levels prescribed within the Act. You can also bet your bottom dollar, that a user will be more likely to use meth in places that they will not be held liable, (no risk management plan in place or relaxed approach). Ensuring you have a compliant methamphetamine risk management strategy is crucial to mitigate the risk of falling a financial victim should the tenancy tribunal find there is not adequate proof to hold a tenant liable, or an insurance claim is declined because they don’t have sufficient proof to hold a tenant liable.
 
Meth Xpert NZ are happy to discuss the implementation of a methamphetamine risk management strategy for landlords. Rest assured the regulations will be upon us before we know it, we strongly advise ensuring your property is compliant before the enforcement of the regulations.
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