How to prevent a landlord from renting out a shoddy house

Much of New Zealand’s rental housing is in poor condition (44%, according to BRANZ). The intuitive associations between poor housing and poor health are backed up by research, some of which I’ve discussed previously. This state of affairs indicates that current law does not protect renters from harmful housing; it’s for this reason that a rental Warrant of Fitness, under which houses would be checked to ensure they’re safe and healthy, has such currency.

Keen readers of New Zealand legislation might wonder at this situation; there are, after all, laws which refer to minimum standards of housing quality. It’s true – there are ways that rental housing can be improved. One of the problems is that it’s up to renters to make this happen. As I wrote about last time, there are a lot of disincentives for renters to take action to improve their housing – that’s why there’s such a strong case to be made for a WoF.

Another of the problems is, as Lyndon Rogers, at the Social Justice Unit of the Anglican Diocese of Christchurch has pointed out, that the laws that might protect renters are “complex, spread-out and hard to use”. Fortunately for us, he’s written a report, Paper Walls: The Law to Keep Rental Housing Healthy, which is a clear explanation of the laws pertaining to rental housing quality. Read it! It’s great. Follow the green boxes for the case study of Mere, a fictional and remarkably persistent renter with a mouldy house, for an illustration of the assertion of renters’ rights in practice.

One of the many useful things Rogers has done is pinpoint ways that current legislation can be used to improve rental housing.

For now, to take one example: tenants can prevent their landlord from renting their home out again before bringing it up to housing health standards. This could help get our worst houses off the rental market.

Presently, if a house is found to be under standard*, the Tenancy Tribunal can order the landlord to fix the problem, or to compensate the tenant. Rogers makes the point that it’s rational for both landlord and tenant to prefer a payout. In the landlord’s case, it’s easier to pay than to commit to the uncertain costs of fixing a house. In the tenant’s case, it’s easier to accept the money: the tenancy might already be over,** the house might be uninhabitable due to ongoing repairs, or, I would add, the relationship with the landlord might be a bit uncomfortable.

This is a big problem, and one which illustrates one of the many reasons the system does not deal effectively with problems of housing quality. Despite the fact that a court has ruled that a house is below standard, that house can re-appear for rent on Trade Me the very next day, in the same terrible condition.

This is despite the efforts of the tenant to report the house, and the efforts of the adjudicator to investigate the situation. The house will be rented out to other tenants,*** who will experience the same problem. The more energetic might go to the Tenancy Tribunal, but the majority will try to move away or to live alongside the mould, with all its accompanying health effects.*

Rogers suggests that one way around this problem might draw on section 109 of the RTA. This states that if a landlord has committed an unlawful act (such as rented out a house which is below standard) and if it is in the public interest to restrain the landlord from renting the property out in the same condition, the Tribunal can make an order to prevent that.

Obviously, as Rogers suggests, by this stage, a tenant “may have been drained enough without then taking on showing the need for an order that they are unlikely to benefit from themselves”. In this case, there may be a place under the Act for the Ministry of Business, Innovation and Employment to assume conduct of proceedings.

What we need is a test case…

More to come as I continue to read Paper Walls.  

*EDIT 2015: Amendments to the Act will change this. 

* under Section 78(2) of the Residential Tenancies Act (RTA)

** EDIT: If a landlord gives notice when a tenant has filed proceedings in the Tribunal, the tenant can make an (additional) claim to the Tribunal to have that notice set aside as retaliatory (s54 of the RTA). Thanks to Lucy Telfar Barnard for clarifying!

*** though the keenest of renters might think to search the address in the Tenancy Tribunal database before renting it out

4 thoughts on “How to prevent a landlord from renting out a shoddy house

  1. Hi Eli, another great piece – just wanted to point out that the line “indeed, the landlord can give notice as soon as the tenant files proceedings in the Tribunal” isn’t quite right: if a landlord gives notice when a tenant has filed proceedings in the Tribunal, the tenant can make an (additional) claim to the Tribunal to have that notice set aside as retaliatory (s54 of the Residential Tenancies Act 1986).

    1. The Manawatu Tenants Union has long held the belief that a warrant of fitness must be in place on the rental property before any state assistance [ accommodation supplement ] was paid to a landlord,taxpayers pay the accommodation supplement,what is wrong with the idea that the house should be fit for purpose before the tenants move in.

      Kevin Reilly MTU

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