Making it easier to find absconding tenants
28 Feb 2005
The NZPIF has presented a submission on information matching between Government Departments. We believe that No government agency or its processes should shield those who have broken laws or contracts or those who are deliberately avoiding their financial obligations.
The Social Services Select Committee has asked for submissions on the Housing Restructuring and Tenancy Matters (Information Matching) Amendment Bill.
This Bill enables Housing NZ to supply to the Ministry of Social Development (MSD) information relating to its tenants, including address for service details. The MSD will be able to match this data against its own records and matches may enable further action to be taken including recovery or enforcement of debts.
Clearly there are significant shortcomings and serious risk to the Government and taxpayers, with the on-going abuse and cheating, and it is therefore proper that the Bill is introduced.
The NZ Property Investors Federation is largely in favour of the Bill. However the Federation submits that the bill should be extended and enable MSD to supply the Department of Courts and its officials’ specific address for service data, so that improved tracking and better enforcement of court-ordered money orders maybe enforced.
A major and ongoing issue for property investors and landlords, both in the public and private sectors, is the financial exposure and frustration incurred in the poor recourse and recovery of monies for rental default or damage to the landlord’s property.
According to figures issued by Tenancy Services, every year, over 45,000 applications are received from landlords. The biggest issues of concern are the non-payment of rent or rent arrears by tenants and there are countless cases of houses being left damaged or unclean.
From Parliamentary responses some $1.6million of rent arrears are estimated to be owing to the State. As a rough estimate of the size of the problem, the Federation estimates that private landlords are owed $5million to $6million.
The present difficulty faced by some state agencies to track debtors and collect on debts, because of inadequate information, enables some defaulting former tenants to evade their financial responsibilities, and risks our enforcement system becoming a joke. There is clearly no acceptable excuse for this non-performance.
It would be of great assistance to the Federation’s members and others if the Act were sufficiently framed to allow the exchange of address for service information between relevant government agencies and those sanctioned by a Tenancy Tribunal or a Court order for the enforcement of money orders.
The imminent launch of the Tenancy Tribunal decisions database should be seen as an excellent example of what can be achieved to assist both public and private sector landlords. Extending this Bill would continue in this positive direction.
Submission of the
New Zealand Property Investors’ Federation Inc
to the
Social Services Select Committee
examining the
Housing Restructuring and Tenancy Matters (Information Matching) Amendment Bill
February 2006
Craig Paddon
President
New Zealand Property Investors’ Federation Inc
PO Box 20039
Bishopdale
Christchurch
SUBMISSION
This submission has been prepared by the New Zealand Property Investors’ Federation Inc in response to invitations to comment on the Housing Restructuring and Tenancy Matters (Information Matching) Amendment Bill.
The Federation established in 1983, comprises eighteen local associations situated throughout New Zealand, and is the national body representing the interests of over 4500 property investors.
The Federation represents and promotes its members’ views on all matters affecting tenancy matters.
The Federation welcomes this opportunity to participate and comment on the bill.
The Federation is largely in favour of the Bill and supports those provisions that enables Housing NZ to supply to the Ministry of Social Development (MSD) information relating to its tenants, including address for service details. The MSD will be able to match this data against its own records and matches may enable further action to be taken including recovery or enforcement of debts.
The Federation submits that the bill should be extended and enable MSD to supply the Department of Courts and its officials, specific address for service data, so that improved tracking and better enforcement of court-ordered money orders maybe enforced.
DISCUSSION
Amongst other aims the Bill has been introduced to help minimise and recover debts to the Crown and help the detection of fraud. Key provisions of the bill enable the matching of certain data between the relevant departments so the State may be able to track the delinquents.
Clearly there are significant shortcomings and serious risk to the Government and taxpayers, with the on-going abuse and cheating, and it is therefore proper that the Bill is introduced.
To illustrate this point, statistics quoted by the Minister of Housing (December 2005) show that in 2005 there were nearly 7,000 state tenants with paying boarders. The board payments are not taken into account when tenants' income-related rents are calculated and this amounts to a situation where the State and taxpayers are being ripped-off.
Worse, the abuse and cheating goes further. A major and ongoing issue for property investors and landlords, both in the public and private sectors, is the financial exposure and frustration incurred in the poor recourse and recovery of monies for rental default or damage to the landlord’s property.
According to figures issued by Tenancy Services, every year, over 45,000 applications are received from landlords. The biggest issues of concern are the non-payment of rent or rent arrears by tenants and there are countless cases of houses being left damaged or unclean.
From Parliamentary responses some $1.6million of rent arrears are estimated to be owing to the State. As a rough estimate of the size of the problem, the Federation estimates that private landlords are owed $5million to $6million.
Damage to premises (e.g. defaced, punched and kicked in walls, windows smashed and fittings broken or removed), like Housing NZ, is also a major problem confronting the private sector.
It is estimated that some $43million was spent on repairs to damaged state houses last year (NZ Herald 4/10/04). Whilst no figure is available for the private rental market, the Federation estimates the figure must be at least of the same order given the higher number of privately held properties.
The frustration with the financial non-performance of former tenants is further exacerbated with the current inability, or difficulty, to track down irresponsible former tenants who have conveniently “disappeared” without paying their debts. In many cases, former tenants are already known to the State. The ultimate consequence, of course, is that this group of persons go on elsewhere to avoid paying rent and leave houses in poor repair.
The present difficulty faced by some state agencies to track debtors and collect on debts, because of inadequate information, enables some defaulting former tenants to evade their financial responsibilities, and risks our enforcement system becoming a joke. There is clearly no acceptable excuse for this non-performance.
The title of the Bill has implicitly identified this problem with proposed legislation that enables the matching of specific data between HNZ and MSD albeit only to recover debts owed to the Crown.
Although not currently referenced within the Bill the Federation wishes to draw to the Committees’ attention a recent precedent concerning data matching between official agencies that is crucially important in the wider context.
The Ombudsman’s ruling given in 2002 [which the Government tried to delay and overturn through a High Court declaratory judgement that was subsequently discontinued in May 2003] enabled an interim system for a “data-matching” system of address for service amongst relevant agencies for landlords (with a Tenancy Tribunal ruling) to locate defaulting tenants who may be known to the State. For their part, the Department of Courts can with limitations, trace the former tenant when a new bond is lodged, or through MSD (if the tenant is a beneficiary), and hence enforce Tribunal money orders.
It is the Federation’s submission that the current Bill affords an excellent legislative opportunity to acknowledge formally and codify the Ombudsman’s ruling and other informal electronic information matching powers. It is important that the Ombudsman’s ruling is not sidestepped or ignored.
It is noted that the Department of Courts already data matches with a range of departments including MSD, the Inland Revenue, Internal Affairs and the NZ Customs Service.
At this juncture, it is important to note that the Federation is not advocating that private landlords access address for service details directly. Rather, the address for service details should be made available to another authorised Crown agency, if matched, so as they maybe better able to execute their enforcement duties. The Federation foresees no negative ramifications of this course of action when the proper privacy considerations are applied.
To reiterate a previous point, the Federation submits that if the Government were serious about improving the Act, it should use this amendment bill as an opportunity to sort out transparency and logistical difficulties involving the MSD to routinely supply address for service data of its defaulting clients to an officer of the court for the purpose of serving Tenancy Tribunal orders.
The Federation also takes this opportunity to highlight another information-related position that shows that the Government can usefully support better protection for landlords. It is understood that from July 2006 the public will be able to search a Department for Building and Housing/Ministry of Justice website containing all Tenancy Tribunal decisions The promised and long awaited Tenancy Tribunal decisions database should go a long way to help mitigate the problems with some tenants and it is urged that this official database be a model for closer cooperation between HNZC and the Department of Courts.
The above discussion leads the Federation to the strong recommendation that the current Bill needs to go further in scope and the Government must have a higher level of ambition in order to better protect and give confidence to consumers and industry as it seeks to protect its own systems and enforce its debts.
EXTENSIONS SOUGHT
The Federation recommends that the Bill be extended to include the following amendments:
- Part 1 Clause 5
New s66 – That the Department of Courts be included as an agency authorised to receive data matching information from the Housing New Zealand Corporation.
- Part 1 Clause 5
New s67 – That the Department of Courts be included for the purposes of recovering debts or orders made by the Tenancy Tribunal or the Courts.
- Part 1 Clause 5
New s68 – That the Department of Courts personnel be authorised to obtain address for service information from the Housing New Zealand Corporation.
CONCLUDING REMARKS
The Federation supports the general thrust of the Bill and submits further that authority should be extended to include the Department of Courts to data match with the Housing New Zealand Corporation. No government agency or its processes should shield those who have broken laws or contracts or those who are deliberately avoiding their financial obligations.
The extensions, as outlined above, includes and aids an important department of state in the ability to contact debtors and in the enforcement of civil judgement orders ordered by the Courts.
It would be of great assistance to the Federation’s members and others if the Act were sufficiently framed to allow the exchange of address for service information between relevant government agencies and those sanctioned by a Tenancy Tribunal or a Court order for the enforcement of money orders.
The imminent launch of the Tenancy Tribunal decisions database should be seen as an excellent example of what can be achieved to assist both public and private sector landlords.
The Federation requests an opportunity to appear before the Select Committee to go through the key points raised in this submission and answer any queries.
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