Testing times ahead

There are small but hugely significant changes to the Residential Tenancies Act that have largely gone unnoticed and it has nothing to do with the pending reforms

Are you ready for the changes to the Residential Tenancies Act that are due to come into law as of the 1st of February 2021? “Hang on! Isn’t the Residential Tenancies Amendment Act 2020 coming into force on the 11th of February?” I hear you ask.

Yes, it is, but what about the Residential Tenancies Amendment Act 2019? You remember, the bill that made changes because of the infamous Osaki case that meant tenants were no longer liable for accidental damage?

This is also the amendment that was going to set standards on what levels of contamination are before a property becomes uninhabitable including our old nemesis, Methamphetamine!

On the 30th of July 2019, the Residential Tenancies Amendment Act 2019 (RTAA 2019) became law. This bill covered a number of things such as limits around tenant’s liability for accidental damage, giving jurisdiction to the Tenancy Tribunal to make rulings on unlawful residential dwellings as well as introducing amendments relating to methamphetamine and other contaminants. This includes setting the standards for what acceptable levels of contamination is before a property is deemed to be uninhabitable. The 2019 bill states that those amendments have to come into effect within 18 months of the bill getting royal assent. Those 18 months are up on the 31st of January 2021, meaning a legally bound standard will become law. But before we look at what the amendments are, let me take you on a brief history lesson around the boom and bust of the meth testing industry.

The birth of the meth testing industry

Back in 2010, a report was commissioned and published by the Ministry of Health due to the increase of meth laboratories around New Zealand. The detection of ‘clan labs’ by the New Zealand Police had increased from 9 in 2000 to 135 in 2009.^[1] This document outlined what steps should be taken for the remediation of ‘clan labs’, stating that “The Ministry of Health currently recommends that surface wipes for methamphetamine not exceed a concentration of 0.5 μg/100 cm2 as the acceptable post-remediation re-occupancy level for a dwelling that has been used as a clan meth lab.”

All well and good, but somehow, this standard was adapted, largely through the fault of the Tenancy Tribunal, as the acceptable level for contaminated properties where meth had been consumed as well as contamination from manufacturing. This led to the birth and rapid expansion of the meth testing industry.

Scepticism grows

 As more and more cases started appearing in the Tribunal, particularly from 2015 onwards, there were concerns that an industry was growing without regulation or any specific recognised training meaning that it was open to abuse from cowboy operators and people with a conflict of interest. More and more cases made their way to the Tribunal and as the Tribunal had set the standard of 0.5μg/100cm2 (as stated in the 2010 guidelines) for all properties, the floodgate for Tribunal claims and evictions opened, and a tsunami of claims was made. Tenants were evicted from their homes as properties were deemed to be uninhabitable as section 59A of the RTA was enforced meaning that tenants could be given only 7 days’ notice to move. Five figure claims to the Tribunal by both landlords and tenants were not uncommon. The Tribunal decided that for claims to be valid from landlords, there had to be a pre-tenancy test to prove the property was clean and an end of tenancy test so if levels of meth had increased above the 0.5μg/100cm2 standard, the tenant would be liable for the clean-up. This led to pre-tenancy testing becoming almost mandatory within the property management industry.

People, including myself, started to publicly question the morality of the people doing the testing and clean-up work and asked whether this was just a giant scam. Millions of dollars were being paid out in insurance claims and being awarded through the Tribunal. Millions of dollars were being paid to testers as well as remediation and cleaning companies. People were losing their homes and investors were losing thousands of dollars.

Setting the standards

 At this point, the Government decided to act and on the 2nd of June 2016, the Ministry of Business, Innovation & Employment appointed a committee to help develop new acceptable standards for meth testing. The only problem with this committee was the fact that 50% of 18 member committee were representatives of the meth testing and remediation industries^[2]. It was simply in their interest to set the standards as low as possible. They adopted a new standard of 1.5μg/100cm2 maximum levels of contamination. The publication NZS 8510:2017^[3] was introduced and this would be the standard that the Tribunal would now use as it was the most up to date document.

The Tribunal cases just continued to grow, and it was now being reported that Housing New Zealand was spending millions of dollars of taxpayer money on cleaning and remediating thousands of houses.

Enter Mr Twyford and Sir Peter Gluckman

 Everything changed when the Labour-led coalition took power from National in October 2017. In what was probably the best decision of his political career, the much-maligned and then newly appointed Minister of Housing Phil Twyford appointed Sir Peter Gluckman, the then Chief Science Advisor to the New Zealand Prime Minister, to investigate the risk of methamphetamine contamination. On the 29th of May 2018, the report was published, and the meth testing industry was busted.

There is no doubt that this report was a bombshell when it was released. It recommended that the standard that should be adopted was 15μg/100cm2, and even then, he noted that this was conservative. He was also critical of the use of composite testing, using multiple wipes rather than the more expensive discreet individual testing, coming to the conclusion that “single composite sample, as permitted in NZS 8510:2017, has limited value in accurately reflecting levels of risk, and depending on how the data are integrated can lead to quite misleading interpretation and false impressions of high exposure, triggering another round of expensive testing”.^[4] He strongly recommended that initial testing should not involve composite testing as it could lead to a false positive.

HNZ immediately stopped testing their properties for methamphetamine and this forced the Tenancy Tribunal to adopt the Gluckman report as the new standard. The public outcry was substantial, and the fallout was immense, particularly for HNZ who unfairly copped a lot of criticism for its policy around meth testing. In retrospect, all they were doing was following the standards set by the Tribunal.

One industry that had suffered through the meth debacle was the insurance industry as they found themselves paying out millions in insurance claims for so-called meth contaminated properties. However, many of these companies decided to ignore the Gluckman report and stick with the standards set in NZS 8150:2017 meaning that pre-testing was compulsory, and claims could be made for anything over 1.5ug/100cm2.  And this is where we are today. Insurance and the Tribunal working to two different standards.

What is the standard and what happens next?

 With the inception of the RTAA 2019, we have two new sections to the RTA which are still to come into effect but once the 18-month deadline takes effect on the 31st of January 2021, they must be introduced to the RTA. What are the sections?

Section 59B of the RTA: Termination where regulations prescribe testing methods and maximum inhabitable level of contaminant. In short, this section outlines when a property becomes inhabitable due to levels of contamination and what notice can be given.^[5]

Section 45A of the RTA: Protection from liability for landlords who complies with contaminant regulations. In short, this section states that if landlords did not know the property is contaminated prior to renting it out, they are not liable to the tenant.

These new sections also apply to boarding house tenancies.

So, what happens next?

Put it simply, I have no idea. There have been no murmurings from Tenancy Services or the Housing Minister that this is being worked on and standards for contamination will be formally set. Maybe it has just been forgotten about which wouldn’t surprise me considering what we have had to go through. Maybe they are quietly working on this and will announce this on the 1st of February 2021.

One thing is for sure, the standards need to be formally set so we can finally put an end to this sorry state of affairs. I ask the Minister to formally adopt the Gluckman report into legislation and this will force insurance companies to follow suit and put an end to the ongoing debacle that has been a sorry episode of the meth testing scam.

David Faulkner

^[1] Guidelines for the Remediation of Clandestine Methamphetamine Laboratory Sites, Ministry of Health, August 2010.

^[2] https://www.standards.govt.nz/touchstone/building/2016/jun/committee-appointed-to-develop-meth-testing-standard/?utm_campaign=ts&utm_medium=feature&utm_source=homepage

^[3] NZS 8510: 2017 Testing and decontamination of methamphetamine-contaminated properties, June 2017

^[4] Office of the Prime Minister’s Chief Science Advisor: Methamphetamine Contamination in residential properties: Exposure, risk levels, and interpretation of standards: Professor Sir Peter Gluckman, ONZ KNZM FRSNZ FMedSci FRS, Chief Science Advisor. 29 May 2018.

^[5] Residential Tenancies Amendment Act 2019