The law of unintended consequences

The law of unintended consequences. How one Tribunal decision opened the floodgates to 'Meth' madness.

Towards the end of 2022, the Labour Government finally announced that it would be entrenching into law what levels of Methamphetamine contamination would be deemed unacceptable for human habitation.

Early indication is that the Government will adopt the Gluckman report recommendation of under 15 micrograms per 100 cm2 before a property can be rented out. However, in a surprise announcement, you will not be able to end a tenancy unless the property is contaminated with levels more than 30 micrograms per 100 cm2.

It will finally end the madness around meth contamination that has plagued our industry for the past few years. How did it ever come to this?

In March 2016, an adjudicator in Auckland's North Shore ruled in favour of the tenant who wanted to be released from their fixed-term tenancy agreement. What was so unique about this Tribunal case is that it opened the floodgates to thousands of applications around methamphetamine contamination and was to cause one of the greatest scandals this country has ever seen regarding housing.

Unknown to this adjudicator, their decision would see innocent tenants have their tenancies terminated with only seven days' notice. It would see landlords waste thousands of dollars on unnecessary testing and remediation work. It would see millions of taxpayers' dollars wasted on state housing stock through refurbishments following post-tenancy testing that highlighted what was deemed to be unhabitable dwellings due to excessive levels of meth contamination. It would also cause a giant political scandal, with Labour blaming the National Government for being asleep at the wheel as the scandal unravelled.

The decision led to a boom in the meth testing industry, where anybody could become a self-certified meth tester.

We even had an industry expert warning property managers that every property had to be tested or they would be in breach of their obligations. At the end of this presentation, they announced they had just launched their brand-new meth testing service. I know this as I was there watching in disbelief.

The sad and sorry episode that has divided our industry is nothing short of a national disgrace and embarrassment. No other country in the world took such a draconian stance regarding meth contamination. I doubt that there is enough political will to support this. Still, I believe a public enquiry would be hugely beneficial to ensure that such episodes never happen again.

The Tribunal case that set the wheels of this scandal in motion, involved a tenant which had recently moved into a property, deciding that there was a risk that the property had been contaminated with methamphetamine. At their own expense, the tenant got the property tested using an indicative test. The results came back at 0.53 micrograms per 100 cm2. The tenant was in apparent shock and moved out due to health fears as they were basing their findings off a Ministry of Health document that outlined that the level that was deemed to be uninhabitable was 0.5 micrograms. However, this document had been written for laboratories with no mention of levels caused by smoking. The adjudicator ignored or missed this vital point.

The landlord decided to get more intrusive testing, getting individual readings for each room rather than the first indictive test that took several samples together. The highest reading was in the kitchen at a level of 0.17 micrograms, way under the 0.5 micrograms level. This did not appease the adjudicator. In their eyes, any level of meth contamination was too high. They subsequently ruled in favour of the tenant and awarded costs and compensation as the landlord had failed to provide a clean, safe, and habitable dwelling.

The rule of unforeseen consequences had just been applied.

In the years to come, the Tenancy Tribunal was to become overrun with cases, with the vast majority being from property managers or landlords seeking to terminate the tenancy since the property was uninhabitable due to levels of methamphetamine contamination. The Residential Tenancies Act states that if a property were so severely damaged that it was uninhabitable, the tenancy could be ended with as little as seven days' notice. Hundreds of tenants found themselves being evicted and faced significant costs for cleaning and remediation work.

As public concern grew, the then National Government decided it needed to do something about this. New Zealand Standards formed a committee of experts to help establish standards and quality control around the testing and remediation industries. The problem with the committee was that nearly half the people made money from testing, so keeping the standards as low as possible was in their interest. The decision was made that 1.5 micrograms would become the new standard.

Things then changed further when Labour came to power. Then Housing Minister Phil Twyford announced that he had appointed the Government's Chief Science Officer, Sir Peter Gluckman, to report on this growing area of concern. Gluckman was asked to review the standards that had been set and to ascertain whether they were fit for purpose. This was the first time a purely scientific approach had been undertaken.

On the 28th of May 2018, Sir Peter Gluckman published his report, which sent shockwaves through our industry.

Gluckman claimed that there was no need to carry out testing and that 15 micrograms should be adopted as the new level. The problem with this was that it was not established into law, and we had insurance companies still referring to the 1.5 micrograms whilst Tribunal adopted the Gluckman report and started making rulings based on the 15 micrograms level. Confusion reigned, and opinion was split. In 2019 the Government passed a law that set the standard for levels of contamination. This was meant to have been set by the end of January 2021.

Now, nearly seven years from this case and almost two years from when the standards were meant to be set, we may finally be coming to the end of this whole sorry debacle. Nearly three years overdue, the Government is finally going to set legal standards that everyone can work towards.

It looks as if the Gluckman report will be adapted into law; however, a tenancy will not automatically end unless the property is more than 30 micrograms. If a tenanted property is deemed to be contaminated at levels of between 15 and 30 micrograms, the tenancy will continue, and the landlord must get levels down to under 15 micrograms. Importantly, you only need to test if the council or police say so. Insurance companies will be forced into adopting the new laws meaning the need for testing between tenancies will no longer be required.

Finally, we will see an end to this sorry saga. As Gluckman mentioned in his press conference when he published the report, mould is far more damaging to the health and well-being of tenants, and we have no set standards written into law about that. Hopefully, we can focus our energy on something that will benefit the well-being of our country and set standards for what is acceptable for mould rather than listen to scaremongers who lined their pockets whilst causing misery for landlords and tenants alike.

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