What was Tenancy Tribunal case 4332504 about?

The tribunal order states: The Tribunal orders suppression of the parties’ names and identifying details.

How much money was awarded in case 4332504?

The reconciled net award was $20.44.

What type of tenancy dispute was case 4332504?

The primary dispute was Healthy homes.

Where can I read the official tribunal order for case 4332504?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/8070233-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4332504 about?

The tribunal order states: The Tribunal orders suppression of the parties’ names and identifying details.

How much money was awarded in case 4332504?

The reconciled net award was $20.44.

What type of tenancy dispute was case 4332504?

The primary dispute was Healthy homes.

Where can I read the official tribunal order for case 4332504?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/8070233-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4332504 — Healthy homes

Order

The Tribunal orders suppression of the parties’ names and identifying details.
The rent for the premises is fixed at $740.00 per week, effective from 11 March 2022.
[The landlord/s] must pay [The tenant/s] $20.44 being the filing fee on this application.

Reasons

Both parties attended the hearing which was held by teleconference. The Issues
As noted in the Order dated 12 July 2022, the only issue for determination by the Tribunal is whether, in terms of s.25 RTA, “...the rent payable or to become payable for the tenancy exceeds the market rent by a substantial amount..” and whether the Tribunal should, “...make an order reducing the rent to an amount, to be specified in the order, that is in line with the market rent.”
The tenant has been paying rent of $740.00 per week since 2019. On 5 January 2022, the landlord issued the tenant with a notice of rent increase increasing the rent to $790.00 per week effective 11 March 2022. The tenant brought this application under s.25 RTA.
The Tribunal is required to assess what a market rent for the premises is and whether the rent claimed by the landlord exceeds that by a substantial amount.
In terms of s.25 (3), “....the market rent for any tenancy shall be the rent that, without regard to the personal circumstances of the landlord or the tenant, a willing landlord might reasonably expect to receive and a willing tenant might reasonably expect to pay for the tenancy, taking into consideration the general level of rents (other than income-related rents within the meaning of section 2(1) of the Public and Community Housing Management Act 1992) for comparable tenancies of comparable premises in the locality or in similar localities and such other matters as the Tribunal considers relevant...” The Evidence
Each of the parties has helpfully provided comprehensive lists of rents asked or payable for premises they say are comparable.
For the hearing on 12 July 2022 the tenant filed a market rent assessment for the premises provided by [Valuer 1], a registered valuer from [Valuer 1].
That valuation, which is dated 17 June 2022, assesses the market rent for the premises at $700.00 per week.
The hearing on 12 July 2022 was adjourned to allow the landlord to file equivalent evidence. The landlord filed a market rent assessment for the premises provided by [Valuer 2], a registered valuer from [Valuer 2]
That valuation, which is dated 25 July 2022, assesses the market rent for the premises at $795.00 per week.
The difference is substantial.
Data available through Tenancy Services from bonds held shows that for the 6- month time period covered by that data, there are 528 active bonds held for 3 bedroom houses in [Suburb]. The average of the lower quartile “band” is $650.00 per week, for the median quartile it is $710.00 per week and for the upper quartile it is $793.00 per week.
A Healthy Homes assessment completed on 8 August 2022 shows that the premises do not meet draft stopping standards as, “Louver windows need replacing (6 louver windows) + gaps around window bedroom 2.”
Both valuers’ reports note replacement of those louvre windows as something that is required Assessment of the Evidence
Both [Valuer 1] and [Valuer 2] gave evidence. As his report was filed later, [Valuer 2] had been given a copy of [Valuer 1’s] report. [Valuer 1] has not seen Valuer 2’s] report.
The methodologies followed by each of the valuers was similar. They had accessed data sources and consulted with local property managers to locate comparable rentals. They had undertaken an inspection of the premises and had made drive by/ walk by visits to the comparison properties but for the comparison properties had otherwise relied on listing information and photographs and on information from the property managers. [Valuer 2’s] report discloses that he had also been given information by the landlord but confirms that information provided by the landlord was checked and verified by him.
Each of the valuers used a series of properties to provide comparative market rent information. No comparative properties were cited by both valuers.
The parties had the opportunity to put to the valuers, questions about the suitability of the properties they had chosen to provide comparative data. [Valuer 1] and [Valuer 2] each maintained the view that their assessment of market rent for these premises reflected data from suitably comparable properties.
The Tribunal is then left to make sense of significantly divergent expert evidence. It goes without saying that I am not a valuation expert so have no basis to prefer one valuer’s evidence over the other without a sound evidential basis.
I must take into account as well that this is the tenant’s application so it is for her to prove on the balance of probabilities that that the rent demanded by the landlord exceeds the market rent Findings
The evidence provided by the valuers indicated that each gave a slightly different weighting to factors impacting on market rent assessment. They both agreed that location is important as are the number of bedrooms. [Valuer 2] put some emphasis on the nature of the underlying title ie. whether the property was fee simple or cross-lease and on the area of the property, for family use. [Valuer 1] spoke about the number of rooms as perhaps having more value than floor area per se.
[Valuer 2’s] evidence was that the data about comparable market rents indicated rents that those premises could achieve when “ready for market”. He did not give significant weighting to the current condition of the premises. He had not noted a significant draught during his visit on a calm day and thought curtains might address the issue. He noted that the louvre windows need replacing but thought the costs required to bring these premises to market would not be major.
[Valuer 1’s] evidence showed a more significant weighting to features of the premises as they currently are. In particular he highlighted the “average” interior, particularly the bathroom, described in the report as “average/ functional” and the louvre windows which he said let in considerable draft when he was there for the inspection on a windy day.
Both valuers’ evidence was they would consider the premises in the median band of 3 bedroom homes in the area, being generally sound and tidy with an average interior presentation and condition.
Both valuers agree that market rents have been in decline recently.
There is a limit to which weight can be given to the tenancy services data in establishing market rent for a specific property. It is generalised data not specific to these premises. Nevertheless, the data is accurate to the extent that it captures a large number of actual rather than expected rents. One would expect to find evidence to show why this property should command a rent in line with the upper quartile of rents in the area, when both valuers agree it is a “median” property.
[Valuer 2’s] valuation cites a property at [comparable address] as a comparable but inferior property being rented for $740.00 per week. [The landlord/s representative] agrees that property is comparable but inferior. His evidence is that it was rented in March 2022 for $740.00 after, like these premises, having been rented for $740.00 for the 2 years previously. That may be an indication that market rent for these premises, like [comparable address] has not increased.
In considering what a willing landlord might reasonably expect to receive I take into account the rent for that nearby property, where the landlord has entered into a new tenancy at the same rent as had been charged for the 2 previous years.
Based on the evidence about the nature of the premises and its location, I am not persuaded that the tenant has proved that the rent of $790.00 per week demanded by the landlord would exceed a market rent for the premises by a substantial amount, if the premises were at market standard in terms of [Valuer 2’s] valuation approach.
I am however persuaded that because of the particular characteristics of these premises, to which [Valuer 1] gave greater weight in his assessment, a current market rent for these premises is significantly less than it would be if the premises were at that market standard.
The landlord is correct that the premises are not yet required to comply with healthy homes standards as this tenancy was in place at 20 July 2021 1 .
However, I am required to consider what a willing tenant might reasonably expect to pay for the tenancy. In my view, an informed tenant (and any tenant must be informed about Healthy Homes compliance), would take into account that: a. the premises have an “average” interior; b. the bathroom in particular is “functional”; and c. importantly, that the premises do not comply with healthy homes draught stopping standards, are susceptible to draughts and will require that the louvre windows be replaced.
When those considerations are taken into account my finding is that in their current state, a rent of $790.00 per week for the premises would exceed the market rent by a substantial amount.
In terms of s.25(1) fix the rent at $740.00 per week which is the current rent and is a rent at the mid-point of that assessed by the registered valuers.
Because the tenant has succeeded with her application I must reimburse the filing fee.

Tenancy Tribunal case 4332504 — Healthy homes

At a glance

Tenancy Tribunal case 4332504 — Healthy homes

At a glance

Award balance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions