Published tribunal order
Tenancy Tribunal case 4334851 — Property damage at 36 Philomel Crescent, Bayswater, Auckland 0622
Decided 27 Oct 2023 · Published 27 Oct 2023 · Application 4334851
- Property damage
- Exemplary damages
- Harassment
Party names are redacted in the official published order.
Order
- The Tribunal orders suppression of the tenants’ names and identifying details.
Reasons
The Parties
- Both parties attended the hearing. The tenants were represented by [The tenant/s].
- The agreement identifies the landlord as Iron Bridge Property Management Auckland Ltd as agent for the owner who is named as Clio Best.
- The issues are between the tenants and the owner. The owner’s management contract with Iron Bridge Property Management Auckland Ltd has ended. It is appropriate that the parties to these proceedings be the tenants and the owner. Background
- The tenancy agreement provides for a fixed term tenancy from 20 January 2021 to 19 January 2022.
- Well before the end of the tenancy, the tenants indicated a wish to have the tenancy extended by a further fixed term.
- On 28 October 2021 the property manager emailed the tenants: “Further to our recent discussions on the expiry of your fixed term on 19/01/2022 your tenancy will continue as a periodic tenancy. The weekly rent will remain the same rate at $690.00 per week however we may review/ increase this every 12 months (from the last increase).” The email then went on to spell out the notice periods that would apply to ending the periodic tenancy.
- There was later a falling out between the owner and the property manager. The owner decided that she would not extend the management contract beyond the 1 year fixed term of the tenancy agreement and would therefore need to deal with the tenants directly herself after that.
- On the owner’s instructions the property manager then issued a notice to the tenants on 21 December 2021 stating: “Your fixed term tenancy at 36 Philomel Crescent Bayswater is due to expire on 19/01/2022. Unfortunately, we are unable to offer you an extension to your fixed term tenancy, therefore this letter serves as the required 21 days’ notice to vacate the property by 19/01/ 2022.”
- There were discussions between the tenants and the property manager and also between the tenants and the owner about an extension to the vacate date. The owner directly offered to the tenants the opportunity to stay for a further 2 weeks on signing the bond over to her and agreeing to a final inspection before the end of the tenancy.
- Because of a deterioration in the relationship between the tenants and the owner, the tenants chose not to accept that offer and they moved out on 20 January 2022. The proceedings
- The initial application (4331753) was filed by the property manager on behalf of the owner. It was lodged on 3 March 2022 and claimed compensation for the cost of replacing the mesh on a screen door ($266.80), lawn repairs ($632.50) and re sanding of timber floors ($3,588.00).
- After the management contract came to an end the property manager withdrew that application.
- The tenants then filed an application on 30 March 2022 (4334851) refuting the landlord’s claims and seeking a compensation for a breach of their right quiet enjoyment of the premises and early termination of the tenancy.
- The matter came before me on 20 July 2022. I ordered that the initial application filed by the property manager on behalf of the owner be reopened.
- The owner then filed a fresh application on 28 July 2022 (4357280). In that application the owner claims compensation for the cost of remeshing the screen door and repairing damage to the floors, to the extent of the bond held. The claim for reinstating the lawns is waived.
- At the hearing I heard from [The tenant/s] for the tenants and from Ms Best. The property manager Ms Taylor gave evidence as a witness pursuant to a witness summons issued at the tenants’ request. The claims Owner’s claims
- A landlord must prove that damage to the premises occurred during the tenancy and is more than fair wear and tear. If this is established, to avoid liability, the tenant must prove they did not carelessly or intentionally cause or permit the damage. Tenants are liable for the actions of people at the premises with their permission. See sections 40(2)(a), 41 and 49B RTA.
- Where the damage is caused carelessly, and is covered by the landlord's insurance, the tenant's liability is limited to the lesser of the insurance excess or four weeks' rent (or four weeks' market rent in the case of a tenant paying income-related rent). See section 49B(3)(a) RTA.
- Where the damage is careless and is not covered by the landlord's insurance, the tenant's liability is limited to four weeks' rent (or market rent). See section 49B(3)(b) RTA. Tenants are liable for the cost of repairing damage that is intentional.
- Having heard the parties’ evidence, considered the photographic evidence and heard from the property manager, I am satisfied that at the start of the tenancy the wooden floors were newly sanded and polished. I find that the floor damage was caused during the tenancy.
- The tenants accept that there was one small area in front of the door where the damage was significant but say that the damage to the floors in the rest of the premises was only fair wear and tear to what was a soft surface.
- The photographs, taken from throughout the premises, show significant scratching and marking of the floors which in my view is more significant than would ordinarily be expected from 1 year’s normal wear and tear. That was also the assessment of the property manager who made that view clear to the tenants at the time.
- The tenancy agreement does allow for the tenants to have a dog at the premises. The tenants are nevertheless responsible for any damage caused by their dog.
- I accept their evidence and the evidence of the property manager that the tenants took steps to try and minimise the possibility of the dog causing damage to the floor by putting down rugs and other floor coverings. In those circumstances the damage cannot be said to be intentional.
- Nevertheless, damage has been caused to the floors at the premises which requires repair. I accept the owner’s evidence that although she has not had the repair work done yet, as she has moved back in herself, it will be done soon so the repair cost will be an actual loss to her.
- I also note the quote from the floor sanding contractor which notes, “The dog scratches are throughout all the polished floor areas. Unfortunately, the only way to fix this is to fully resand and start again.”
- The agreement discloses that the landlord has insurance cover with an excess payable of $500.00. The agreement does not disclose that the policy excludes damage caused by pets.
- In terms of s.49B(3)(b) RTA, as the landlord does not have insurance cover for the damage, the tenants’ liability is limited to 4 weeks rent. Even allowing for depreciation, the repair cost exceeds that amount.
- Section 13A(2) requires that, “The landlord must include in the tenancy agreement the following information about insurance of the premises: (a) if the premises are not insured, a statement that they are not insured; and (b) if the premises are insured, a statement—(i) setting out, for each insurance policy that is relevant to the tenant’s liability for destruction of or damage to the premises, the amount of each excess that is relevant (if any) to that liability; and (ii) informing the tenant that a copy of the policy is available to the tenant on request (except that the statement need not inform the tenant of this if the landlord has already provided to the tenant a copy of the policy in accordance with section 45(2B) or 66J(5)).”
- I am concerned that when entering into a tenancy agreement that permitted a pet to be at the premises, the insurance disclosure did not inform the tenants that the landlord did not have insurance cover for pet damage. While the disclosure might strictly have complied with the requirements of s.13A(2), that omission was highly relevant and meant that the tenants were not fully informed about their potential liability for damage, which is the purpose of those disclosure requirements.
- I nevertheless find it proved that the tenants are responsible for unintentional damage caused to the floor by their dog, which is more than fair wear and tear and is not covered by the landlord’s insurance. The tenants are accordingly liable to compensate the landlord to the extent of 4 weeks’ rent.
- I do not find the claim for the damage to the screen door proved. The tenants’ evidence is that the damage was not there when they vacated. The property manager who undertook the final inspection report did not notice any such damage, though cannot be certain that it wasn’t there. The owner herself did not notice it until late February when photographs of the damage provided by the owner, were taken. It is possible the damage was occurred in the intervening period. Tenants’ claims Early Termination
- The agreement was signed on 12 January 2021.
- At the time the agreement was entered into as it was for a fixed term.
- As the RTA applied at the time the agreement was entered into 1 the tenancy would become a periodic tenancy on expiry of the fixed term, unless either party gave contrary notice within the period between 90 days and 21 days before the end of the fixed term.
- The landlord’s position is that she was therefore entitled to give the notice that was given on a 21 December 2021, that the tenancy would not extend beyond the end of the fixed term.
- My view of it is that the prior negotiation had led to the property manager confirming with the tenants that rather than a new fixed term being granted at the end of the initial term, the tenancy would continue as a periodic tenancy after that date. In that context I find that it amounted to an agreement between the parties that from 20 January 2022, they would be parties to a periodic tenancy. It was not just a statement about the provisions of the RTA or an offer that the owner could unilaterally withdraw. The tenants were entitled to rely on it. 1 The position changed from 11 February 2021, see section 41 Residential Tenancies Amendment Act 2020
- As such, that periodic tenancy could only be ended by appropriate notice, which was not given.
- The notice given to the tenants on 21 December, requiring them to vacate by 19 January 2022 was accordingly unlawful.
- Under Section 60AA a landlord must not give a notice to terminate the tenancy knowing they are not entitled to do so. Breaching that obligation is an unlawful act for which exemplary damages may be awarded up to a maximum of $6500.00. See section 60AA and Schedule 1A Residential Tenancies Act 1986.
- On balance, I am not persuaded that the landlord knew she was not entitled to require that the tenancy not continue beyond the end of the fixed term, although she ought to have. I do not find that an unlawful act was committed by the landlord for the purposes of s.60AA.
- Nevertheless, the landlord’s actions were a breach of the RTA and have caused considerable loss to the tenants. I accept the tenants’ evidence that being denied the right of continued occupation it had been agreed they would have, caused them major stress and anxiety by having to take urgent steps to try and find another home at a difficult time of year with minimal notice.
- The tenants are entitled to compensation for the effect of the landlord’s breach which I fix at 4 weeks’ rent. Breach of right to quiet enjoyment
- The tenancy agreement provides that the owner will arrange for a gardener to attend once a week.
- It was the owner’s intention that she undertake that gardening work. I accept the property manager’s evidence that it was made clear to her by the owner that the tenants should not be told that the gardener who would coming to the property for that purpose was in fact the owner.
- In her communications with the tenants arranging to come to the property, the owner referred to herself as Clio the gardener. I find that the owner deliberately took steps to conceal her identity from the tenants.
- While, with the tenants’ agreement, it may be unremarkable for a property owner to undertake garden maintenance at rented premises and regularly visit the property for that purpose, in my view it is not appropriate for the owner to try and mislead the tenants about who was visiting the property and to regularly visit the property ostensibly as the gardener.
- That subterfuge does generate mistrust and anxiety and does amount to an intrusion on to the tenants’ right to quiet enjoyment of the premises. They are entitled to compensation.
- I take into account that after the tenants had discovered, from neighbours, that the person they had been told was the gardener was in fact the owner of the property, it tended to be difficult to for the gardener to find times to visit the property that were suitable to the tenants. The actual number of visits to the property by the owner in her capacity as the gardener was quite limited.
- The tenants also say that the owner visited the property on a number of occasions, without or with very little prior notice to drop off or collect items of her property.
- The landlord is correct that the notice requirements of s.48 apply to a landlord’s entry into the dwelling, not onto the grounds of the property. Nevertheless, if a landlord does enter onto the property, as they entitled to, they must still do so in a way that does not breach the tenants’ right to quiet enjoyment of the premises.
- There is evidence too of the owner having arranged for a methamphetamine test inspector to visit and test the premises, without the required notice. The owner was present in the car to give access in the tenants’ absence. In fact, the tenants were home (because they say they had so lost trust in the owner that they would not leave the premises unoccupied) and agreed to the test being carried out, provided the owner did not herself enter.
- Having heard from the parties and viewed the communication evidence, I am satisfied that the pressure put by the owner on the tenants to allow her access to the premises for her own purposes, her having entered onto the property, again for her own purposes in circumstances where she at least ought to have been aware that the tenants were not comfortable with her doing so, also breached the tenants’ right to quiet enjoyment of the premises.
- As noted, the tenants’ evidence is that they became so concerned about the landlords’ insistence on accessing the premises that they rearranged work roisters to ensure one of them would always be home.
- I do not however find the landlord’s actions amounted to the unlawful act of harassment.
- As compensation for the landlord’s breach of the tenants’ right to quiet enjoinment of the premises I award compensation equal to 3 weeks’ rent.
- No order is made with regard to the filing fee.