What was Tenancy Tribunal case 4421620 about?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 4421620?

Compensation: Rent abatement unlawfu…: $3,420.00 awarded to landlord; Property Damage: $200.00 awarded to landlord; Filing Fee: $20.44 awarded to landlord

What type of tenancy dispute was case 4421620?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4421620?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/8500011-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4421620 about?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 4421620?

Compensation: Rent abatement unlawfu…: $3,420.00 awarded to landlord; Property Damage: $200.00 awarded to landlord; Filing Fee: $20.44 awarded to landlord

What type of tenancy dispute was case 4421620?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4421620?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/8500011-Tribunal_Order_Redacted.pdf.

Unit/Flat B, 5 Ascot Avenue, Kamo, Whangarei 0112 Tenancy Tribunal Case 4421620 — Exemplary damages

Claims and awards in Tenancy Tribunal application 4421620 — net $3,640.44 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Compensation: Rent abatement unlawful premises	$3,420.00	Rent abatement unlawful premises
Exemplary damages: failure to lodge bond	$200.00	failure to lodge bond
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$3,640.44
Total payable by Tenant to Landlord	$3,640.44

Claims and awards in Tenancy Tribunal application 4421620 — net $3,640.44 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Compensation: Rent abatement unlawful premises	$3,420.00	Rent abatement unlawful premises
Exemplary damages: failure to lodge bond	$200.00	failure to lodge bond
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$3,640.44
Total payable by Tenant to Landlord	$3,640.44

Order

An application for suppression has been made in this case, and the Tribunal orders suppression of the Tenant name and identifying details.
By declaration, the apartment known as 5B Ascot Avenue, Kamo being the lower floor of the building, is currently an unlawful residential premise.
Marama Smith must pay [The tenant/s] $3,640.00 immediately in accordance with the following table:

Reasons

Both parties attended the hearing.
[The tenant/s] applied for compensation and/or exemplary damages and work orders for various breaches of the Residential Tenancies Act 1986 (RTA).
In considering the claims, the “standard of proof” or the level or evidence required is “on the balance of probabilities.” In other words, [The tenant/s] must establish with evidence that his claim is “more likely than not.” I consider each of the claims bearing in mind the standard of proof required. Whilst I may not have referred to all the evidence presented at the hearing, the parties can be assured that it has all been considered. Background
This tenancy commenced on 20 May 2022 and was for a fixed term until 3 August 2022. The tenancy agreement mistakenly noted the end date of 3 May, but it was agreed at the hearing that it was intended to be 3 August. It was also agreed at the hearing that as the tenancy had continued past 3 August, it has now become a periodic tenancy.
The tenancy agreement between the parties is the standard form agreement provided by Tenancy Services and both parties have signed it.
5 Ascot Avenue is one house. Ms Smith lives in the upstairs and [The tenant/s] lives downstairs. There is a locked door between the two and they have separate entrances. The space was advertised for rent as a downstairs apartment and I shall refer to it as ‘the apartment’ in this decision.
On 15 October [The tenant/s] served a 14-day Notice to Remedy (the Notice) on Ms Smith to attend to the following: a. The plumbing system for the shower, washing machine and toilet. b. The shower as the seal and shower head were malfunctioning and there is a crack in the floor. c. The extractor fan in the bathroom. d. The light fixture and switch in the bathroom. e. Mould contamination in the shower, toilet and outside doorway.
On the same day he applied to the Tribunal for relief.
Work orders were made by consent relating to these issues of maintenance at the hearing on 20 December 2022. Jurisdiction
The first issue to consider is jurisdiction as Ms Smith raised that she had been advised by her lawyer that the RTA did not apply to this situation as [The tenant/s] was her boarder.
The Tribunal’s general jurisdiction, under s77(1) RTA is to: “...determine in accordance with this Act any dispute that— (a) exists between a landlord and a tenant or between a landlord and the guarantor of a tenant; and (b) relates to any tenancy to which this Act applies or to which this Act did apply at any material time.”
Section 2 RTA provides that a “landlord” and “tenant” are respectively grantor and grantee of a tenancy. “...tenancy, in relation to any residential premises, means the right to occupy the premises (whether exclusively or otherwise) in consideration for rent; and includes any tenancy of residential premises implied or created by any enactment...” rent, means any money, goods, services, or other valuable consideration in the nature of rent to be paid or supplied under a tenancy agreement by the tenant; but does not include any sum of money payable or paid by way of bond”
Section 5 of the RTA details exclusions to the RTA. S5(n) specifically excludes arrangements where the premises are also being used for residence of the landlord. I therefore must determine whether [The tenant/s]’s residence was one and the same as Ms Smiths.
“Premises” is defined in section 2 of the RTA as including any part of any premises. This means that you can have a building that is made up of several different premises or “household units” as described in the Building Act 2004 (the Building Act). As the apartment is incorporated in a building (i.e. Ms Smith’s dwelling), the requirements of the Building Act apply to the apartment.
A household unit is defined in section of 7 of the Building Act as a building: “or part of a building that is used or intended to be used only or mainly for residential purposes; and is occupied, or intended to be occupied, exclusively as the home or residence of not more than 1 household”
Justice Walker in the High Court 1 determined that: a. the natural and ordinary meaning of “premises” contemplates that there could be more than one “premises” within a larger premises; b. residential premises can include part of any premises used or intended for occupation as a place of residence; c. the RTA supports a generous approach to jurisdiction for the Tribunal and conversely a strict approach to exceptions; d. the tenants in that case did not have a right to occupy the areas used by the landlord, and there were no shared or common areas that would normally characterise a flat share. There was also no ability for the parties to enter the other parties dwelling, other than with consent. 1 Clare Dina Harding v Monica Schellevis & Ors [2021] NZHC 1265
Justice Walker concluded: “In my view, the decisive factor in this case must be the self-contained character of the granny flat, its exclusive use by the respondent occupiers and the exclusive use of the rest of the dwelling by the appellant and her family. There were no communal living or shared spaces but two separate and distinct household units within the dwelling. In these circumstances, the term “premises” cannot be interpreted as referring to the property in its entirety. The relevant premises is instead the functionally independent granny flat. That was not principally a place of residence of the appellant. It was solely occupied by the respondent. Section 5(1)(n) of the Act does not apply.”
Ms Smith agrees that the apartment is for [The tenant/s]’s exclusive occupation as her space is for her. She is clear that they both occupied their own areas and had no unfettered access to the other’s. Her intention is that the apartment is a separate flat and it has been furnished accordingly. It has a kitchen, bathroom, separate toilet, bedroom and living area and its own access.
I also note the tenancy agreement used is that for a separate residential premise and is written by Tenancy Services in accordance with the RTA. Finally, the way the tenancy was run was consistent with a residential tenancy rather than a boarding situation.
Given the above, I am satisfied here that [The tenant/s] occupied the apartment as “a self-contained separate household unit”, therefore this was not a situation where he and Ms Smith were living in the same premise. Accordingly, s5(n) of the RTA does not apply and this is a residential tenancy over which the Tribunal has jurisdiction.

Is the premises an unlawful residential premises?

As noted at the hearing concerns arose for me as to the lawfulness of the premise. The factors that alerted me to this potential issue were the following: a. The tenancy agreement refers to 5B Ascot Avenue however there does not appear to be a 5B Ascot Avenue on Council records. b. Council records state that 5 Ascot Avenue is single residential unit. c. There is only one letterbox for this property which has the number 5 on it. [The tenant/s] says that both his and Ms Smith’s mail is delivered to this letterbox. d. The photos of the premise show stairs coming down into the middle of [The tenant/s]’s hallway with a child gate at the bottom.
Section 78A of the RTA refers to unlawful premises, and allows the Tribunal to make orders from its own initiative and states: For the purposes of this Act, unlawful residential premises means residential premises that are used for occupation for a person as a place of residence but— (a) that cannot lawfully be occupied for residential purposes by that person (whether generally or whether for the particular residential purposes for which that person is granted occupation); and (b) where the landlord’s failure to comply with the landlord’s obligations under section 36 or 45(1)(c), ..., has caused the occupation by that person to be unlawful or has contributed to that unlawful occupation.
Section 36 of the RTA states that: The landlord shall take all reasonable steps to ensure that, at the commencement of the tenancy, there is no legal impediment to the occupation of the premises for residential purposes.
Section 45(1)(c) states that: (1) The landlord shall – ..... (c) Comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises;
Here, the particular residential purposes as referred to above is the occupation of the apartment as a second household unit, separate to the top part of the building (Ms Smith’s area). While the premises can be occupied, generally, for residential purposes, given the building as a whole has Council consent for residential use, the issue arises when looking at the division of the premises into two separate household units
Section 45(1)(c) of the RTA, in this case, requires consideration of whether the landlord has complied with the provisions of the Building Act 2004 (the Building Act), in particular, sections 40, 114 and 115 of the Building Act. Those sections refer to separate household units having separate consents for their use, and any change in use must be notified to the Council.
Ms Smith says she is unaware whether she was lawfully allowed to rent out the apartment, she just did. She has never applied for consent to have the apartment distinctly separated from her space. Ms Smith says she intended to rent out the apartment to help her own people and is unconvinced that the RTA is applicable to her.
Having considered the evidence I am satisfied that it is more likely than not that the use of the building has changed from intended and actual use of one household unit, to two. This change does not appear to have been consented to by Council and therefore is unlikely to be compliant with the Building Code.
Accordingly, I consider that Ms Smith has not complied with the Building Act, and consequently has failed to comply with section 45(1)(c) of the RTA. The failure to obtain consent to divide the premises into two household units, makes Ms Smith’s renting it out to [The tenant/s] as a separate household unit, unlawful. Accordingly, the premises is currently an unlawful residential premises
Returning then, to section 78A of the RTA. Section 78A provides that where the Tribunal declares the residential premises to be unlawful, the Tribunal may order the return of all rent paid by the tenant, although it may deduct an amount from that sum if, in the special circumstances of the case, it would be fair to do so. The Tribunal may also make a work order requiring the landlord to remove any impediment to lawful occupation or to comply with any building, health or safety requirements.
Section 78A of the RTA was introduced in 2017 to hold landlords to account for choosing to expose tenants to the health and safety risks of renting out unconsented or non-compliant properties, to disincentivise the practice and to ensure landlords don’t profit from the practice. I must take these public policy issues into account when I consider any award under the section.
The Tribunal has clear discretion on the amount awarded to tenants under s78A, which is an indication of Parliament’s intent to distinguish between premises that were unlawful on the basis of a regulatory technicality, but which were otherwise safe, healthy homes, and those properties which created risks to health and safety. Here I consider it appropriate to take into account that the premises is consented for residential purposes and appears to be compliant with the RTA in all other material ways, other than the maintenance issues discussed below. [The tenant/s] has had the benefit of residing there for some time to date and if the maintenance issues were resolved he said he would be happy there.
[The tenant/s]’s claim was for a failure to maintain the premises relating to a leak in the toilet, insufficient smoke alarms, a crack in the shower, issues with the bathroom extractor fan and light and the sink tap. Under section 45(1)(a) - (ca) RTA, landlords have an obligation to provide and maintain certain standards and to comply with applicable requirements. The evidence on these issues was largely uncontested, and Ms Smith has readily agreed to work orders to remedy those concerns. She has apologised for the delays and explains that she thought the issues had been dealt with.
I consider it practical, rather than to make a separate order for compensation for a failure to maintain the property, to take these matters into account when considering the extent to which a full rent rebate to [The tenant/s] pursuant to s78A(4)(a)(i) should be reduced pursuant to s78A(4)(a)(ii).
Accordingly, I direct that Ms Smith pay [The tenant/s] $3,420 which is equivalent to a 40% reduction of the rent he has paid to date taking into account [The tenant/s]’s current arrears of $1,200.
To be clear this is compensation for the following: i. Pursuant to s78A(4) by way of a rent refund given the premise is unlawful taking into account to the special circumstances discussed above. ii. Pursuant to s45(1)(b) of the RTA for Ms Smith’s failure to maintain the premise with respect to the toilet leak and resulting mould, shower crack, malfunctioning extractor fan and bathroom light. iii. Pursuant to s45(1)(ba) of the RTA for Ms Smith’s failure to ensure the premise has the required smoke alarms
In coming to this amount, I have considered that Ms Smith was apologetic with respect to the maintenance delays and appears to have genuinely been attempting to attend to the issues for [The tenant/s]. She clearly wasn’t aware that some issues were ongoing and has readily agreed to resolve them going forward. I accept her evidence that she was unaware that she required consent to rent out the downstairs and was trying to do the right thing by renting to [The tenant/s] when he was in need.
I have also taken into account that [The tenant/s] has lived with unsatisfactory conditions including water on the toilet floor for a number of months. He has also had to actively pursue issues of maintenance with Ms Smith for a long time and has had maintenance issues of some nature for the duration of the tenancy.
As [The tenant/s] has advised that he intends to vacate the premise as soon as he has the funds to enable him to do so, I make no work orders regarding the unlawfulness. I do note that if Ms Smith chooses to continue to rent the premise in the unlawful state it currently is in, should she find herself before the Tribunal again in the future on the same issue, it is likely that she will receive a more punitive approach. Bond
A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received. See section 19(1) RTA. Ms Smith accepts that she has not done so as she does not agree with the process.
Accordingly, Ms Smith has breached s19 of the RTA.
Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. See section 19(2) and Schedule 1A RTA.
Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest. See section 109(3) RTA.
Ms Smith was aware the bond needed to be lodged but chose not to comply. Therefore, the intentional element of s109 is met. In considering an award of exemplary damages I take into account that bond money belongs to a tenant and it is of significant interest to both the tenant and the public that the money is held securely with the Bond Centre during the tenancy and that landlords comply with their obligations under the RTA. In saying that, the failure has had little impact on [The tenant/s] other than to frustrate him and Ms Smith says she has the money in a separate account available at any time. Her intention she says was to make the process easy at the end for them both and to avoid the bureaucratical difficulties in having to apply for a refund.
Ms Smith argues that [The tenant/s] agreed with her process in not lodging the bond. However, s11 of the RTA prohibits landlords from contracting with tenants to not meet their obligations under the RTA. Therefore, even if [The tenant/s] had agreed, Ms Smith was not entitled to evade lodgement of the bond with the Bond Centre.
Having taken into account the above, I consider that an award of $200 exemplary damages is just in the circumstances.
Ms Smith must file the bond with the Bond Centre or return it to the tenant immediately. Filing fee
As [The tenant/s] was largely successful with his application, pursuant to s102(4) of the RTA I must award reimbursement of the filing fee. Suppression
Section 95A of the RTA requires the Tribunal to supress a party’s name or identifying details if that party was “wholly or substantially” successful in their application or defence. Both parties have sought suppression however as [The tenant/s] was the only one successful, I can only direct that his details are suppressed.

Tenancy Tribunal case 4421620 — Exemplary damages at Unit/Flat B, 5 Ascot Avenue, Kamo, Whangarei 0112

At a glance

Tenancy Tribunal case 4421620 — Exemplary damages at Unit/Flat B, 5 Ascot Avenue, Kamo, Whangarei 0112

At a glance

Award balance

Claims & awards

Order

Reasons

Is the premises an unlawful residential premises?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Is the premises an unlawful residential premises?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions