What was Tenancy Tribunal case 4472666 about?

The tribunal order states: Property Steward Limited must pay [The tenant/s] $7,120.44 immediately,

How much money was awarded in case 4472666?

Compensation: $2,100.00 awarded to tenant; Property Damage: $5,000.00 awarded to tenant; Filing Fee: $20.44 awarded to tenant

What type of tenancy dispute was case 4472666?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4472666?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9569905-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4472666 about?

The tribunal order states: Property Steward Limited must pay [The tenant/s] $7,120.44 immediately,

How much money was awarded in case 4472666?

Compensation: $2,100.00 awarded to tenant; Property Damage: $5,000.00 awarded to tenant; Filing Fee: $20.44 awarded to tenant

What type of tenancy dispute was case 4472666?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4472666?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9569905-Tribunal_Order_Redacted.pdf.

30 Marne Street, Andersons Bay, Dunedin 9013 Tenancy Tribunal Case 4472666 — Exemplary damages

Claims and awards in Tenancy Tribunal application 4472666 — net $7,120.44 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages	$5,000.00	Exemplary damages
Compensation	$2,100.00	Compensation
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$7,120.44
Total payable by Landlord to Tenant	$7,120.44

Claims and awards in Tenancy Tribunal application 4472666 — net $7,120.44 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages	$5,000.00	Exemplary damages
Compensation	$2,100.00	Compensation
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$7,120.44
Total payable by Landlord to Tenant	$7,120.44

Order

Property Steward Limited must pay [The tenant/s] $7,120.44 immediately, calculated as shown in table below:

Reasons

Both parties attended both hearings.
[The tenant/s] claims that the landlord has breached their obligations by not complying with the healthy homes standards because moisture entered her bedroom from underneath the carpet.
The tenant wanted a refund of $2,100.00 of the $4,350.00 rent she had paid and exemplary damages.
The tenant was one of four tenants in the premises and occupied the downstairs basement room of the property from 18/6/2022 to 31/12/2022.
The other tenants who occupied the three upstairs rooms did not wish to participate in the application.
During the initial hearing on 14/9/2023 the Tribunal became aware, and the landlord confirmed, that the basement room occupied by the tenant did not have the consent of the Local Authority to be used as a bedroom.
As a result, the Tribunal needed to consider the issue of whether the premises or any part were “unlawful residential premises”, and the matter was adjourned to enable either party to provide further evidence.
At the rescheduled hearing two of the landlord’s employees appeared, and provided the same evidence as previously submitted by the landlord, except a property inspection report dated 1/1/2023, after the tenancy had ended.

Did the landlord comply with their obligations?

The tenant claims that the landlord has breached the landlord’s obligations under section 45(1)(bb) of the Residential Tenancies Act 1986 (RTA), which requires compliance with the Residential Tenancies (Healthy Homes Standards) Regulations 2019 (HHS). The tenant considers that the landlord has failed to comply with the HHS moisture and drainage standards.
Compliance dates for the HHS vary depending on the tenancy: a. All private rentals must comply within 120 days of any new or renewed tenancy after 1 July 2021, with all private rentals complying by 1 July 2025. b. All boarding houses must comply by 1 July 2021. c. All houses rented by Kāinga Ora and registered Community Housing Providers must comply by 1 July 2024.
The moisture ingress and drainage standard requires that buildings comprising residential tenancies must have efficient systems to drain storm water, surface water and ground water, and that includes gutters, downpipes and drains. The Standard requires a ground moisture barrier when there is an enclosed subfloor space.
The HHS does provide exemptions in specific circumstances.
In addition, under section 45, a landlord must, among other matters, provide and maintain the premises in a reasonable state of repair
Breaching any of these obligations is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A) and Schedule 1A Residential Tenancies Act 1986.
The tenant submitted that she first emailed the landlord about a leak under her carpets on 13/7/2022 which became progressively worse and led to mushrooms growing through the carpet in August.
After she removed the mushroom growth, the tenant suggested that the carpet was still wet but not as much for the next month.
However, the mushrooms appeared again, and she continued to remove mushroom growth until the end of her tenancy in December.
In support of her claim the tenant provided photographs of the damp carpet and mushroom growth and the email correspondence with the landlord.
The tenant was unhappy that the landlord had not attempted to dry out the carpet or provide a dehumidifier and that the carpet was only replaced after she left the premises.
In response, the landlord blamed the damp carpet on a leak from the hot water cylinder which was eventually replaced and a rain event in December.
The landlord provided a Healthy Homes Standards Compliance report from March 2020 and submitted that the issues highlighted by the report had been rectified and the premises complied.
Further the landlord confirmed that a moisture barrier had been installed, albeit not under the basement bedroom occupied by the tenant.
I am not persuaded by the evidence of the landlord that the reason for the dampness was the hot water cylinder because the problem continued well after the cylinder was replaced.
In addition, the landlord’s insurer decided that the hot water cylinder had not caused damage to the carpet but that the carpet was mouldy due to water entering the basement area then seeping through to the study and bedroom area during heavy rain.
I find the evidence supports that the dampness in the bedroom area was a breach of the moisture and drainage standard.
The Healthy Homes Compliance Report failed the moisture ingress standard due to the guttering needing cleaning.
While the landlord suggested all issues from identified by the report had been rectified, no objective evidence was provided to support this claim.
Combined with the suggestion from the insurance assessor that water entering the basement then seeping into the bedroom after heavy rain caused gradual damage to the carpet, I consider a presumption can be made that blocked guttering caused or at least contributed to the dampness issues.
Moreover, the failure of the landlord to do anything about drying out the carpet in a timely manner is a breach of the obligation to maintain the premises.
I find the landlord has committed unlawful acts.

Was the property an unlawful residential tenancy?

The bedroom and study occupied by the tenant was originally part of the basement and at some point was converted to a bedroom and study without the appropriate consent.
There is extensive jurisprudence as to what constitutes an unlawful residential premise.
Section 77(2)(ac) sets out that the Tribunal has jurisdiction to determine whether any premises are, or were at any material time, residential tenancies as defined in section 78A(2)
Under section 78A(2) “unlawful residential premises” are defined as residential premises that are used for occupation for a person for 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.
Residential premises are defined in section 2 as any premises used or intended for occupation by any person as a place of residence, whether or not that occupation or intended occupation for residential purposes is or would be unlawful.
The definition of premises includes, among other things, any part of any premises.
When considering unlawful residential premises, the Tribunal must look at the entirety of the premises that is the subject of the tenancy agreement, not just part of the premises.
In such cases where the Local Authority has advised that the whole premises, not just part, had not been consented for residential purposes the Tribunal has found the premises were unlawful residential tenancies. These premises, such as converted garages or sleepouts were self-contained and exclusively the subject of a tenancy agreement and were unlawful residential premises.
This is not the case here where the tenant is one of four renting a lawful residential premise where some unlawful work has been undertaken to convert part of the basement to a bedroom and studio.
Put another way the unlawful conversion of part of the basement into a bedroom and study does not make the whole premise an unlawful residential premise, but rather a lawful residential premise, with an unlawful conversion.
The public policy behind section 78A was to discourage landlords from renting out properties that were unconsented or unlawful and had therefore never been subject to meeting the legal requirements to ensure their safe and healthy occupation by tenants.
It was not aimed at a regulatory failure of a premises that is otherwise a lawful residential premise.
However, this does not mean a landlord can escape liability for renting an unconsented bedroom and study. Rather this failure is covered by sections 45 and 36. Should compensation be awarded for breaches of the landlord’s obligations and loss of amenity?
The landlord is in breach of section 45(1)(c) because they have not complied with all enactments that apply to the premises, the Building Act 2004 in particular.
Section 36 requires a landlord to take all reasonable steps to ensure, at the commencement of the tenancy, there is no legal impediment to the occupation of the premises for residential purposes.
The evidence supports that the landlord knew there was no consent for the use of the downstairs bedroom as a fourth bedroom.
This is supported by the submissions that when the landlord took over management of the premises in 2019 the premises were advertised as a three bedroom house.
Further the evidence supports that the landlord knew the tenant was occupying the downstairs bedroom, as was a previous tenant, but took no steps to remedy the situation or apply for retrospective consent.
The consent process is not just a box ticking exercise but involves issues such as fire protection, fire rating, ventilation, and general compliance with the building code.
I consider compensation should be awarded to reflect the fact that part of the premises was not legally able to be rented as residential premises.
For the avoidance of doubt there was a legal impediment to the occupation of the basement bedroom and study and a health and safety issue because of the lack of consent.
The tenant’s evidence was that she paid $4,350.00 rent during her tenancy and sought a refund of $2,100.00 as compensation.
In the circumstances I consider this a reasonable amount of compensation to award.
According to my calculations the tenancy lasted for 28 weeks. During this period the bedroom was damp for at least 21 weeks.
The photographs of the mushroom growth provided by the tenant were significant and supported that the infestation was of long standing.

Should exemplary damages be awarded?

As I have found that the landlord committed unlawful acts by failing to comply with the moisture ingress and drainage standard and not taking any steps to dry out the carpet, I need to consider the issue of exemplary damages.
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) Residential Tenancies Act 1986.
Exemplary damages under the Act are different from compensation. The provision of such damages is designed to punish and deter; Attorney-General (Commissioner of Crown Lands) v Little Bo Peep Sheep Company Ltd (HC CIV 2010-412-134).
In making an award of exemplary damages I need to consider the four matters set out in section 109(3).
First, I need to consider the intent of the landlord.
For intent there must be actual knowledge of the breach. In a recent case the District Court confirmed that intentional means “in the sense of deliberately and in full knowledge” TMT New Zealand Limited TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182.
I consider an inference can be drawn from the evidence that the landlord intentionally failed to comply with the healthy home standard for moisture ingress and drainage or maintain the premises in a reasonable state of repair.
The landlord was advised by the tenant on numerous occasions about the dampness issues with the carpet and took some steps to rectify the problem by having the hot water cylinder fixed then replaced.
However, at no stage did the landlord dry out the carpet and only cleaned it near the end of the tenancy.
There is no evidence to show that the landlord cleaned out the guttering or considered the dampness issues were anything other than from the leak in the hot water cylinder.
No property inspection was undertaken between March 2022 and 1/1/2023.
Having considered the factors set out in section 109(3), particularly the effect on the tenant and the public interest I consider it just and fair to award exemplary damages for both breaches.
As I consider the breaches serious, I have set these at the higher end of the scale.
In doing so I have taken into account the comments of His Honour Judge Tuohy in Property Steward Limited v Tongshan Liu [2023] NZDC 17914 where he said: [14] I think it is fortunate that the order of the Tribunal was $3,000 rather than the maximum because this was carried out for purely financial reasons and, indeed, the landlord may see it as being worth the breach of the Act. The landlord may well have made more by breaching the Act than by suffering the award of exemplary damages. I think in the circumstances the landlord is fortunate that only $3,000 was ordered in that respect and not the higher maximum.
The only mitigating factors against awarding the maximum I consider were the steps taken by the landlord in repairing then replacing the hot water cylinder.
As [The applicant/s] has wholly succeeded with the claim I must award the filing fee.
Suppression is granted because the tenant was successful with her claim.

Tenancy Tribunal case 4472666 — Exemplary damages at 30 Marne Street, Andersons Bay, Dunedin 9013

At a glance

Tenancy Tribunal case 4472666 — Exemplary damages at 30 Marne Street, Andersons Bay, Dunedin 9013

At a glance

Award balance

Claims & awards

Order

Reasons

Did the landlord comply with their obligations?

Was the property an unlawful residential tenancy?

Should exemplary damages be awarded?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Did the landlord comply with their obligations?

Was the property an unlawful residential tenancy?

Should exemplary damages be awarded?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions