Published tribunal order
Tenancy Tribunal case 4566549 — Healthy homes at Unit/Flat 2, 38 gulf view road, Murrays Bay, Northshore
Decided 15 Sept 2023 · Published 15 Sept 2023 · Application 4566549
- Healthy homes
- Property damage
Party names are redacted in the official published order.
Order
- An application for suppression has been made in this case, and the Tribunal orders suppression of the Tenant’s name and identifying details.
- Meisheng Zhu must pay [The tenant/s] $6,060.44 immediately, calculated as shown in the table below:
- The Bond Centre is to pay the bond of $3,316.00 ([Bond number suppressed]) to [The tenant/s] immediately.
Reasons
- Both parties attended the hearing. DescriptionLandlordTenant Compensation: lock replacement$160.00 Compensation: Breaches s45/loss of amenity $3,200.00 Exemplary damages: Fails to maintain/HHS $3,000.00 Compensation $20.44 Lock/key replacement$160.00 Total award$160.00$6,220.44 Net award $6,060.44 Bond $3,316.00 Total payable by Landlord to Tenant $6,060.44
- The tenant has filed an application claiming the landlord has breached his obligations under section 45 of the Residential Tenancies Act 1986 (“the Act”).
- Originally there were also claims in relation to reduction of the fixed term and work orders sought. However, the tenant has since moved out of the premises and so those claims were not pursued today.
- The landlord has filed a cross-application seeking payment of rent arrears, and compensation. The landlord also sought an order that the Tribunal force the tenant to apologise to him; however, I explained that is not something the Tribunal has the power to do, and so that claim was not pursued.
- I begin by noting that as with any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards and expectations. That means that it is for the party bringing the application to establish their claims “on the balance of probabilities”. That means that they must establish that what they are claiming is more likely than not.
- This is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs may be an important part of discharging this burden. Ultimately however, it is for the party making the application to decide what evidence to put before the Tribunal.
- As noted in Kaipo v Clarke & McCarthy (DC) TT233/02, in practical terms this means that: ... [L]ike anyone who brings an application before a Tribunal or Court, it is incumbent upon the applicant to provide the evidence necessary to prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not because it is up to the applicant to provide the necessary evidence. It is not up to the other parties, and it is certainly not up to the Tribunal to extract evidence.
- I do not need to be completely certain, but I need to be more certain than uncertain. In deciding any particular claim, I must consider all the evidence presented (including oral evidence during the hearing). I must weigh this evidence to decide what is more likely.
- For the sake of brevity, I may not have referred to all the evidence presented; however, the parties can be assured that it has all been carefully considered. Landlord Claims Rent Arrears
- Both parties accepted that the tenancy ended on 20 April 2023 when the tenant moved out of the premises.
- In this case however, the landlord says that the tenant is liable for additional rent because not all the keys were returned to him. He says that the tenant is liable for rent up to mid-May.
- The landlord produced a handwritten document said to be a rent summary. It does not cover the rent history from the start of the tenancy. Instead, it covers only the period after April 2023, when the tenant moved out.
- Even if I was to find that some arrears were owing, I would not have accepted the rent summary in the format provided. It does not have a running total of arrears and does not show all payments made for the duration of the tenancy.
- The landlord has been renting properties for some time and so he should already have a copy of a standard rent summary template, but if not, it is available for download for free from the Tenancy Services website here.
- In any event, I am not satisfied that the landlord has established any rent is owing. A landlord is generally not entitled to possession of a property and to collect rent at the same time.
- The landlord’s position was that because the tenant had made extra keys for flatmates that there was a potential for some other persons to have access to the premises. He submitted therefore that he only had “partial possession”.
- I reject this submission. The landlord had both legal possession and physical possession of the premises.
- If there was an issue regarding keys not being returned, then a landlord may change the locks and seek compensation for the tenant for this (which the landlord has done). It does not mean that the landlord is entitled to extra rent.
- This claim is dismissed. Compensation – Locks
- The landlord seeks compensation for the cost of changing the locks.
- At the end of the tenancy a tenant must leave the premises reasonably clean and tidy, remove all rubbish, return all keys and security devices, and leave all chattels provided for their benefit. See section 40(1)(e)(ii)-(v) of the Act.
- As noted above, the landlord says that the tenant did not return all copies of the keys that the tenant had made.
- The tenant accepts that, but says he returned two keys which was the same number provided to him. The Tenancy Agreement confirms that two keys were supplied.
- The landlord says that the tenant made additional copies of the keys for his flatmates.
- The tenant accepts he did make copies but says that he now has no idea where those keys are. He believes two of them were lost some time prior to the end of the tenancy. The third one he believes he dropped on the ground during the final inspection; either way he says he does not know where it is.
- The reason a tenant must return all keys is that there are understandable security concerns for the next tenants. Given that the tenant had additional keys cut, he should have returned all copies to the landlord.
- I therefore accept that the tenant is liable for the lock replacement. I have sighted a receipt for $160.00 and order that the tenant pay that amount to the landlord accordingly. Compensation - Electrician
- The landlord says that the tenant is liable for the callout fee for an electrician.
- The landlord says that after the tenancy ended, he discovered that the outside sensor light was not working. He then advised the tenant of this.
- It appears (and the landlord confirmed at hearing) that he had an expectation that the tenant should know what was wrong with it and/or be able to fix it. He says that the light was only a year old and so it should have been working.
- The tenant responded that he had no idea what the issue was and if the landlord could not sort it out suggested he call an electrician.
- Ultimately, an electrician attended and discovered that the light switch was simply in the off position.
- The landlord suggested that this was a “deliberate” act by the tenant and therefore the tenant was liable for the callout fee. There is no evidence to support this suggestion.
- Property maintenance is a landlord responsibility. The light was not damaged.
- If the landlord did not know how to check the switch himself or bother to do so before calling an electrician, that is a matter for him. There is simply no basis to suggest this is a tenant liability.
- This claim is therefore dismissed. Tenant Claims Preliminary Issue – HHS Compliance Date
- Under section 45(1)(ba) of the Act, a landlord must comply with the Healthy Homes Standards (“HHS”).
- Compliance dates for the HHS vary depending on the tenancy: a. All private rentals must comply within 90 days of any new or renewed tenancy after 1 July 2021, with all private rentals complying by 1 July 2024. 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 2023.
- The landlord sought to argue that the compliance date for HHS was 90 days after the start of this tenancy. This tenancy started on 15 October 2022 and so the landlord said the compliance date was 13 January 2023.
- I do not accept the landlord’s argument on this point. This landlord has had at least one prior tenancy in this premises since 1 July 2021 (that tenancy was the subject of previous Tribunal orders, including work orders and compensation).
- If the Tribunal was to accept the landlord’s interpretation that the 90 days has a “re-set" every time there is a new tenancy, that would mean that landlords could consistently not comply and then at each tenancy changeover claim another 90- day grace period. In my view this undermines the purpose of the Act which is to ensure that rental properties in New Zealand comply with basic standards to ensure they are warm and dry.
- I find that the HHS compliance date for this premises was prior to the commencement of this tenancy. Heating
- Under section 45(1)(ba) and (c) of the Act, a landlord must comply with the Healthy Homes Standards (“HHS”) and comply with all requirements in respect of building, health and safety so far as they apply to the premises.
- Breaching 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 of the Act.
- The tenant says that there was no heating in the premises throughout the tenancy.
- The HHS heating standard requires landlords to provide one or more ‘qualifying heaters’, with a capacity to heat the room to a required level. The heating standard defines what a qualifying heater would be and confirms that certain types of heaters are unacceptable heaters for the purpose of the HHS.
- In addition, it has been a legal requirement for over 75 years that every living room have an approved form of heating. See regulation 6, Housing Improvement Regulations 1947.
- The landlord accepted that there was no heating.
- He said that it was very costly to install a heat pump (over $4000) and that it was summertime when the tenants moved in, so it was not too urgent. He said that he intended to install one before the winter, but the tenants moved out before then.
- As at the date of hearing there are new tenants in the property and the landlord confirmed there is still no heating. He says that he has scheduled for it to be installed soon.
- In this case, I am satisfied that the tenant has established on the balance of probabilities that the landlord has failed to comply with the heating standard. I further find that this breach has been continuous throughout the duration of the tenancy.
- I will deal with the issue of damages below. Moisture and Mould/Insulation
- The moisture ingress and drainage standards require that residential tenancy premises 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 tenant says that there was mould and damp throughout the property for the entire duration of the tenancy.
- The tenant produced photographs and videos that do indeed show mould and damp in various places throughout the property. Mushrooms are seen growing inside one of the walls in the stairway, and there is black mould on the downstairs floor area.
- The tenant also said that the entire wall on the ground level was consistently damp. Photographs show that this particular wall is underground, with bare earth directly against it.
- The landlord accepted that there might be some damp on the ground level but said the rest of the house was sunny and north facing.
- The landlord also said that he had HHS assessment done and accepted that there were issues. He said that he had not yet remedied them because they were very expensive but that he intended to do so.
- He also said that he had offered to reduce the rent if the tenants were prepared to stay in the premises. He said it was their choice to move out, not his.
- I have sighted the HHS assessment obtained by the landlord. It clearly spells out that the property is non-compliant in respect of the moisture ingress and drainage standard. There is no ground moisture barrier.
- Even in the absence of this report which confirms non-compliance, I record that on the tenant’s evidence alone, including video and photographic evidence, I am satisfied that there is an inherent problem with mould and moisture in the property.
- I am satisfied that the tenant has established on the balance of probabilities that the landlord has failed to comply with the moisture ingress and drainage standard. I further find that this breach has been continuous throughout the duration of the tenancy.
- I will deal with the issue of damages below. Failure to Maintain – Other Issues
- Even putting to one side the specific breaches of HHS, the tenant also says that there have been numerous issues of failure to maintain and consequent loss of amenity.
- The tenant says that as soon as he moved in, he noticed a musty smell in the house especially in the downstairs area. The blinds were all covered in mould.
- In the third week of living there the upstairs shower streamed water into one of the middle floor bedrooms. It leaked through the ceiling onto a flatmate’s bed and personal belongings. The water came through the light fixture.
- The tenants advised the landlord who arranged a plumber to attend. The plumber advised that there would need to be a significant fix/renovation to address the issue. According to the tenant, the landlord simply got mad at the tradesperson when this advice was received.
- The tenant said that these issues have been ongoing since the beginning of the tenancy and that the landlord’s approach was not to fix things properly but to instead to DIY patch jobs that did not work. The tenant said that later in the tenancy the landlord sought to characterise the issues as being due to the extreme weather events in Auckland in early 2023 but the tenant says that these issues existed well before that time. Having seen correspondence and photographic or video evidence, I accept that these issues occurred prior to the 2023 storm events.
- The landlord said that when the shower leaked, he organised a plumber from [Plumbing company]. The plumber told him that he needed to retile and regrout the shower completely but this was too expensive. Instead, the landlord said he purchased some “leak stop” spray and sprayed all the joints.
- He said that a few weeks later the shower began leaking again and the plumber (the same one) told him that the wall tiles needed to be done as well.
- The landlord said that to do what was required would have cost him around $10,000 and this was too much, so he told the tenants to use the other two showers in the house. He said that he offered to reduce their rent by $30 per week to compensate for this.
- The tenant said that towards the end of the tenancy it appeared that the roof was also leaking. There was significant water ingress.
- The landlord said that he had a roof specialist attend who said that there was a problem with the way the roof had been installed, namely that the overlap between the joints was too small. The landlord said he was told that if he wanted to sort the problem out it would cost $20,000. He said he did not have this kind of money and so he offered the tenants to either leave, or to stay living there and he would offer a further discount.
- I have sighted photographic and video evidence corroborating most of the issues described by the tenant.
- The tenant denied being offered any further discount and said that the landlord did not offer him a choice. He simply said the work was not going to be done because it was too expensive.
- I am satisfied that the tenant has established on the balance of probabilities that the landlord has failed to adequately maintain the premises by not repairing issues when they were brought to his attention. This had led to a loss of amenity for the tenant.
- I will deal with the issue of damages below. Damages
- Damages in civil claims fall into two broad categories.
- Compensatory damages are as they sound; they aim to compensate any losses incurred by a party.
- Exemplary damages are designed to punish and deter. They are like a fine. In Auckland City Council v Blundell [1986] NZLR 732 the Court of Appeal stated: Exemplary and punitive [damages] are different words for the same thing. The damages are exemplary because they are meant to teach an example to the guilty officer and others. They are punitive because they are meant to punish. They are like a fine, though they go to the citizen who has been the victim of conduct.
- In this case the primary loss I must focus on in deciding the amount to compensate the tenants is what is referred to as a loss of amenity. That is, rather than a direct financial loss the tenant has essentially been paying for something he has not received.
- In this case, there has clearly been a loss of amenity. The tenant paid rent and in return expected a clean, dry, warm home that was properly maintained. For the reasons and to the extent outlined in the paragraphs above, they did not receive that.
- Overall, I consider a global figure to recompense the tenants for this loss of amenity is $3,200.00. That equates to approximately 15% of the overall rent paid by the tenant for the duration of the tenancy and takes into account the reduction already offered by the landlord (of $30 per week from 7 February to 20 April 2023).
- Exemplary damages are awarded at the Tribunal’s discretion when one party has proved that the other party has committed a defined unlawful act.
- In this case, for the reasons outlined above, I am satisfied that the landlord has committed a number of unlawful acts.
- 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) of the Act.
- Intentional means that the party who has committed the breach must be aware of it. The focus of the intention however must be the act (or omission) and not the legal knowledge of the offending party. The District Court has confirmed that: Like all citizens... [the landlord is]... deemed to know the law and on that basis a failure to provide these fundamental documents is properly seen as intentional. Parliament’s intention would be subverted if landlords were able to escape consequences for the unlawful acts involved by claiming ignorance of the law. 1
- I have determined that the established breaches were intentional. The landlord in this case was clear that he made a conscious choice not to comply with his obligations because in his view it was too expensive. 1 TMT NZ Ltd TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182, at para 37
- Moreover, this landlord is well aware of his obligations. The Tribunal has already made two orders against the landlord in respect of an earlier tenancy at this same address: a. On 3 August 2022 (4346179, 4363700), the Tribunal ordered: i. The early end of the fixed-term tenancy on 28 September 2022 as sought by the previous tenants for Mr Zhu failing to maintain the premises. ii. Mr Zhu to pay the previous tenants $3,102.30 including for not lodging the bond, taking more than 4 weeks bond, loss of amenity in the bathroom and laundry. iii. That Mr Zhu install a heat pump and repair the bathroom’s ventilation system. b. On 29 September 2022 (4363700, 4346179, 4370121), the Tribunal ordered: i. Mr Zhu to pay the previous tenants $4,506.44 to refund the bond, failing to provide an insulation statement, for rental over the advertised amount, and for breach of the Tribunal’s work order. ii. The rent be reduced to $819.00 per week because of the ongoing loss of amenity in the laundry and use of the bath. iii. The previous tenants pay water rates of $138.13 up to the final invoice of 15 September 2022.
- Taking into account the other factors in section 109(3) I find that there has been an obviously detrimental impact on the tenant due to the breaches by the landlord and there is a clear public interest for tenants, landlords and the public in general to have properties that are properly maintained, healthy, warm and safe.
- It would be just to make an order.
- I will not impose separate amounts for each identified breach but rather adopt a global figure which reflects the seriousness and multiplicity of breaches.
- The maximum allowed by Schedule 1A of the Act is $7,200.00 per breach. Given that the landlord has failed to rectify matters despite previous orders of the Tribunal, I adopt a figure in the mid-range, and order the landlord to pay the tenant $3,000.00 in exemplary damages. Final Remarks, Suppression and Filing Fee
- During the hearing, the landlord stated several times that the location of the premises was in Murrays Bay, and how “lucky” the tenants were to live in such a nice area close to the beach. He seemed quite upset that the tenants were “complaining”.
- I do not doubt that Murrays Bay is a nice area to live in, but that is no answer to the specific issues raised in respect of the premises.
- Throughout the hearing the landlord also repeatedly expressed his view of the “unfairness” of the current standards and how difficult it was to be a landlord at the present time.
- I observe that this particular property was built in 1994 and is a monoclad building. There is no specific evidence before me of it being a “leaky home” but the tenant said that most of the other properties in the street that were of a similar type had been demolished and rebuilt. I also note from publicly available records that the property was sold to the landlord in 2019 with a purchase price of $660,000, which was well below the market value for a 4-bedroom home in the area (the median sale price in Murrays Bay in 2019 was close to $1.3m). That price point further suggests some inherent defects with the premises.
- In this case, the landlord seemed to believe that if the repairs and maintenance required were not affordable for him, that meant they need not be undertaken.
- Quite clearly, that is not the case.
- A landlord renting a property is running a business. It is not a charity. Tenants are paying significant rent and in return are entitled to expect a home that is warm, dry and adequately maintained.
- If a landlord cannot afford to undertake necessary repairs and maintenance, then he should not be in the business of renting property.
- Section 95A of the Act provides that on the application of a party that has been wholly or substantially successful in proceedings the Tribunal must order that the name or identifying particulars not be published, unless the Tribunal considers that it is in the public interest to publish the names of the parties or is justified because of the parties conduct or any other circumstances of the case.
- In this case, the tenant has wholly succeeded in the claims he brought against the landlord. As there are no countervailing reasons not to do so, I therefore grant suppression of the tenant’s name and identifying details.
- The landlord has succeeded in only one respect. I see no reason to order suppression of his name or identifying details.
- Because the tenant wholly succeeded with the claim, I must reimburse the filing fee. J R Smith 22 August 2023