Published tribunal order
Tenancy Tribunal case 4606389 — Tenancy dispute
Decided 4 Sept 2023 · Published 4 Sept 2023 · Application 4606389
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.
- The market rent for the property is $690.00 and this shall be the rental payable from 9 August 2023 being the date on which the landlord’s notice of rent increase takes effect.
- The landlord must pay the tenant $20.44 being reimbursement of the filing fee.
Reasons
- The tenant attended the hearing.
- The landlord did not attend the hearing.
- The landlord was not present at the starting time for the hearing of 2 pm. The Tribunal delayed the start of the hearing until 2.15 pm in case the landlord had been unavoidably delayed.
- The tenant advised that the landlord’s agent completed a routine inspection on the morning of the hearing. She advised that the agent was aware that the inspection was being held early because of the hearing at 2 pm and that the hearing related to a market rent review of the property.
- I am satisfied that notice of the hearing was served on the landlord in accordance with section 91 RTA.
- The tenant has been notified by the landlord that the rent will increase from $650.00 per week to $760.00 per week from 9 August 2023.
- The tenant has applied to the Tribunal under section 25 of the Residential Tenancies Act 1986 (“RTA”). This section provides that the Tribunal, on being satisfied that the rent to become payable for the tenancy exceeds the market rent by a substantial amount, may make an order reducing the rent to an amount that is line with the market rent.
- The onus is on the tenant to establish that the rent to become payable, not only exceeds market rent, but also exceeds it by a substantial amount.
- The personal circumstances of landlord and tenant are not relevant to the Tribunal’s assessment and nor is the percentage of the proposed increase.
- The property is in the suburb of [redacted] which the tenant characterised as a suburb in the middle of the desirability and socio-economic range in [City]. The tenant advised that it is a suburb of two parts: one is comprised of older properties and the other of much newer and more valuable properties.
- The tenant advised that the property comprises: • Four small bedrooms and a small office • An ensuite and a bathroom • A large single garage with a workshop area which precludes it being used as a two car garage • An average sized section of just over 600 m2 • It includes a more recent extension • It is in an area of older properties of a similar vintage to the subject property.
- The tenant advised and provided photographic evidence that the property was tired but comfortable. The kitchen and carpets were well worn and the property has not been decorated or renovated in some years.
- From examining the information provided, including photos of the subject property and other properties available for rental, I accept the tenant’s assessment that this property falls in the middle of properties available for rent in [City] and in the suburb where the property is situated.
- The tenant provided information from the website realestate.co.nz for properties available for rent in suburbs in this middle range. This information indicated rents from $650.00 to $710.00 per week for properties with four bedrooms and two bathrooms.
- The tenant also provided information from property searches in more desirable suburbs of [City] by way of comparison. These indicated that for between $700.00 and $760.00 per week it was possible to rent a modern - in some cases almost new - property of four bedrooms, two bathrooms with double garaging.
- A search of the Trademe website and realestate.co.nz website confirmed these ranges of rental for available properties. However, the sample range was not large and revealed no reasonably comparable properties.
- The tenant provided information using the online tool from the Tenancy Services website. This shows bond information for properties where bonds have been lodged in the prior six months. It provides an indication of the non-government rental market based on bonds lodged. Tenancy Services caution on their website that it should not be used on its own to determine the market rent of any property.
- This tool showed that: • From 162 bonds lodged in [City] for four-bedroom houses, the rentals ranged from a lower quartile of $533.00 to an upper quartile of $650.00 per week. The median rental was $600.00 per week. • From 105 bonds lodged in [City] for five plus bedroom houses, the rentals ranged from a lower quartile of $600.00 to an upper quartile of $700.00 per week. The median rental was $650.00 per week. • From 96 bonds lodged in [Suburb] for four bedroom houses (there being no information on houses with more than four bedrooms), the rentals ranged from a lower quartile of $660.00 to an upper quartile of $725.00 per week. The median rental was $680.00 per week.
- Section 25(3) RTA provides: “...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.”
- In conjunction with the other information supplied by the landlord, the information from the Tenancy Services website provides information on a sufficiently large sample of properties from which it is reasonable to assess a market rent. The information from realestate.co.nz included photographs of some of the houses available for rental which the Tenancy Services website lacks. This is of assistance in trying to determine the rental for houses of similar quality.
- Having considered this information, I determine that a market rent for this property is $690.00 being above the midpoint between the highest and lowest rental for four-bedroom houses in [Suburb] to take into account of the additional fifth bedroom/office.
- The landlord’s proposed rent of $760.00 is $70.00 more per week than the market rent I have determined. This is a difference of just over 10%. The Tenancy Tribunal has in the past considered anything over 10% to be a “substantial amount”.
- The tenant has established that the proposed new rent exceeds the market rent by a substantial amount. It is therefore appropriate that the Tribunal make an order reducing the rent to $690.00 per week, being the market rent.
- Because [The applicant/s] has wholly succeeded with the claim, I must reimburse the filing fee.