What was Tenancy Tribunal case 4614949 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 4614949?

Break Lease Costs: $642.66 awarded to landlord; Difference In Rent 4/7/23-20/23: $2,320.00 awarded to landlord; Filing Fee: $20.44 awarded to landlord; Rent Arrears: $659.13 awarded to landlord

What type of tenancy dispute was case 4614949?

The primary dispute was Rent arrears.

Where can I read the official tribunal order for case 4614949?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9421046-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4614949 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 4614949?

Break Lease Costs: $642.66 awarded to landlord; Difference In Rent 4/7/23-20/23: $2,320.00 awarded to landlord; Filing Fee: $20.44 awarded to landlord; Rent Arrears: $659.13 awarded to landlord

What type of tenancy dispute was case 4614949?

The primary dispute was Rent arrears.

Where can I read the official tribunal order for case 4614949?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9421046-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4614949 — Rent arrears

Claims and awards in Tenancy Tribunal application 4614949 — net $3,244.53 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Rent arrears to 4/7/23	$659.13	Rent arrears to 4/7/23
Break lease costs	$642.66	Break lease costs
Difference in rent 4/7/23-20/23	$2,320.00	Difference in rent 4/7/23-20/23
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$3,244.53
Total payable by Tenant to Landlord	$3,244.53

Order

An application for suppression has been made in this case, and the Tribunal orders suppression of both parties names and identifying details.
[The tenant/s] must pay [The landlord/s] $3,244.53 immediately, calculated as shown in table below.
The Bond Centre is to pay the bond of $397.70 ([Bond number suppressed]) to [The landlord/s] immediately.
[The tenant/s] must pay the debt in order 2 at the rate of $50 per week.
The first payment must be made on Thursday 14 September 2023 and payments must continue every Thursday until the debt is paid in full.
If [The tenant/s] fails to make any payment within 2 working days of the due date, the balance of the debt owing will be payable immediately and can be enforced through the District Court.
All other claims are dismissed.
This order replaces the Tribunal order of 24 July 2023.

Reasons

Both parties attended the hearing which was set down as a rehearing of the original application of the landlord. [The landlord’s representatives] represented the landlord.
For clarity, as this matter was heard in rehearing and different findings have been made, this order replaces the first order of 24 July which is no longer in force.
The landlord has applied for rent arrears, compensation, refund of the bond, and reimbursement of the filing fee following the end of the tenancy. I discuss each claim separately as follows below but note that where matters are in contention, the relevant evidential standard is the balance of probabilities. In other words, what is more likely than not. Further, the burden of proving their claim lies with the applicant, the landlord.
The claim for key replacement was withdrawn at the hearing.

How much is owed for rent?

This was a fixed term tenancy agreed for the dates of 20 February 2023 until 21 February 2024. Unfortunately, several months into the tenancy [The tenant/s] financial circumstances changed and he could no longer afford the tenancy. He therefore gave notice to the landlord and agreed to the break lease conditions they advised him of 1 .
Both parties commenced vigorously advertising for replacement tenants however no interest came of the efforts for the first six weeks of advertising. [The landlord’s representative] then spoke with [The tenant/s] about reducing the advertised rent in an effort to stimulate interest. He did advise [The tenant/s] that if the rent was reduced, he would be liable for the difference in the expected and obtained rental income on the basis of his fixed term tenancy agreement.
[The tenant/s] agreed, and the property was advertised at $680 per week rather than the $720 [The tenant/s] rented it for. Unfortunately, this reduction was not 1 email 26/4/23 enough to stimulate sufficient interest and the rent was subsequently reduced further to $650. It was at that price that a replacement tenancy was secured to which [The tenant/s] agreed.
[The tenant/s] had stopped paying rent in late May which is why his rent arrears were $3,141.43 on the last day of his tenancy; 4 July. He agrees that he knew he was liable for rent up until a replacement tenancy was found and he simply didn’t pay it as he could not afford it.
The landlord was entitled to receive rent in accordance with the tenancy agreement. Therefore, they were entitled to receive $720 per week until the end of the tenancy on 4 July. [The tenant/s] had agreed with this requirement, both when he signed the fixed term tenancy agreement and when he agreed to the break lease conditions. I am satisfied the amount claimed is proven.
I do note that the adjudicator in the initial hearing made a different finding on the basis that the rental market was low at the time and proportionately the rent was high. I do not have before me an application for a market rental declaration so am not entitled to make a finding as to the market rent for the property. I am also satisfied that both parties were aware of their rights and responsibilities in relation to the fixed term tenancy and the premature ending of it.
The second claim of the landlords with respect to rent is for the difference in the expected income under this tenancy ($720) per week and the income they are actually obtaining ($650) per week until the end of the contracted tenancy; 21 February 2024. [The tenant/s] is unsure of his liability in this respect. He agrees he was told and agreed to pay the difference during discussions. Although he doesn’t actively disagree with this claim, the adjudicator’s finding in the previous decision was to decline the claim. I make a different finding here, therefore I discuss my reasoning as follows.
Parties enter into a fixed term tenancy for security. For tenants this is security of tenure; they can be sure they have a home for at least the agreed term. For landlords it is security of income; they can rely on a set amount of income from their investment.
If a tenant defaults on that contract, and the landlord accepts the repudiation, then the tenancy ends on the terms agreed. In such a situation of surrender the landlord does not have to agree and can stipulate terms provided they are reasonable. One of those terms may be preservation of the expected income.
There are several arguments as to why a landlord may be entitled to recover the rent difference. Firstly, such a loss could be considered an expense reasonably recoverable pursuant to s44A of the Residential Tenancies Act 1986 (RTA) because it is a cost the landlord is incurring because of the breaking of the lease. I discuss s44 further below.
Alternatively, the loss can be considered as damages to reinstate the ‘victim’, being the landlord, of the contract repudiation to the position they would have been in had the breach in contract not incurred. Damages are generally to reinstate the injured party, so far as money can do it, to be in the same position as they would have been in, but for the breach of the tenancy agreement. Liability exists for foreseeable losses flowing from the breach of a tenancy agreement.
A third argument is founded in agreement. Here, the parties agreed to end the tenancy on the basis that [The tenant/s] would ensure that the landlord received the amount of rent he contracted for, for the duration of the tenancy term. In other words, [The tenant/s] agreed to pay the short fall in rent as a term of breaking his lease.
In entering the fixed term tenancy, [The tenant/s] was agreeing to pay weekly rent of $720 per week for the duration. It therefore follows that the landlord was entitled to rely on that income. In agreeing to [The tenant/s] repudiating the contract, the landlord was entitled to ensure they were not in a financially worse of situation.
Accordingly, I am satisfied that the agreement is consistent with [The tenant/s] legal obligations under the tenancy agreement and the RTA. In saying that, I think it is an implied term of the agreement that the landlord would make reasonable efforts to obtain a replacement tenancy on the same terms, and any reduction in rate would be reasonable in the circumstances.
Having considered [The landlord’s representative] evidence I am satisfied that they did act reasonably in advertising at the same rental rate for a number of weeks prior to reducing the rate, [The tenant/s] agrees. I am also satisfied that they were sufficiently diligent in their efforts to secure a replacement tenancy for [The tenant/s] but were forced, because of the market, to reduce the rent to obtain that replacement. The situation would have been more financially dire for [The tenant/s] had the replacement not been obtained.
I further consider that it is in the public interest to find this clause lawful. It is in the interests of tenants generally to be able to work with their landlord to agree to end a fixed term tenancy early. If failing to accept such a term resulted in landlords being significantly out of pocket by agreeing to end early, they may be discouraged from making those agreements.
The previous adjudicator referred to section 49 of the RTA which requires parties to take reasonable steps to mitigate loss. I consider that both parties did so here.
Accordingly, the amounts sought are ordered. Should [The tenant/s] pay the break lease costs?
The landlord claims $642.66 in break lease costs. The requirements around recovery of expenses incurred by a landlord when agreeing to end a fixed term tenancy early are set out in section 44A of the RTA. S44A states that a landlord is entitled to recover from an outgoing tenant any expenses reasonably incurred by the landlord in respect of the agreement. However, they must provide an itemised account to the tenant of those expenses incurred before they seek recovery of same. This section was designed to end the practice of landlords charging tenants set break lease fees and rather be reimbursed for the actual costs incurred.
The landlord has provided an itemised account and has reduced the amount from the actual costs they incurred. The tenancy was ended some seven months prior to the contract end date. The landlord had not expected to incur these costs at this time. Accordingly, I find that the landlord complied with s44 and is entitled to reimbursement of this claim.

Did the tenant comply with their obligations at the end of the tenancy?

At the end of the tenancy the 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) RTA.
[The landlord’s representative] says [The tenant/s] did not leave the property reasonably clean and tidy and so seeks reimbursement of the cleaner’s fee of $138. The photos provided in support of the claim are of a small amount of rubbish on the deck, undusted skirtings, modem, small areas of dust and dirty handles and light coverings.
[The tenant/s] does feel he left the premises reasonably clean and tidy and says the items remaining were not his and were present at the commencement of the tenancy.
The tenant's statutory obligation pursuant to the RTA is to leave the premises reasonably clean and reasonably tidy allowing for fair wear and tear. This is not an absolute standard, and it does not mean that the premises will necessarily be ready for occupation by a new tenant straight away. It is to be expected that a landlord will spend some time (or pay someone else) on cleaning and maintenance work between tenancies. This is part of the business of being a landlord.
What is required of a tenant is that the premises, including the stove and bathroom fittings are cleaned (wiped, vacuumed etc) and all personal items removed. A tenant is not required to rigorously clean all walls, ceilings, lightshades, skirtings, behind appliances or the outside of the house.
My assessment of the evidence is that [The landlord’s representative] did leave the house, on the whole, reasonably clean and tidy. There are some minor areas remaining, but I consider they fall over the statutory threshold [The landlord’s representative] is to be held to. Accordingly, this claim is dismissed.

Should the filing fee be awarded?

Because [The landlord/s] has substantially succeeded with the claim I have reimbursed the filing fee.

Should suppression orders be made?

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. The landlord was successful in their claim and as [The tenant/s] consented to some orders it is appropriate that both parties’ applications for suppression are approved.

Claims and awards in Tenancy Tribunal application 4614949 — net $3,244.53 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Rent arrears to 4/7/23	$659.13	Rent arrears to 4/7/23
Break lease costs	$642.66	Break lease costs
Difference in rent 4/7/23-20/23	$2,320.00	Difference in rent 4/7/23-20/23
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$3,244.53
Total payable by Tenant to Landlord	$3,244.53

Order

An application for suppression has been made in this case, and the Tribunal orders suppression of both parties names and identifying details.
[The tenant/s] must pay [The landlord/s] $3,244.53 immediately, calculated as shown in table below.
The Bond Centre is to pay the bond of $397.70 ([Bond number suppressed]) to [The landlord/s] immediately.
[The tenant/s] must pay the debt in order 2 at the rate of $50 per week.
The first payment must be made on Thursday 14 September 2023 and payments must continue every Thursday until the debt is paid in full.
If [The tenant/s] fails to make any payment within 2 working days of the due date, the balance of the debt owing will be payable immediately and can be enforced through the District Court.
All other claims are dismissed.
This order replaces the Tribunal order of 24 July 2023.

Reasons

Both parties attended the hearing which was set down as a rehearing of the original application of the landlord. [The landlord’s representatives] represented the landlord.
For clarity, as this matter was heard in rehearing and different findings have been made, this order replaces the first order of 24 July which is no longer in force.
The landlord has applied for rent arrears, compensation, refund of the bond, and reimbursement of the filing fee following the end of the tenancy. I discuss each claim separately as follows below but note that where matters are in contention, the relevant evidential standard is the balance of probabilities. In other words, what is more likely than not. Further, the burden of proving their claim lies with the applicant, the landlord.
The claim for key replacement was withdrawn at the hearing.

How much is owed for rent?

This was a fixed term tenancy agreed for the dates of 20 February 2023 until 21 February 2024. Unfortunately, several months into the tenancy [The tenant/s] financial circumstances changed and he could no longer afford the tenancy. He therefore gave notice to the landlord and agreed to the break lease conditions they advised him of 1 .
Both parties commenced vigorously advertising for replacement tenants however no interest came of the efforts for the first six weeks of advertising. [The landlord’s representative] then spoke with [The tenant/s] about reducing the advertised rent in an effort to stimulate interest. He did advise [The tenant/s] that if the rent was reduced, he would be liable for the difference in the expected and obtained rental income on the basis of his fixed term tenancy agreement.
[The tenant/s] agreed, and the property was advertised at $680 per week rather than the $720 [The tenant/s] rented it for. Unfortunately, this reduction was not 1 email 26/4/23 enough to stimulate sufficient interest and the rent was subsequently reduced further to $650. It was at that price that a replacement tenancy was secured to which [The tenant/s] agreed.
[The tenant/s] had stopped paying rent in late May which is why his rent arrears were $3,141.43 on the last day of his tenancy; 4 July. He agrees that he knew he was liable for rent up until a replacement tenancy was found and he simply didn’t pay it as he could not afford it.
The landlord was entitled to receive rent in accordance with the tenancy agreement. Therefore, they were entitled to receive $720 per week until the end of the tenancy on 4 July. [The tenant/s] had agreed with this requirement, both when he signed the fixed term tenancy agreement and when he agreed to the break lease conditions. I am satisfied the amount claimed is proven.
I do note that the adjudicator in the initial hearing made a different finding on the basis that the rental market was low at the time and proportionately the rent was high. I do not have before me an application for a market rental declaration so am not entitled to make a finding as to the market rent for the property. I am also satisfied that both parties were aware of their rights and responsibilities in relation to the fixed term tenancy and the premature ending of it.
The second claim of the landlords with respect to rent is for the difference in the expected income under this tenancy ($720) per week and the income they are actually obtaining ($650) per week until the end of the contracted tenancy; 21 February 2024. [The tenant/s] is unsure of his liability in this respect. He agrees he was told and agreed to pay the difference during discussions. Although he doesn’t actively disagree with this claim, the adjudicator’s finding in the previous decision was to decline the claim. I make a different finding here, therefore I discuss my reasoning as follows.
Parties enter into a fixed term tenancy for security. For tenants this is security of tenure; they can be sure they have a home for at least the agreed term. For landlords it is security of income; they can rely on a set amount of income from their investment.
If a tenant defaults on that contract, and the landlord accepts the repudiation, then the tenancy ends on the terms agreed. In such a situation of surrender the landlord does not have to agree and can stipulate terms provided they are reasonable. One of those terms may be preservation of the expected income.
There are several arguments as to why a landlord may be entitled to recover the rent difference. Firstly, such a loss could be considered an expense reasonably recoverable pursuant to s44A of the Residential Tenancies Act 1986 (RTA) because it is a cost the landlord is incurring because of the breaking of the lease. I discuss s44 further below.
Alternatively, the loss can be considered as damages to reinstate the ‘victim’, being the landlord, of the contract repudiation to the position they would have been in had the breach in contract not incurred. Damages are generally to reinstate the injured party, so far as money can do it, to be in the same position as they would have been in, but for the breach of the tenancy agreement. Liability exists for foreseeable losses flowing from the breach of a tenancy agreement.
A third argument is founded in agreement. Here, the parties agreed to end the tenancy on the basis that [The tenant/s] would ensure that the landlord received the amount of rent he contracted for, for the duration of the tenancy term. In other words, [The tenant/s] agreed to pay the short fall in rent as a term of breaking his lease.
In entering the fixed term tenancy, [The tenant/s] was agreeing to pay weekly rent of $720 per week for the duration. It therefore follows that the landlord was entitled to rely on that income. In agreeing to [The tenant/s] repudiating the contract, the landlord was entitled to ensure they were not in a financially worse of situation.
Accordingly, I am satisfied that the agreement is consistent with [The tenant/s] legal obligations under the tenancy agreement and the RTA. In saying that, I think it is an implied term of the agreement that the landlord would make reasonable efforts to obtain a replacement tenancy on the same terms, and any reduction in rate would be reasonable in the circumstances.
Having considered [The landlord’s representative] evidence I am satisfied that they did act reasonably in advertising at the same rental rate for a number of weeks prior to reducing the rate, [The tenant/s] agrees. I am also satisfied that they were sufficiently diligent in their efforts to secure a replacement tenancy for [The tenant/s] but were forced, because of the market, to reduce the rent to obtain that replacement. The situation would have been more financially dire for [The tenant/s] had the replacement not been obtained.
I further consider that it is in the public interest to find this clause lawful. It is in the interests of tenants generally to be able to work with their landlord to agree to end a fixed term tenancy early. If failing to accept such a term resulted in landlords being significantly out of pocket by agreeing to end early, they may be discouraged from making those agreements.
The previous adjudicator referred to section 49 of the RTA which requires parties to take reasonable steps to mitigate loss. I consider that both parties did so here.
Accordingly, the amounts sought are ordered. Should [The tenant/s] pay the break lease costs?
The landlord claims $642.66 in break lease costs. The requirements around recovery of expenses incurred by a landlord when agreeing to end a fixed term tenancy early are set out in section 44A of the RTA. S44A states that a landlord is entitled to recover from an outgoing tenant any expenses reasonably incurred by the landlord in respect of the agreement. However, they must provide an itemised account to the tenant of those expenses incurred before they seek recovery of same. This section was designed to end the practice of landlords charging tenants set break lease fees and rather be reimbursed for the actual costs incurred.
The landlord has provided an itemised account and has reduced the amount from the actual costs they incurred. The tenancy was ended some seven months prior to the contract end date. The landlord had not expected to incur these costs at this time. Accordingly, I find that the landlord complied with s44 and is entitled to reimbursement of this claim.

Did the tenant comply with their obligations at the end of the tenancy?

At the end of the tenancy the 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) RTA.
[The landlord’s representative] says [The tenant/s] did not leave the property reasonably clean and tidy and so seeks reimbursement of the cleaner’s fee of $138. The photos provided in support of the claim are of a small amount of rubbish on the deck, undusted skirtings, modem, small areas of dust and dirty handles and light coverings.
[The tenant/s] does feel he left the premises reasonably clean and tidy and says the items remaining were not his and were present at the commencement of the tenancy.
The tenant's statutory obligation pursuant to the RTA is to leave the premises reasonably clean and reasonably tidy allowing for fair wear and tear. This is not an absolute standard, and it does not mean that the premises will necessarily be ready for occupation by a new tenant straight away. It is to be expected that a landlord will spend some time (or pay someone else) on cleaning and maintenance work between tenancies. This is part of the business of being a landlord.
What is required of a tenant is that the premises, including the stove and bathroom fittings are cleaned (wiped, vacuumed etc) and all personal items removed. A tenant is not required to rigorously clean all walls, ceilings, lightshades, skirtings, behind appliances or the outside of the house.
My assessment of the evidence is that [The landlord’s representative] did leave the house, on the whole, reasonably clean and tidy. There are some minor areas remaining, but I consider they fall over the statutory threshold [The landlord’s representative] is to be held to. Accordingly, this claim is dismissed.

Should the filing fee be awarded?

Because [The landlord/s] has substantially succeeded with the claim I have reimbursed the filing fee.

Should suppression orders be made?

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. The landlord was successful in their claim and as [The tenant/s] consented to some orders it is appropriate that both parties’ applications for suppression are approved.

Tenancy Tribunal case 4614949 — Rent arrears

At a glance

Tenancy Tribunal case 4614949 — Rent arrears

At a glance

Award balance

Claims & awards

Dismissed claims

Order

Reasons

How much is owed for rent?

Did the tenant comply with their obligations at the end of the tenancy?

Should the filing fee be awarded?

Should suppression orders be made?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Dismissed claims

Order

Reasons

How much is owed for rent?

Did the tenant comply with their obligations at the end of the tenancy?

Should the filing fee be awarded?

Should suppression orders be made?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions