What was Tenancy Tribunal case 4618790 about?

The tribunal order states: The agreement to extend the fixed term of the tenancy to 4 February 2024 is set

How much money was awarded in case 4618790?

Compensation: Refund break lease cos…: $1,169.55 awarded to tenant; Compensation: Rent 17 - 22 June 2023: $437.14 awarded to tenant; Compensation: Unjustified claims fro…: $200.00 awarded to tenant; Filing Fee: $20.44 awarded to tenant

What type of tenancy dispute was case 4618790?

The dispute type was not classified.

Where can I read the official tribunal order for case 4618790?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10104853-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4618790 about?

The tribunal order states: The agreement to extend the fixed term of the tenancy to 4 February 2024 is set

How much money was awarded in case 4618790?

Compensation: Refund break lease cos…: $1,169.55 awarded to tenant; Compensation: Rent 17 - 22 June 2023: $437.14 awarded to tenant; Compensation: Unjustified claims fro…: $200.00 awarded to tenant; Filing Fee: $20.44 awarded to tenant

What type of tenancy dispute was case 4618790?

The dispute type was not classified.

Where can I read the official tribunal order for case 4618790?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10104853-Tribunal_Order_Redacted.pdf.

Unit/Flat B, 23 Onukutara Place, Huntington, Hamilton 3210 Tenancy Tribunal Case 4618790 — Tenancy dispute

Claims and awards in Tenancy Tribunal application 4618790 — net $1,827.13 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Compensation: Refund break lease costs	$1,169.55	Refund break lease costs
Compensation: Rent 17 - 22 June 2023	$437.14	Rent 17 - 22 June 2023
Compensation: Unjustified claims from the bond	$200.00	Unjustified claims from the bond
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$1,827.13
Total payable by Landlord to Tenant	$1,827.13

Claims and awards in Tenancy Tribunal application 4618790 — net $1,827.13 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Compensation: Refund break lease costs	$1,169.55	Refund break lease costs
Compensation: Rent 17 - 22 June 2023	$437.14	Rent 17 - 22 June 2023
Compensation: Unjustified claims from the bond	$200.00	Unjustified claims from the bond
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$1,827.13
Total payable by Landlord to Tenant	$1,827.13

Order

The agreement to extend the fixed term of the tenancy to 4 February 2024 is set aside.
Keid Limited T/A Quinovic Property Management and Paul Webber and Yizhou Xia must pay [The tenant/s] $1,827.13 immediately, calculated as shown in table below:

Reasons

Both parties made applications to the Tribunal after the tenancy ended in June 2023. Both were represented at three telephone hearings.
The landlord was represented by the property manager for this tenancy [The property manager/s] and the tenant by her son [The tenant’s representative]. [The tenant/s] also gave direct evidence at the third hearing.
All references to “landlord” in this decision are to the agent company (Quinovic). Introduction
The tenancy was initially for a one year “fixed term”. Towards the end of the first term, the tenant, accepted an offer from the landlord to extend the fixed term for an additional year up to 5 February 2024.
About two months into the second year, [The tenant/s] circumstances changed, and she asked the landlord to agree to end the tenancy before the end of the term.
A fixed term tenancy cannot be ended by giving notice to the other party. The tenancy can only end early if both parties agree, or by an order of the Tribunal.
In this case, the landlord did agree but on condition that the tenant pay rent until a new tenancy began and pay “break lease costs”. [The tenant/s] agreed to these terms. She moved out and has paid the costs and rent.
I have previously made an order dismissing the landlord’s application to be paid cleaning costs from the bond.
This decision deals with the tenant’s claims that the break lease costs were unreasonably high and that the landlord acted unlawfully or unfairly in its processes and by claiming amounts that it should not have.
A more central issue arose during the hearings. It became apparent from the evidence that the tenant’s agreement to extend the fixed term of the tenancy for a second year may have been based on incorrect or incomplete information.
The decision highlights an important fact: a tenancy does not automatically end on the expiry date of a fixed term. The issues
The issues to be decided are:- a. Was the tenant’s agreement to extend the fixed term based on incorrect or incomplete information (a “misrepresentation”)? b. Should the landlord be required to refund any of the break lease costs or rent the tenant has paid? c. Has the landlord done anything unlawful in – i. The charging of the break lease costs, ii. Claiming cleaning and pest control costs from the bond, iii. Charging methamphetamine test costs as part of break lease costs, iv. Not providing the results of methamphetamine testing to the tenant, v. Failing to advise the tenant she could have applied to the Tribunal to be released from the fixed term, vi. “Showing no empathy and acting unjustly” 1 towards the tenant. Was the tenant’s agreement to extend the fixed term based on incorrect or incomplete information (a “misrepresentation”)?
The initial term of the tenancy was a fixed term starting on 4 February 2022 and expiring on 5 February 2023.
On about 20 November 2022, the landlord and tenant signed a “fixed term extension offer” document and agreed to extend the fixed term of the tenancy to 4 February 2024, at a rent of $510.00 per week.
They both considered this to be binding. When the tenant wanted to end the tenancy before the end of the new fixed term, the landlord required her to pay “break lease costs” and rent up to the date of new tenants being found. This is usual when a fixed term tenancy is ended early at a tenant’s request.
However, the evidence provided by both parties for these proceedings raised a question as to whether the tenant’s agreement to extend the fixed term of the tenancy was based on incorrect or incomplete information: a “misrepresentation”.
It is a principle of law that a contract may be set aside if one party has been induced to enter into it by relying on false or incorrect representations of fact made by the other party, that were intended to be relied on. 2 A misrepresentation can be unintentional and still influence the other party.
The Tribunal may vary or set aside an agreement that has been induced by misrepresentation; s78(1)(g) Residential Tenancies Act 1986 (RTA). 1 From the written submission filed on behalf of the tenant, “Summary of Facts – V2”. 2 See Westlaw, “A-Z of NZ Law” at 18.M.5 Contract – Misrepresentation especially at 18.M5.1 and M5.2 referring to Savill v NZI Finance Ltd [1990] 3 NZLR 135 at 145 per Hardie Boys J.

Did the landlord make a false or incorrect representation of fact about the tenancy?

The important documents and communication about the term of the tenancy were: a. The tenancy agreement which said on the front page: Tenancy Commenced04 February 2022 Term of TenancyFixed Term Expiring on 05 February 2023 b. And said under “Terms and Conditions” on the second page:

NOTICE

If a tenancy is periodic a Tenant must give 28 days’ written notice to terminate the tenancy. A Fixed Term Tenancy ends on the agreed date. It may be extended for a further period by agreement between the parties on mutually agreed terms. c. An email from the landlord to the tenant in November 2022 3 , saying: As you are aware, your tenancy is due to expire in February. We would like to take this opportunity to thank you for working with us. In light of this, we are contacting you to offer an extension to your fixed term of approximately 12 months. d. The tenant’s acceptance of this offer by signing a ‘fixed term extension offer’ letter which said: This note serves to confirm that the tenancy expiry date for 23B Onukutara Place ... will be extended to 4 th February 2024. .... All other terms and conditions of the tenancy remain unchanged and in force.

A tenancy agreement and variations to it (such as the “fixed term extension offer” letter) are binding on the parties. However, the RTA says that any agreement or arrangement cannot exclude or restrict the rights or powers of a tenant. If it does, the law says that this will have no effect; see s11(3) RTA.
Section 60A(1) RTA 4 sets out what happens on the expiry of a fixed term tenancy. It says that: “On the expiry of a fixed term tenancy of more than 90 days, the tenancy continues as a periodic tenancy ...” [my underlining] unless 5 :- (a) before the expiry, both parties agree to renew or extend the fixed term, or 3 Sent on 7 November 2022 at 12:50pm. 4 There is a good summary on the Tenancy Services website at: Expiry of a fixed-term tenancy » Tenancy Services. This webpage also has a “decision tool” which can be used to calculate how much notice must be given if either party wants to end the tenancy. 5 Section 60A(2) RTA (b) at least 28 days before the expiry, the tenant gives the landlord written notice of the tenant’s intention not to continue with the tenancy, or (c) before the tenancy becomes periodic, the landlord gives a reason for ending the tenancy and gives notice based on the requirements of that reason. The reasons are the same as for ending a periodic tenancy.
If there is no mutual agreement to renew or extend the term, and if neither party gives notice to terminate the tenancy (in accordance with a right to terminate allowed for in the RTA), then a fixed term tenancy will continue after its expiry, as a periodic tenancy.
The above version of s60A RTA applies to tenancies that commenced on or after 11 February 2021. 6
The question here is whether the tenancy agreement and the landlord’s communication offering to extend the fixed term gave a false impression or representation of the situation.
In my view, they did.
Firstly, I consider that the ordinary and plain meaning of the words is that the tenancy will come to an end when the first fixed term ends. That is, on 5 February 2023 - unless the term is extended by agreement between the parties. The key words are: a. In the tenancy agreement: “fixed term expiring on 5 February 2023”, and b. In the “Notice” clause: “A fixed term tenancy ends on the agreed date”, and c. In the landlord’s email which says: “your tenancy is due to expire in February”.
The landlord says that the words used above do not say anything incorrect or false because they mean only that the first fixed term will come to an end - not that the tenancy as a whole will come to an end.
I understand the landlord’s point. The words could be said to be ambiguous because it is possible to interpret them as the landlord says.
However, I consider that ambiguous is not good enough.
In a recent District Court case, the Judge discussed the operation of s60A and said that a fixed term tenancy will become a periodic tenancy “unless an agreement [to renew or extend the fixed term], based on the full knowledge of s60A ...” is reached between the parties [my underlining]; See El Amor Limited v Cabaret [2023] NZDC 531 at 31. 6 The wording of s60A prior to this date allowed either a tenant or a landlord to give notice of an intention not to continue with the tenancy (the notice had to be given between 90 and 21 days before the expiry date of the fixed term).
The facts in that case differ from this. The landlord had falsely told the tenant that if he did not agree to an extension of the fixed term, the tenancy would terminate. That is incorrect so the Court decided that the tenant was not bound by his agreement to extend the fixed term.
The words used by the landlord in this case were not directly incorrect or false.
However, [The tenant/s] did not have full knowledge of s60A when she agreed to extend the fixed term.
This omission of information is my second reason for concluding that there was a misrepresentation.
Neither the tenancy agreement nor the later communication from the landlord gave the tenant full information. No one told the tenant that if she did not want to extend the fixed term, the tenancy would continue as a periodic tenancy (as set out in s60A RTA). Her options were not explained to her anywhere.
[The property manager/s] pointed out in the hearings that the landlord’s emails clearly invite [The tenant/s] to ask any questions or discuss options with the landlord before she agreed to extend the fixed term. [The property manager/s] says that the tenant chose not to do so. She asks whether a landlord has a duty to tell a tenant they do not have to agree to extend the term and to point out that if they don’t agree, the tenancy will continue.
It is true that the RTA does not instruct landlords that they must explain the implications of s60A RTA to tenants or give them all their legal options.
However, if statements or conduct of the landlord give an incorrect impression, then the landlord cannot remain silent. A misrepresentation can be by omission. 7
My decision is that the absence of information about all of the tenant’s options, combined with the ambiguity of the words in the tenancy agreement and the landlord’s email, together misrepresented the true position.
The misrepresentation was that the tenancy would end unless the fixed term was extended. Section 60A RTA means that is not the case.
I note that there is a readily available example of how a landlord might fully inform a tenant of the effect of s60A RTA. This is contained in the Tenancy Services “Residential tenancy agreement” template 8 in the wording directly under the “term”. I have copied this below: 7 The maintaining of silence in relation to certain matters may make other statements that have been made misleading or incorrect in all the circumstances. See Laws of New Zealand, Misrepresentation and Misleading or Deceptive Conduct, chapter 13, Lexis Nexis New Zealand. 8 https://www.tenancy.govt.nz/assets/forms-templates/residential-tenancy-agreement.pdf The landlord and tenant agree that:
The tenancy shall commence on the day of 20 .
Strike out one option: This is a periodic tenancy and may be ended by either party giving notice as required under the Residential Tenancies Act 1986. See page 4 of this agreement for more information. OR This tenancy is for a fixed term, ending on the day of 20 . NB: Fixed-term tenancies that are longer than 90 days, automatically become periodic upon the expiry of the fixed-term, unless: › a landlord gives written notice to end the tenancy on the fixed term expiry using one of the reasons listed in the Residential Tenancies Act 1986 (see section 50(1)(a) to (b)) that allows for termination of periodic tenancies; or › a tenant gives written notice of their intention not to continue with the tenancy at least 28 days before the expiry; or › before the expiry, the parties agree to extend, renew or end the fixed-term tenancy. Note if the fixed term is for 90 days or less, some tenancy laws do not apply.
A landlord could also include the above information in any communication to a tenant asking them if they wish to extend or renew a fixed term tenancy.

Were the representations intended to be relied on and were they relied on?

I have decided that some of the representations were in the words used in the tenancy agreement. This is the contract between the parties and is clearly intended to be relied on.
The words used in emails and in the “fixed term extension offer” letter are also clearly intended to be relied on.
A tenant relies on what is in the tenancy agreement and in the processes and information given to them by the landlord. I am satisfied that the false representations were intended to be relied on and that [The tenant/s] did so. Did the representations induce or cause the tenant to accept the offer to extend the fixed term?
[The tenant/s] told me 9 that she assumed that the tenancy would end if she did not accept the offer to extend the tenancy. 9 During the third hearing.
That this is what she believed is supported by an email sent to Quinovic on 29 June 2023 in which [The tenant’s representative] (by then acting on his mother’s behalf) said that [The tenant/s] “felt pressured” that, if she did not agree to extending the lease term, she “might be given notice to vacate at the end of the initial term”.
Her understanding was incorrect. Section 60A RTA means that the tenancy would have continued as a periodic tenancy.
If she had been given all of the information, or if the words had been clearer, she may not have agreed to extend the fixed term.
I find that it is more probable than not that [The tenant/s] was induced to agree to extend the fixed term of the contract to 4 February 2024 because she thought that the tenancy would end if she did not.
Section 78(1)(g) RTA specifically gives the Tribunal the power to set aside or vary an agreement between parties where it appears that the agreement has been induced by misrepresentation.
I consider this to be appropriate in this case. I have made an order setting aside the agreement to extend the fixed term of the tenancy to 4 February 2024.
The effect of this is that the tenancy became periodic from 6 February 2023 pursuant to s60A(1) RTA.

Should the landlord be required to refund the break lease fee?

The tenant has applied for a refund of some or all of the break lease costs charged by the landlord on the grounds that they are unreasonable or unjustified.
A landlord is entitled to recover from an outgoing tenant any expenses “reasonably incurred” by the landlord in respect of consenting to early termination of a fixed term tenancy; see s44A RTA.
My decision setting aside the extension of the fixed term means that the landlord is not entitled to recover these costs / expenses.
The tenant is therefore entitled to a full refund of the break lease costs she has paid which is $1,169.55. I have made this order. Should the landlord be required to refund the lost rent from 17 to 22 June 2023
I have decided that the tenancy became periodic from 6 February 2023.
This means that the tenant was legally entitled to give the landlord no less than 28 days’ notice to end the tenancy.
[The tenant/s] enquired about ending the tenancy in April 2023 and notified the landlord that her last day at the tenancy premises would be 16 June 2023. This is a period of more than 28 days.
I therefore order that the landlord refund the tenant the rent paid from 17 June to 22 June 2023. This is 6 days of rent at $510.00 per week which is $437.14. Has the landlord done anything unlawful in – a. Charging the break lease costs, b. Claiming cleaning and pest control costs from the bond, c. Charging methamphetamine test costs as part of break lease costs, d. Not providing the results of methamphetamine testing to the tenant, e. Failing to advise the tenant she could have applied to the Tribunal to be released from the fixed term,
The tenant has also applied for “exemplary damages” alleging that the landlord has acted unlawfully in a number of respects.
Exemplary damages are like a fine or a penalty and can only be awarded where a party has intentionally committed a breach specified in the RTA as an “unlawful act”. Not all breaches are unlawful acts: only those listed in Schedule 1A RTA.
I address the tenant’s claims below:- a. That some of the break lease costs or fee charged were unreasonable or unlawful: Section 44A RTA does not specify what may or may not be included in a landlord’s recovery of expenses when it consents to early termination of a fixed term tenancy. The section only requires that they are “expenses reasonably incurred” and that the landlord provides the tenant with an itemised account of what they are. I do not strictly need to decide whether the costs invoiced were reasonable because I have refunded all of these due to the fixed term agreement being set aside. However, I note that:- i. S44A RTA says “expenses” which could be interpreted as meaning only out-of-pocket expenses are able to be recovered, ii. a landlord should expect to provide receipts for those expenses (such as advertising, credit checks on new tenants etc), and iii. must be able to justify that the expenses are reasonable. b. That cleaning and pest control claims from the bond were unjustified: It is not “unlawful” for a landlord to claim cleaning and pest control costs where it reasonably considers that a tenant has not met their obligations. 10 However, I dismissed the landlord’s cleaning claim in the first hearing because the premises were clearly left reasonably clean and tidy. The landlord withdrew the pest control claim before the first hearing. I agree with the tenant that the landlord’s actions in claiming these costs from the bond were unjustified. I accept that the landlord’s decision to do this caused [The tenant/s] significant offence and stress. It was why she then asked her adult son and daughter to take over communication with the landlord and to represent her in these proceedings. Also, the whole of the $2,000.00 bond was held in dispute at the Bond Centre although the landlord sought a claim of only $576.00 in total. The landlord could have authorised the refund of the balance to the tenant immediately. I consider it appropriate to award general damages of a modest amount to recognise the stress caused and to signify that a landlord should consider its claims carefully and reasonably. I award compensation of $200.00. c. That the landlord should not have charged the tenant for between-tenants methamphetamine testing: The landlord included the cost of this testing in the break lease costs recovery, saying this is justified because an extra test is needed where a tenant ends a fixed term early. As I said above (at 66a), there is no definition of what may or may not be recovered as an expense. It may be that if a tenant breaks a fixed term tenancy very early in the term, that it is reasonable for a landlord to recover this. d. That the landlord did not provide the results of methamphetamine testing: A landlord is legally required to provide the results of contaminants testing to a tenant within 7 days of receiving the results; see s48(3B) RTA. To fail to do so is an unlawful act for which a maximum penalty of $1,000.00 may be awarded; s48(4)(c) RTA. I agree with the tenant that if she was to be charged for the testing, she was entitled to receive the results. The testing was done during what the landlord considered to be the term of the tenancy. I have not awarded exemplary damages on this occasion because I accept that the landlord considered the testing to be part of usual between tenancy processes and therefore that the negative test result was relevant only to the landlord and incoming tenants. 10 It is an unlawful act for a landlord to demand, request or accept any work or an amount to fix damage that is more than a tenant is liable for under s49B RTA. e. That the landlord failed to advise the tenant she could apply to the Tribunal to be released from the tenancy: The landlord did in fact advise the tenant of her right to apply to the Tribunal to be released from a fixed term tenancy. This was documented in the “Application for early release on fixed term tenancy” and [The property manager/s] was clear that she had explained this to [The tenant/s] in a phone call. f. That the landlord showed no empathy and acted unjustly towards the tenant: I consider that this concern is a summary of the overall effect of all of the issues addressed in this decision. I do not consider it separately again here. Conclusion
The outcome of these proceedings was not expected when the applications were made. However, they raise an important question: if a tenant does not know what all of their rights are in any particular situation, is a landlord obliged to tell them?
The answer to this, in my view, is that tenancy agreements and negotiations must be conducted openly and fairly so that all parties have the opportunity to know what it is that they are agreeing to and what their options are.
The tenant has been substantially successful in her claims, so I award the filing fee and suppress her name from the published order.

Tenancy Tribunal case 4618790 — Tenancy dispute at Unit/Flat B, 23 Onukutara Place, Huntington, Hamilton 3210

At a glance

Tenancy Tribunal case 4618790 — Tenancy dispute at Unit/Flat B, 23 Onukutara Place, Huntington, Hamilton 3210

At a glance

Award balance

Claims & awards

Order

Reasons

Did the landlord make a false or incorrect representation of fact about the tenancy?

NOTICE

Were the representations intended to be relied on and were they relied on?

Should the landlord be required to refund the break lease fee?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Did the landlord make a false or incorrect representation of fact about the tenancy?

NOTICE

Were the representations intended to be relied on and were they relied on?

Should the landlord be required to refund the break lease fee?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions