Published tribunal order
Tenancy Tribunal case 4629929 — Rent arrears at 13 Balmoral Street, Levin, Levin 5510
Decided 6 Nov 2023 · Published 6 Nov 2023 · Application 4629929
- Rent arrears
Party names are redacted in the official published order.
Order
- There is an order suppressing the name of the tenant.
- The tenant is ordered to pay $5215.44, calculated below: a. Rent arrears$4495.00 b. Break fees 700.00 c. Filing fee 20.44 TOTAL$5215.44
Reasons
- Both parties attended the hearing. The tenant was represented by Mr Jenkins of the Manawatu Tenants Union whose representation had been approved on 16 October 2023.
- The landlord has applied for rent arrears, break fees of $1,374.75 for a fixed tenancy, and reimbursement of the filing fee following the end of the tenancy.
- This matter had previously been heard on 30 August 2023. On 24 August 2023 the tenant’s representative had advised that he was no longer involved and had withdrawn from the proceedings. The hearing proceeded in the absence of the tenant and orders were made.
- A rehearing was granted on the basis that the tenant had not had proper notice of the hearing. The representative was then reapproved to attend this hearing. Background
- On 26 April 2022 the parties entered into a fixed-term tenancy due to commence on 27 May 2022 and end on 25 May 2023.
- On the start date the tenant did not collect the keys. When she was contacted, she said that she would not be moving in and no longer wanted the tenancy. No further explanation was provided.
- The landlord emailed advising the tenant that there would be break fees. They would agree to reduce the fixed term on the basis that she accepted the terms of the break fees. The tenant was not happy with that and so she made an application to the Tenancy Tribunal to reduce the fixed-term.
- A mediation took place on 9 June 2022 and the next day the landlord listed the property. The mediator’s report records that the parties agreed that the landlord would commence the process of securing a replacement tenant. The report refers to a previous mediation on the same date and so it has caused some confusion. There seemed to be another report which recorded different information, but neither party had a copy of that report. The report that was produced does not specify the extent of any break fees, and that is the issue that the parties do not agree on. Rent arrears
- When parties enter into a fixed-term tenancy, their rights and obligations continue for the duration of the tenancy. When the tenant decided not to move into the premises, her obligations did not cease then. That means that she was liable for the rent until the end of the term. There is an expectation that a landlord will take steps to mitigate their loss. If a property is empty, then they are able to rent it out and earn an income.
- In this instance, that is what the landlord did. There was a short delay because the landlord believed that the tenant needed to agree to the break fees before doing so. Those matters can be dealt with separately.
- Re-tenanting a property is not done instantly. The property needs to be advertised and appropriate tenants vetted. There is inevitably some delay, even where there is a shortage of housing.
- A new tenant was secured and the landlord seeks rent up to and including 5 September 2022, which is a little over 3 months.
- Mr Jenkins argues that the tenant should be liable for only 21 days’ rent, because once she was in arrears, the landlord could have applied for termination under section 55.
- Mr Jenkins also submitted that there was a basis for the tenant to be released from the tenancy under section 56B, which provides that a tenant may withdraw from the tenancy by giving as little as two days’ notice, if the notice is “accompanied by qualifying evidence that the tenant has been a victim of family violence while a tenant of the premises. Given the tenancy had not started, it is difficult to understand that this section would apply. At the hearing the tenant said that she was in the process of separating and moving out had been unable to move into the premises because money had not been released from the partnership. I do not accept that section 56B is relevant to this case.
- I also note that even if this had been a periodic tenancy, the tenant would need to have given 28 days’ notice.
- The tenant has an ongoing responsibility to pay the rent and in the circumstances it is reasonable that she pays the rent up to 5 September 2022. I accept that the landlord did not need to apply under section 55 for termination, but as noted above, there is an expectation that they will take appropriate steps to mitigate their loss, which occurred on this occasion. The total owing was $6,600. Tenant has repaid the bond of $2,100 plus $5.00, leaving a balance of rent arrears of $4,495, which I order the tenant to pay. Letting fees
- Under section 17A of the Residential Tenancies Act 1986, no-one may require a tenant to pay a letting fee. There is an exception where there is an assignment of a lease or sub-letting. That does not apply in this instance. The effect of this is that the landlord bears the costs of advertising and tenanting a property as part of their business expenses. Break fees
- Where any tenancy ends, the time and expense of re-letting arises. When a fixed-term tenancy ends early, that expense is incurred sooner than expected and the landlord is sometimes compensated for that.
- In this instance, where the tenancy did not begin the tenant has caused the landlord to start the process again, almost immediately after that expense has just been incurred. It is therefore reasonable that the tenant should contribute to that cost.
- The next question is whether the fees are reasonable. The formula for the charges was set out in an email dated 27 May 2022 to the tenant. In summary the relevant charges for this tenancy are $85.00 an hour plus GST for dealing with enquiries, processing applications and “Refer to Diary – keep track of and charge for your time”. The hourly rate is charged in ½ hour “increments”.
- The breakdown of the landlord’s fees claimed was: Advertisement115.00 Final inspection 50.00 Credit check 28.75 8 viewings782.00 Dealing with enquiries 97.75 Processing of apps 195.50 Administration sign-up 97.75
- I indicated at the hearing that the $1.374.75 sought is considerably higher than other cases I am aware of. The landlord said that it was consistent with other cases she has been involved in, even where the amount has been contested. She provided references to 4 Tenancy Tribunal Orders.
- I decided to allow the tenant an opportunity to review the orders and for the parties to make further submissions. Those are now to hand. I have also reviewed the cases myself and note the following: a. In TT4345918 there was evidence that the tenants objected to the amount, but nonetheless, $514.62 was ordered. b. In TT4302161, the parties had agreed to pay $138.00, but the Tribunal ordered a further $181.12, making a total of $319.12. c. In TT4277068, the parties agreed to $431.25. d. The highest amount ordered was $692.87 in case TT 4315454.
- It is evident that the sum of $1,374.75 is not consistent with other cases where there has been a contest over the amount.
- The tenant says that a figure of $498.45 is fair and reasonable. Mr Jenkins notes that in none of the four cases cited was a breakdown of the fees provided. He says the tenant should not pay for a final inspection fee of a property that she did not move into, that a credit check should be an ordinary part of doing business, and that the tenant should not have to pay for the 7 viewings that did not result in the property being let.
- Taking into account the efforts required to re-tenant the property and consistency with other cases I have decided that reasonable compensation in this case is $700.00 and that amount is ordered.
- Because Team Group Rentals Limited As Agent For Ella Boshuis Family Trust Peter Boshuis has substantially succeeded with the claim I have reimbursed the filing fee.
- I have also decided to suppress the name of the tenant under section 95A of the Act. This is in recognition that there are a number of issues arising from her relationship break up including allegations of violence, custody and property disputes, and these were relevant to her circumstances at the time she did not honour her obligations under the tenancy agreement and to her circumstances at the time of the Tenancy Tribunal hearing. This suppression order does not prevent this order being produced in any proceedings before the Family Court.