Published tribunal order
Tenancy Tribunal case 4643148 — Smoke alarms at 10 Kingussie Place, Highland Park, Auckland 2010
Decided 24 Nov 2023 · Published 24 Nov 2023 · Application 4643148
Mixed / unclear
- Smoke alarms
- Exemplary damages
Order
- No order for suppression is made in this case, given both parties have both won and lost various aspects of their claim.
- Link2 Associates Limited owes Kelly Loftus the sum of $8,000, as set out in the table below. ItemAmount exemplary damages for failure to provide installation statement$500 breach of landlord’s obligations under s 45 of the Residential Tenancies Act 1986 $500 exemplary damages for failure to install smoke alarms$5,000 exemplary damages for failure to supply extractor fans / ventilation standards breached $1,000 exemplary damages for retaliatory termination notice$1,000 total$8,000
- Kelly Loftus owes Link2 Associates Limited rent as at 24 November 2023 of $9,150.
- The sum of $8,000 ordered in favour of Kelly Loftus above is to be offset against the sum of $9,150 owing by the Kelly Loftus 2 to Link2 Associates Limited, with the consequence that Kelly Loftus owes Link2 Associates Limited unpaid rent of $1,150 as at today.
- There being unpaid rent owing as at the date of the hearing, the tenancy is terminated immediately, with possession of the premises to be returned to the landlord on 13 December 2023 at 5pm.
- The landlord is to immediately install compliant smoke alarms at the property. Until those smoke alarms are installed, the tenant is entitled to off-set a further $300 per week off the weekly rent.
Reasons
- Both parties attended the hearing.
- The tenancy commenced on 14 March 2023, although the written agreement was dated 24 May 2023, for reasons explained below. The weekly rent is $700. Initially it was $650 per week but was increased to $700 per week on 14 August 2023.
- The tenant’s previous tenancy was at the property next door, at 8 Kingussie Place. The landlord was also her landlord in respect to that tenancy.
- The tenant filed this application on 18 August 2023, asking for work orders relating to an alleged sewage leak and other items. The sewerage has now been fixed. She claimed compensation and exemplary damages for the state of the premises, lack of smoke alarms, failure to comply with Healthy Homes Standards, and exemplary damages for issuing a retaliatory notice to terminate.
- Further, the tenant claims the weekly rent of $700.00 is above market rent.
- The landlord filed a cross application, seeking an order for termination on the basis the rent has not been paid since 30 August 2023. As at the date of the hearing, his unchallenged evidence was that the rent owing as at the date of the hearing was $9,150. On 21 September 2023, the landlord issued a 14 day notice relating to the unpaid rent. That notice has not been complied with. Background
- The tenant used to live in 8 Kingussie Place. The tenant at 10 Kingussie was moving out and the tenant claims the landlord indicated he may have to sell (both 8 and 10 Kingussie).
- The tenant was worried that she would lose her accommodation.
- The premises at 10 Kingussie Place were not then in a good condition. There was rubbish everywhere outside. The lawns were up to the tenant’s knees. Inside the house there were holes in the wall, there was rat or mice excrement and cockroaches in the cupboards, there were lights that would only sometimes work,, the sliding doors were hard to open, there was mould in the bathroom.
- The tenant had a friend who said she might be interested in renting 10 Kingussie Place, but upon viewing the property she did not want to move in.
- The tenant’s friend said, however, that she was interested in the tenant’s premises at 8 Kingussie Place. The tenant decided she would take it on herself to fix up 10 Kingussie so that she could move in there and her friend could move into 8 Kingussie. She did not discuss this with the landlord at the time. She simply set about completing repairs on the property. She hoped that this would dissuade the landlord from selling.
- She therefore accepted she made that decision and then took steps to fix up 10 Kingussie, without the landlord’s agreement.
- Photographs of a cockroach, rubbish outside and a hole in the wall were produced. No photographs were produced of any other aspect of the property at the commencement of the tenancy.
- The tenant said she arranged to mow the lawns, had a carpet cleaner come in, fixed the holes in the walls, painted the interior of the house, cleaned it and generally fixed it up so that it was tenantable.
- The tenant got four Bunnings flexi bins, at a cost of $54.90 each. These cost $150 each to be taken away and the tenant has paid for two to be taken away. The other two remain on site.
- The tenant produced the following invoices: a) Mitre 10 invoice for paint of $257.17 b) An invoice from Bunnings for one of the flexi bins and other cleaning items for $80.80 c) An invoice for lawn mowing dated 11 March d) No other invoices for any of the alleged repairs were produced. The notices to remedy
- The tenant issued a notice to remedy on 19 June 2023. This covered a range of issues, including “cesspit overflowing”, and other issues, to be dealt with below.
- The tenant claims she spoke to the landlord after issuing the first notice to remedy. She claims he said he would not be spending a cent on the property or on the tenant, because she was “shit”. He allegedly said that the tenant should be grateful for having a tenancy.
- In around August 2023 the tenant noticed a dreadful stink. She did not immediately realise it was a broken sewerage pipe. When she would flush the toilet she could see the sewerage rushing out from under the house. It would then run down the driveway and into the stormwater drain.
- The tenant asked the landlord about it on 10 August 2023 but allegedly, once again, he said he was not going to spend a cent on the tenant or the property.
- This led to the tenant issuing a second notice to remedy on 11 August 2023.
- The tenant called the Council, also on 11 August 2023.
- The landlord issued a purported two-week termination notice the same day the tenant sent the second notice.
- The tenant believed the notice was retaliatory because she received the notice on the same day she issued the second 14 day notice
- The landlord’s reason for issuing the 14 day notice to end the tenancy was because he wished to start his redevelopment of the site. He believed the date was just coincidence and he had also given the same 14 day notice to the other premises on the site.
- Council came around on 11 August 2023 and on subsequent occasions they returned with Watercare. They did testing using dyes which were flushed down the toilet to establish there was leaking sewerage. The tenant was told by Council that the sewerage leak was a health hazard and said it would be repairing the issue.
- Council ended up fixing the issue a few weeks later. Other issues
- The tenant’s case, as it unfolded, read very much as an impression of a shopping list of items she wished to claim, not all of which were raised on her application. In addition to the foregoing, the tenant submitted at the hearing that she is claiming: a. that the landlord was overseas on one occasion for more than 21 days without appointing an agent. b. she has asked for information about resource consent but that it has not been provided to her c. there was no insulation or insurance statement provided with the agreement. d. there have never been any smoke alarms at the property. e. General failure to comply with Healthy Homes standards. f. She claims she has been paying a substantial amount above market rent. g. No heating at the property. h. No extractor fan in the kitchen or bathroom. i. There was a hole in the deck and nails were sticking out of the deck. j. There is a stormwater issue. The landlord’s position
- The landlord said upon his return from a trip to Australia in around April this year he first discovered the tenant had moved into 10 Kingussie, and he says that was how the tenancy started. He said he had already by then decided to develop the property, however, agreed to put in place what he referred to as a temporary agreement, at the tenant’s insistence, which provided for termination on 14 days notice. He claims that the tenant was extremely grateful to be given the tenancy because she claimed it was a much nicer premises then other accommodation she had obtained.
- As to the rubbish left behind by the prior tenant, he claims that this was in fact the tenant’s rubbish that she had been throwing over the fence when she was living in 8 Kingussie. He claims that he had previously spoken to her about that rubbish and she had accepted she should clean it up. In return, the landlord agreed to give the tenant $400, which was paid on 24 March 2023.
- He said that whilst the tenant was living in 8 Kingussie, the agreement was that her rent would include water charges. The landlord was however getting very high water bills, due to the tenant’s spa. The landlord spoke with the tenant about this and the parties agreed that rather than paying the landlord for the extra water, the tenant would buy a new dishwasher and an oven.
- The landlord said that when the tenant moved to 10 Kingussie, she took the new dishwasher she had bought with her. The landlord had, however, wanted that to stay at 8 Kingussie and he was unhappy she had removed it. Further, the landlord discovered that she had never purchased a new oven as agreed. As evidence of this agreement, the landlord has a text from the tenant dated 10 June 2023 accepting she still had to sort the oven. The landlord has brought no claim in relation to those items.
- The landlord accepts that he was overseas on one occasion for more than 21 days without appointing an agent but says the tenant sent him a text dated 10 June 2023 saying everything was sorted so he did not consider it was important to appoint one and further, he was returning to New Zealand soon anyway.
- The landlord is not denying there have ever been any smoke alarms, or that there was no insulation or insurance statement provided with the agreement. His position is that this was only to be a temporary tenancy, terminable on two weeks notice. As a result of the prior order made in this matter, he now understands such tenancies cannot be terminated in this way and that the fact this was intended to be temporary does not obviate him from his obligations as a landlord.
- The landlord says there were only meant to be two people living out the house, now the tenant has her partner living there, who is on bail. The landlord has brought no claim about that.
- The landlord denies saying the tenant “was shit”. He said the tenant has tried to twist what he said. He says all that he emphasised was how grateful the tenant had been at the beginning to get the tenancy because she said the premises were far nicer than other premises she had lived in.
- The landlord said he would not have allowed any tenant to move into the premises without first spending money to get the premises compliant and repaired. This situation has been caused by the tenant who simply moved in without his permission.
- That said, he has received the notices to remedy, which he has not complied with.
- The landlord says he is willing to fix everything set out in the notice to fix.
- In relation to the sewerage, the landlord was never aware of any issues about this prior to the tenancy. He left it to Council to fix as it said it was going to.
- He accepts that when the issues were raised with the landlord, he told the tenant that because the tenant was behind in rent, had failed to supply the oven, return the dishwasher and move the flexi bins, he would do nothing to repair. He now knows that that was not a lawful position to take.
- The landlord says he is not aware of any stormwater issue. Prior order
- On 6 September 2023, another adjudicator found that the notice to terminate was invalid and retaliatory. The Tribunal found that the issuing of the notice was an unlawful act. The fixing of exemplary damages was adjourned to this hearing. It was not clear why the prior adjudicator declined to make an order that day. Issues
- Arising out of the foregoing, the following are the relevant issues: a) Did the landlord fail to comply with its obligations to provide and maintain the property in a reasonable state of repair and to comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises? Was there a source of heating at the property? b) Did the landlord provide an insulation statement and insurance policy? c) Did the landlord provide an extractor fan in the kitchen and a fan in the bathroom? d) Was the landlord outside of New Zealand for more than 21 days without appointing an agent? e) Was the tenant paying a substantial amount above market rent? f) Did the landlord supply smoke alarms? g) Should exemplary damages be ordered for the retaliatory notice and if so in what amount? h) Should there be an order for termination of the tenancy?
- Before I go on to consider these issues, I record that as with any case before the Tribunal, it is the obligation of the party bringing the claim to prove that claim on the balance of probabilities. They must put before the Tribunal sufficient evidence to prove that the facts that they say have taken place have indeed taken place. Bare oral assertions without any supporting evidence can often be inadequate. Photographs and other documentary evidence are often important evidence to put before the Tribunal to corroborate an applicant’s claim. It is made clear to applicants that such information must be submitted to the tribunal ahead of a hearing or alternatively brought to the hearing itself in hard copy form. Did the landlord fail to comply with its obligations to provide and maintain the property in a reasonable state of repair and to comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises?
- Under s 45 of the RTA, a landlord must provide and maintain the premises in a reasonable state of repair, having regard to the age and character of the premises and the period during which the premises are likely to remain habitable and available for residential purposes. A landlord must also comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises. 1
- The landlord has an obligation under the Housing Improvement Regulations 1947, regulation 6 provides that “every living room shall be fitted with a fireplace and chimney or other approved form of heating.” 1 Section 45 of the RTA
- This is an unusual case in that the tenancy did not start until after the tenant had moved in. The tenant does not deny that she moved into the property and undertook repairs before informing the landlord.
- The rent review statement which was supplied by the landlord shows that the tenant has paid continuous rent up to a certain point to the landlord from the commencement of her earlier tenancy, back in October 2022. The tenancy agreement in relation to that tenancy which was provided by the tenant records that the weekly rent was $650.
- The tenancy agreement in relation to the new tenancy the subject of this application is dated 24 May 2023 and it records that the weekly rent was $700 per week.
- The weekly rent summary that was provided by the landlord is consistent with the start date of the new tenancy being late May / early June as it records that the tenant had been paying $650 per week but then fell into arrears in around mid- June 2023 for a short period when the rent had increased to $700 and during a time when she had not increased her weekly payment.
- I find that this tenancy commenced on 24 May 2023 which is the date on the signed agreement. 43 The evidence I heard from the tenant was that she undertook significant repairs herself before she moved in, well prior to this date. Her evidence was there were cockroaches, rubbish outside and holes in the wall. The tenant said she arranged to mow the lawns, had a carpet cleaner come in, fixed the holes in the walls, painted the interior of the house, cleaned it and generally fixed it up so that it was tenantable.
- I find that all of that repair work was undertaken before the commencement of the tenancy. As such, the landlord has not breached its obligations under s 45 of the RTA with respect to those items because at the date of commencement of the tenancy that repair work had been done.
- There are however other aspects of the tenancy where I find that there was an ongoing proven failure on the part of the landlord in the respects set out above. These were as follows: a) the lack of any source of heating in the living area / lack of a heat pump b) there was a hole in the deck
- All other aspects alleged by the tenant, including the alleged stormwater issue, are not proven for lack of any corroborating evidence. Alternatively, they are otherwise covered below.
- In terms of compensation for the breaches in point 54 above, given the length of the tenancy to date, I award the tenant $500 compensation. Was the landlord out of NZ for more than 21 consecutive days without appointing an agent?
- The tenant claims the landlord has been overseas for longer than the RTA permits without appointing an agent.
- A landlord who is out of New Zealand for longer than 21 consecutive days must ensure they have an agent in New Zealand. See section 16A(1) RTA.
- I find that the landlord was indeed in breach of this provision however I am not prepared to make are finding that any compensation be paid to the tenant much less any award of exemplary damages. The landlord was only away for a short period of time. He believed the tenant would not raise any issues within that time and there was no evidence that the tenant had tried to get in contact with him during that time and was unable to do so.
Was an insulation statement provided?
- A landlord must include a signed statement in the tenancy agreement that provides the following information: a. whether or not insulation is installed in any ceilings, walls and floors, and b. details of the location, type and condition of all insulation installed. See section 13A(1A) RTA.
- Alternatively, if the landlord is unable to provide some or all of the information required, they must include a statement explaining what information cannot be obtained, why it cannot be, and that all reasonable efforts have been made to do so. See section 13A(1B) and (1C) RTA.
- Breaching these obligations is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $750.00. See section 13(1F)(a) and Schedule 1A RTA.
- I find that the landlord did not comply with these obligations and has committed an unlawful act. There is a significant public interest in a landlord providing an insulation statement with a tenancy agreement. Tenants are entitled to know the level of insulation in a property.
- I award the tenant $500 by way of exemplary damages in relation to this aspect.
Was an insurance policy provided?
- The tenant claims the landlord has not provided a copy of the insurance policy for the premises.
- A tenant can request the landlord to provide a copy of any insurance policy which relates to the tenant’s liability for destruction of, or damage to, the premises. The landlord must provide a copy of the policy within a reasonable time. The landlord must notify the tenant of any changes to the information provided, or if the premises are no longer insured. See s 45(2B) and (2C) RTA.
- There is no evidence provided that the tenant had asked the landlord for an insurance policy.
- I dismiss this aspect of the claim. Install smoke alarms
- There have never been any smoke alarms in the property.
- The tenant’s first and second notices to remedy requested the smoke alarms to be fixed.
- This has never been fixed.
- The landlord accepts there were no smoke alarms installed in the house. He says he did not install them because the tenant always knew it was only a temporary agreement with a 14 days notice to terminate.
- It is wholly unsatisfactory for a landlord not to install smoke alarms into a premises, even if it was intended to only be temporary. The maximum amount of exemplary damages that can be awarded as $7,500. I award the tenant $5,000 in relation to this failure. I note that other awards are more moderate but I consider this to be a serious failure on the part of the landlord. Lack of extractor fans
- The premises had no extractor fan for the bathroom and the kitchen rangehood. This was not denied by the landlord.
- The tenant said this contributed to making a house feel damp.
- I make a finding that the landlord was in breach of the healthy homes ventilation standards by not having extractor fans.
- I find that the landlord has committed an unlawful act.
- It is a matter of public interest that landlords comply with the healthy home standards. I award the tenant $1,000 by way of exemplary damages. Should exemplary damages be ordered for the retaliatory notice and if so in what amount?
- Delivering a retaliatory notice as an unlawful act for which exemplary damages may be awarded up to a maximum of $6,500.
- In the circumstances of this case, I award the tenant $1,000 exemplary damages in relation to the retaliatory notice. I find it was likely to have been upsetting for the tenant to have received it. Remaining issues
- The tenant says the landlord failed to provide information as requested relating to whether the landlord had applied for resource consent.
- I am not satisfied that this amounts to a breach of the RTA. Market rent claim: Should the tribunal make an order that the rent exceeds market rent by a substantial amount?
- The tenant claims that the rent she is liable to pay is well above market rent. She produced a Tenancy Services print-out dated 23 November 2023 showing a lower market rent of $600 and an upper market rent of $688. A midway point would be $644 per week. The tenant is paying $700 per week for a three bedroom, one bathroom house. The house is about 100 square metres.
- Section 25 of the RTA provides: 25 Market rent (1) On an application made to it at any time by the tenant, the Tribunal may, in accordance with the succeeding provisions of this section, on being satisfied that the rent payable or to become payable for the tenancy exceeds the market rent by a substantial amount, make an order reducing the rent to an amount, to be specified in the order, that is in line with the market rent. .... (3)For the purposes of this Act, 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 Fisken & Associates Limited v Lecole and Lecole ([2023] NZDC 17698), the District Court recorded that the Tribunal must first determine what the market rent is, and then decide if the current rent would substantially exceed it. Step one is therefore to determine what the market rent is. The Court therefore stated: 2 That will require evidence. I recognise that truly independent evidence may not be available in a smaller district like Queenstown because the likely source of expertise is from real estate agents and property managers involved in the residential rental market who will generally act for landlords. However, rentals paid for comparative properties are objective facts which can be proven. It is only once a market rent is established that the Tribunal can decide whether the rent paid or payable exceeds it by a substantial amount. If it cannot be established an application under s 25 must fail. 2 At [29].
- The term 'substantial' is not defined in the RTA. Some of the older Tribunal cases have suggested a 'rule of thumb' of 10% over market rent. Other adjudicators have said that this is not a helpful guide 3 because where rents increase at a rate above inflation, rent will eventually assume a greater proportion of household incomes. This will in turn reduce the availability of income for other household expenditure. In these circumstances, it is arguable that even a relatively modest increase over market rent could have a substantial effect.
- The concept of 'market' rent is not completely unfettered. It is constrained by the requirement that both parties be 'willing', and that the rent meets their 'reasonable' expectations.
- Willing: The term ‘willing’ is not defined in the RTA. Relevant dictionary definitions include "having a ready will; disposed to consent or comply; ready to do (what is specified or implied) without reluctance" (Oxford English), and "done, borne or accepted by choice without reluctance ... of or relating to the will or power of choice" (Merriam Webster). Both dictionary definitions imply a readiness to do something without reluctance.
- Reasonable: This term is also not defined either. Dictionary definitions include "having sound judgement; sensible ... not asking for too much ... not extravagant or excessive; moderate" (Oxford English), and "not extreme or excessive ... moderate, fair" (Merriam-Webster).
- I consider that the Tribunal should have regard to (1) the general level of rent for comparable tenancies in the same or similar localities and (2) any other matter it considers relevant.
- Comparable rents: This usually involves comparing the premises to advertisements for similar premises in the locality. This approach has its limitations: although advertisements usually list the essential features of the property advertised (e.g. number of bedrooms, living rooms, bathrooms, garage etc.), there is often limited information to compare the relative quality and condition of the premises.
- In addition, the fact that a property is advertised at a particular rent does not necessarily mean the asking rent is 'market rent', even where a tenant signs an agreement to take the property for that amount. Section 25 RTA refers to the "rent payable or to become payable" exceeding market rent. So, a tenant could theoretically agree to pay an excessive rent, and then apply to reduce it in line with market rent.
- Tenancy Services statistics: It is also common for parties to refer to the 'market rent' statistics published by Tenancy Services. The tenant has indeed 3 For eg, see 4235532. referred to these statistics in support of her case. She says the market rent exceeds the higher of the bands, according to Tenancy Services. She produced no other evidence of market rent.
- The landlord says the market rent is $800 - $900 per week. He has no evidence supporting this. He simply says this is what the agents think.
- The landlord provided no corroborating evidence of that.
- Other adjudicators have warned that the information in Tenancy Services does have its limitations. Rents can vary within the broad areas listed, and it can be difficult to determine where a property sits in relation the other properties covered by the statistics (although they do include 'median' as well as 'lower quartile' and 'upper quartile' rents).
- There is also a potential problem if rents are fixed primarily by reference to the Tenancy Services market rent statistics, as this has the potential to create a ‘positive feedback loop’ in which landlords increase rents in response to what other landlords are doing without reference to what is objectively reasonable.
- Other relevant matters: The Tribunal may also consider “such other matters as [it] considers relevant” to market rent. There is very little case law about what can be considered. In Housing New Zealand v Hobman (DC Lower Hutt, TT89/97, 27 November 1997) the Court said the phrase must be considered “ejusdem generis” with the words that precede it, i.e., additional factors must be similar to the previously listed factors relating to market rent. In that case the Court found that the phrase did not allow the Tribunal to take into consideration the tenant's personal circumstances (especially as this is specifically prohibited).
- It is arguable that the phrase is intended to cover any anything relevant to the reasonable expectations of a willing landlord or tenant. This could include factors such as a reasonable return on investment, and the rate of increase in relation to the consumer price index. A 'proper return' on investment was a factor that Rent Appeal Boards could consider when setting an 'equitable rent' under the Rent Appeal Act 1973 (a predecessor of the RTA). Although that wording was not carried over to s 25 RTA, it arguably relevant to reasonable expectations.
- As noted, very little evidence was provided by the tenant in support of her claim as to what the market rent was. I find it inadequate evidence has been produced for me to confidently reach a decision about market rent for this property. As such, applying Fisken & Associates Limited v Lecole and Lecole, the claim must fail.
- For completion, even if I want to be satisfied that the market rent for this property was the midway point of the two bands that the tenant has put forward, I am not satisfied that the actual rent charged was substantially in excess of that amount. The amount charged is only just over the top band, and a mid way point would be around $644. The difference between that some and the amount the tenant is paying is only around 9% of $644.
- The tenant’s claim in relation to market rent is dismissed. Should the tenancy be terminated.
- The landlord has applied for termination of the tenancy for breach of the tenant’s obligations.
- In terms of the orders above, the landlord owes the tenant $8,000. The landlord has proven that as at the date of the hearing, the tenant owed the landlord $9,150 for rent. I direct the amount owed by the landlord to the tenant to be off set against the rent. The consequence is that the tenant owes the landlord $1,150 by way of unpaid rent.
Should the tenancy be terminated?
- The Tribunal may terminate a tenancy for breach where, due to the nature or extent of the breach, it would be inequitable to refuse to terminate. See section 56(1) Residential Tenancies Act 1986.
- Where the breach is capable of remedy the landlord must first serve a notice on the tenant requiring them to remedy the breach within at least 14 days and establish that the tenant has failed to do so.
- The tenant has breached her obligations by failing to comply with the landlord’s 14 days notice to pay rent, issued on 21 September 2023.
- It would be inequitable to refuse to terminate the tenancy in this instance. The arrears have been ongoing since the landlord filed the application, after the tenant simply stopped all rent payments. The tenant took a risk in simply stopping her weekly rent payments in full, leaving herself in this very situation she now faces where she has not succeeded in winning a greater amount than the rent owing.
- The tenancy being terminated there is no need for any work orders, with the exception that the landlord must immediately install smoke alarms at the property whilst the tenants remain living there. Until those smoke alarms are installed the tenant will be entitled to a further $300 per week until the end of the tenancy.
- Both parties have won or lost aspects of their claim and there is no order for refund of the filing fee.