Published tribunal order
Tenancy Tribunal case 4650050 — Rent arrears
Decided 20 Dec 2023 · Published 20 Dec 2023 · Application 4650050
- Rent arrears
Party names are redacted in the official published order.
Order
- [The tenant/s] must pay [The landlord/s] $3,400.00 from the bond, based on the following table:
- The Bond Centre is to pay the bond ([Bond number suppressed]) of $3,400 in the following proportions: $3,100 to [The landlord/s] $300 to [The tenant/s]
- All other claims are dismissed.
Reasons
- These proceedings relate to a fixed term tenancy that ended when the landlord, being [The landlord/s], sold the property. Issues have arisen due to the way the property was marketed for sale.
- The landlord initially applied to the Tribunal for rent arrears for the last weeks of the tenancy as the tenants stopped paying rent when they moved out early in May 1 .
- The tenants then submitted a cross application as they consider their quiet enjoyment of the tenancy was impinged upon by the landlord’s sale process and say there were times when agents of the landlord entered the property without consent or notice. They seek compensation and exemplary damages for these breaches of the Residential Tenancies Act 1986 (RTA) as follows: • $1,900 for over paid rent and unlawful breach of quiet enjoyment. • $800 for unlawful entry by the landlord’s agent. • $1000 for interference with their privacy.
- The questions therefore for the Tribunal are as follows: a. Did the sale process infringe the tenants’ entitlements/rights? b. If so, should they be compensated for those breaches? c. Are the tenants liable for rent until the end of the fixed term tenancy?
- I discuss each claim separately below. However, firstly I note that each applicant, has the burden of proof placed on them to prove their claim to the required standard. This means they cannot just allege something; they must adduce evidence to persuade me that their version of events is the correct one. The standard is the civil standard of the “balance of probabilities” or what is “more likely than not”.
- I have not referred to all of the evidence submitted in this decision for brevity reasons, however the parties can be assured it has all be considered. I also apologise for the delay in issuing this decision and thank the parties for their patience.
How did the sale process affect the tenants?
1 The fixed term tenancy was contracted to end on 26 June 2023
- [The tenant/s] submit that the sale process breached their rights pursuant to sections 38 and 48 of the RTA. In particular, they claim the landlord’s agent has entered the premises without consent or notice 2 on the following occasions: a. The gardener entered the garden on 4 February unannounced. This put him in a position whereby he was able to see the tenants in their bedroom. They felt violated by this. b. On 9 February [The tenant/s] was at home in a meeting when the real estate agent let himself into the house with several others and then into her bedroom. She says this gave her a considerable fright as she was not aware he had a key. Subsequently they felt in fear that anyone could enter at any time.
- [The landlord/s]’ evidence in response is as follows: a. The gardener attended the home on his own volition without their or the agent’s permission. b. The agent ([The real estate agent]) had pre-notified of his attendance. He did knock but when there was no answer, let himself in but did not come into the bedroom.
- [The real estate agent] submitted a written statement confirming he had pre- arranged the visit with the tenants on 9 February. He messaged the day prior and when he was on his way. He knocked and waited but when no one answered let himself in and called out. At that point [The tenant/s] came walking through and he immediately apologised for letting himself in.
- He also says he had not authorised the gardener to attend and has raised the issue with him now. He also took up the concerns about the staging (discussed below) with the company, but he considers they have an impeccable reputation.
- [The tenant/s] also submit the following instances of their quiet enjoyment 3 being breached: a. Being asked to clean the home before staging photos were taken. b. Invasive staging including 42 pillows, magazines spread over tables, fake plants and art on the wall, and beds covered with duvets, pillows and spreads. c. The stagers requested they remove their personal items from their home, and that they live with the staged items. They also removed the tenants’ belongings, putting them in drawers or cupboards or piling them on the floor. d. Stagers went into their private areas such as bedside drawers. 2 In breach of section 48 RTA 3 In breach of section 38 RTA e. A lock box was installed without them being told it would which lent them to feel they could be invaded at any time. f. The agent did not keep to the agreed schedule and so they had to extensively engage with the agent regarding viewings. g. Further viewings after held after they had been told they would be stopped. h. Their lives with two young children and a dog were not respected whilst the sale process was undertaken as that was given priority. i. [The landlord/s] scheduled an open home at Easter in a punitive action given they had refused an open home the week prior. They felt pressured into agreeing. j. Essentially, they were not respected throughout the process.
- The landlord’s evidence in response is: a. The house was on the market for nine weeks only and not staged the entire time. They had expected the process to only be six weeks as they had a five-week deadline sale process but it had to be extended. b. They negotiated with the tenants as to how the property would be staged. c. They offered them the use of their house for storage or for a place to go during viewings. d. The viewings were only ever of 15 minutes duration and the open homes 45 minutes. e. They gave them a $200 rent reduction to compensate for the inconvenience during the initial six-week process and then a further $50 per week rent reduction for the second stage despite the intrusion being minimal by then. f. When the purchaser wanted an earlier settlement date, they asked the tenants who refused and so they accorded the settlement date with the end of their tenancy. g. The Easter open home was not punitive action but an important part of the sales process as they had just lowered the price. h. No viewings were ever undertaken when there was not agreement by the tenants, and they did their best to work around their needs. i. They had no intention to breach the tenants’ quiet enjoyment and if it ever was, they cannot be responsible for the agents or stager’s behaviour.
- The landlords submit that they did everything they could to make this process as unintrusive on the tenants as possible. They did not want to sell the property but for personal reasons had to. They gave them approximately six months’ notice and yet the tenants moved out of the property early and did not abide by the fixed term contract. The law
- A tenant is entitled to have quiet enjoyment of the premises without interruption by the landlord or by any agent of the landlord; see section 38(1) RTA. Section 38(1) is a broad statement and codifies the common law standard of a right to have quiet enjoyment of the premises without interruption. 1986.
- Breaching this obligation in circumstances that amount to harassment is an unlawful act for which exemplary damages may be awarded up to a maximum of $3,000.00. See section 38(3) and Schedule 1A RTA.
- Harassment means "to trouble, worry or distress" or "to wear out, tire, or exhaust" and "indicates a particular pattern of behaviour directed towards another person". MacDonald v Dodds, CIV-2009-019-001524, DC Hamilton, 26 February 2010.
- However, while s38(2) states that the landlord must not cause any interference, the duty is modified by the degree of interference being to the “reasonable peace, comfort or privacy” of the tenant.
- The word 'privacy' in section 38(2) RTA does not mean privacy in the sense of the Privacy Act 1993. The purpose of the section is to ensure tenants are free from unwarranted or undue intrusion or disturbance in their private lives while living at their home.
- A temporary discomfort or inconvenience does not constitute a basis for breach of the covenant. There are several circumstances, as with this case, where the landlord’s rights (such as to sell their property) are inconsistent with the tenant’s right to quiet enjoyment. In those cases, it is a balancing act to determine the level of intrusion or nuisance that a tenant can reasonably expect to endure. The landlord is entitled to sell their house, but those actions can quickly breach reasonable peace, comfort and privacy if they are not well managed. Whether the interference complained of breaches the quiet enjoyment covenant is a question of reasonableness having regard to all the circumstances, including prior knowledge of the process, and the length and degree of intrusion.
- Further, section 48 RTA is relevant in this case and sets out the specific notice a landlord is required to give a tenant in order to enter the premises in different situations unless the tenant consents. A landlord is entitled to enter a premise with consent for the purposes of marketing a house.
- Importantly however, the reference to “premises” in section 48 does not include land. Therefore, the notice provisions in section 48 do not apply when the landlord or their agent is simply entering the land. However, even when entering the premises including the land legitimately, a landlord must still be careful not to breach the covenants for quiet enjoyment contained in sections 38(1) and (2) RTA.
- Finally, a landlord owner is responsible for any person they allow to access the premise. This includes real estate agents and gardeners. This is because the definition of a landlord in section 2 of the RTA includes their agents. Discussion
- Sales processes are hard. There are the competing rights of the landlord on the one hand to sell their property and the tenant on the other to enjoy their home. However, if a landlord chooses to market their house with tenants in situ, then they cannot expect to have it perfectly presented for each viewing or intend to present it as they would a vacant home. They must understand that they are not only marketing their asset, but also another person’s home.
- Having assessed the situation carefully here, I make the following findings: a. As the gardener did not access the inside of the home, there has been no breach of s48 with this action. However, his unannounced visit on a weekend was a breach of s38. b. [The real estate agent]’s visit was previously agreed and should have been expected by [The tenant/s]. He was entitled to let himself in given the time had been agreed and legally notified. [The tenant/s] was aware the agent was coming around at that time, therefore it was reasonable to expect they would let themselves in and she needed to take precautions, such as leaving a note, before she entered her meeting. This was not a breach of s48 of the RTA. c. I consider it a breach of a tenant’s quiet enjoyment to require them to move their belongings and/or staging items to make the house look more ‘saleable’. These requests were made of these tenants but when they quite rightfully refused, negotiations were had. d. I also consider it a breach to expect them to clean extensively prior to each open home, particularly if there are a number. Again, this request was made, and [The tenant/s] did so for the photos. However, they were not expected by the landlord to extensively clean for every viewing. e. I consider it a further breach to move a tenant’s items into drawers; this is an invasion of their privacy. I accept the evidence that the stagers did this. f. More than two viewings/open homes per week I consider excessive when a marketed property is tenanted. This happened on three of the nine weeks. g. These breaches are exacerbated if the tenants have children and animals, as they did here. I consider the particular requests here of the tenants to accommodate this process given their family arrangements were excessive. h. [The landlord/s] were responsible to ensure that [The real estate agent] and anyone else authorised to attend the house for the process, did so in a way that did not impinge the tenants’ privacy. In this respect they should at least have been a party to the tenants’ WhatsApp group with [The real estate agent] as they are the ones who owe a duty of care to the tenants.
- Accordingly, I find that [The landlord/s] have breached section 38 of the RTA in the way their property was marketed. However, I do not consider their actions amount to a finding of harassment, and as such an award of exemplary damages is not available.
Should the tenants be compensated?
- [The landlord/s] were aware this process would pose an inconvenience to the tenants and as such reduced the rent for the period. The rent was reduced by $200 per week (from $850) between February 3 rd and March 3 rd and by $50 per week between March 3 rd and April 28 th . I consider these amounts appropriate and relative to the inconvenience [The tenant/s] and their children experienced. Accordingly, the claim for a rent refund over and above this amount is dismissed.
- [The tenant/s] also seek compensation for the stress they suffered due to this process.
- The Tribunal does have the authority to award damages for stress and inconvenience. It does so on the basis that the law of contract allows such damages where the purpose or one of the purposes of the contract is the peace and comfort of the party and, in the case of a tenant, that is regarded as one of the purposes of a tenancy agreement.
- Nevertheless, it is not something that the Tribunal does lightly. The normal rules for damages apply and the tenant must prove breach of an obligation or right, damage, that the damage was foreseeable and that an amount of damages is appropriate.
- As a starting point the Tribunal adopts the position that a tenancy agreement involves a relationship: relationships are rarely smooth, and a tenant must expect some disruption or inconvenience from to time to time. Inevitably there is likely to be disruption when a tenancy approaches its end, even if both parties act entirely lawfully.
- Considering the level of damages to award, it is well established that where the loss suffered is intangible, awards must be kept modest. Some degree of anxiety and stress has been considered an inevitable corollary to rights based on promises, and a contracting party has traditionally been deemed to take the risk. Virtually any breach brings with it some degree of disappointment and upset, and almost every action could give rise to a claim for intangible loss. It is very difficult to put a price on an intangible, when it is not open to mathematical calculation, and requires some degree of subjective assessment and impression.
- In Tenant v Singh (2022) NZTT 4315225 the Tribunal refers to the decision in Nice Place Property v Ogbourne and Couzens (2017) NZTT 4046775 in setting out the appropriate bands where making awards for emotional harm damages. As follows: “A. At the lower end of the scale, where a breach causes inconvenience, frustration, annoyance, or disappointment: an award of $200.00 to $1,000.00. B. Where due to the breach the party has endured more inconvenience and a higher level of mental distress such as worry, stress, tension, or anxiety: an award of $1,000.00 to $2,000.00. C. At the upper end of the scale, where the party has experienced hardship, insecurity, humiliation, intimidation, aggravation, or fear: an award of $2,000.00 and upwards.”
- Having considered this situation, I find that an award of $300 is justified in the circumstances. This is a low award as I consider that for the most part [The landlord/s] tried very hard to minimise the impact of the process. I do accept the stressful impact on the tenants however of the excessive requests, stagers’ activities and gardener’s attendance.
Are the tenants required to pay the rent arrears?
- The tenants submit that they were forced to vacate the property to protect themselves from an unsafe environment. I do not accept this as the property sale had gone through by this stage, and the main motivator in terms of timing for them was their purchase of a home. They had been offered several weeks prior to end the tenancy early but at that stage they did not wish to, so it continued.
- This was a fixed term tenancy; therefore, the tenants were required to pay rent until the end of the term. At no point had an earlier end to the tenancy been agreed, nor had the tenants applied to the Tribunal to end the tenancy early. Accordingly, the landlord’s claim for rent arrears is upheld. Filing fee & suppression
- As both parties have been partially successful in their applications it is not appropriate to award reimbursement of the filing fee to either party and those costs should lie where they fall.
- 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. This includes being successful in their application or in their defence to an application. As both parties have been successful to an extent, I approve both applications for suppression.