Published tribunal order
Tenancy Tribunal case 4659551 — Rent arrears at 26 Chambers Street, North East Valley, Dunedin 9010
Decided 21 Sept 2023 · Published 21 Sept 2023 · Application 4659551
- Rent arrears
Party names are redacted in the official published order.
Order
- An application for suppression has been made in this case, and the Tribunal orders suppression of the Landlord name and identifying details.
- Meleana Veikoso must immediately pay the landlord rent arrears of $1,148.11 to 19/9/2023.
- Liliana Lim Cheung must immediately pay the landlord rent arrears of $1,163.38 to 19/9/2023.
- Meleana Veikoso, Liliana Lim Cheung, Eva Lloyd, Madison Buchan, Ella Sneddon and Kalisi Liaveti-Waqa must pay [The landlord/s] $20.44 immediately, being the filing fee.
- The application for a reduction in the term of the fixed term tenancy is dismissed.
Reasons
- All parties attended the hearing.
- The landlord has applied for rent arrears.
- The evening before the hearing the tenant filed an application for reduction of the term of the fixed term tenancy on the grounds of financial hardship.
- Although the landlord was not aware of what the tenants’ application was about agreement was reached that both applications could be heard together to avoid an adjournment.
- The tenancy agreement was for a fixed term from 1/1/2023 to 31/12/2023 at $1,100.00 rent per week.
Do the tenants owe rent arrears?
- The landlord claimed arrears of $2,311.49 to 19/9/2023.
- Although the landlord considered the tenants jointly and severally liable under the terms of the tenancy agreement, she was agreeable to individual orders being made against the two tenants who were in arrears.
- Liliana Cheung agreed she owed $1,163.38
- Meleana Veikoso agreed she owed the balance of $1,148.11.
- Separate orders have been made against the two tenants who owe arrears.
Should the term of the tenancy be reduced?
- The usual legal position with a fixed-term contract is that the term of the contract will be applied strictly, and it is only in limited circumstances that a court or tribunal will interfere with it. For residential tenancies, one of those circumstances is found in section 66 Residential Tenancies Act 1986, which allows for the reduction of fixed term tenancy agreements.
- There is a high threshold to be met before the Tribunal will reduce the term. In particular the applicant will need to establish that: a. there has been a change in their circumstances b. the change was unforeseen c. the unforeseen change will result in severe hardship to the applicant if the tenancy is not reduced d. the severe hardship the applicant will suffer if the term is not reduced exceeds the hardship the other party will suffer if the term is reduced.
- Section 66(2) provides that, if the Tribunal reduces the term of the tenancy, it may order the applicant to pay reasonable compensation to the other party for any loss or damage which results from the reduction of the term.
- The Tribunal has held that it cannot reduce the term of a fixed-term tenancy on the application of one of several co-tenants (Derbyshire v Mark & Maggies Property Company Ltd Wellington [2013] NZTT 1477WN).
- The weighing of relative hardship is a question of fact to be assessed objectively in each case.
- In Bond v Tang Invercargill TT09/583IN the Tribunal discussed that section 66 was used to seek a balance between the competing interests of applicant tenants, for whom significant obligations under fixed-term agreements can create hardship when circumstances unexpectedly turn against them and landlords who have financial expectations arising from the same bargain. Has there been an unforeseen change in the tenant’s circumstances?
- Unfortunate as it may be for the tenants, I find the evidence does not establish there has been an unforeseen change in their circumstances.
- In their submissions the tenants relied on being unable to pay the extra rent not being paid by two of the tenants, as their reason for wanting the term reduced.
- In addition, the tenants suggested that two of the tenants had been in the premises in 2022 and there had been arrears of rent then which they were not told about.
- Further three of the tenants submitted that they believed the tenancy was for individual rooms and they were only liable for their own rent.
- However, the other three tenants confirmed their understanding was that the tenancy agreement was for a joint and several tenancy.
- On the other hand, the landlord disputed that there were rent arrears from the 2022 tenancy, which the two tenants involved then also confirmed.
- By itself the fact that the tenants cannot afford the rent for those tenants who are not paying is not an unforeseen change in circumstances.
- This is not a situation where circumstances have unexpectedly turned against the tenants.
- Rather it is an issue between tenants and not within the jurisdiction of the Tribunal which deals only with disputes between landlords and tenants.
- Moreover, I am not persuaded by the evidence of three of the tenants that the tenancy was signed up as being for room by room. Had this been the case the premises would meet the definition of a boarding house and different legislative criteria would apply.
- Clause 10 of the additional terms and conditions of the tenancy agreement clearly states that all tenants are jointly and severally liable for the full rental payable under the agreement and any other breaches.
- The tenants indicated that they had read the agreement before signing it.
- The landlord did not want the fixed term reduced.
- The claim by the tenants for a reduction in the term fails.
- As [The Landlord] has wholly succeeded with the claim I must award the filing fee.
- Suppression is granted to the landlord because they were successful with the claim.
- No suppression is available to the tenants.