What was Tenancy Tribunal case 4727413 about?

This case concerned a leaks dispute.

How much money was awarded in case 4727413?

Verified claim lines are listed on this page.

Where can I read the official tribunal order for case 4727413?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9994403-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4727413 about?

This case concerned a leaks dispute.

How much money was awarded in case 4727413?

Verified claim lines are listed on this page.

Where can I read the official tribunal order for case 4727413?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9994403-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4727413 — Leaks

Reasons

Both parties attended the hearing.
The Tenant applied for a work order and reduction of rent.
The Landlord consented to repair the leak to the ceiling in the lounge and above the stairs by May 2024. Background
This was a periodic tenancy that started on 19 August 2019. The property comprised one living room, two bathrooms, four bedrooms, an ensuite and off street parking. There was no garage.
The rent was initially $1400.00 in 2019 which increased to $1600.00 per week in 2021. In August 2023, the landlord issued a notice to increase the rent to $1770.00 per week. Due to an error in the notice, the Tenant’s did not accept the rent increase. The Landlord issued a new notice in October 2023 informing the Tenants, they could pay $1770.00 from the date in the August notice or pay $1800.00 per week from the new correct date.

What is the market rent?

The Tenant submitted rent of $1800.00 per week was well above the market rate in rent. They filed photographs of the property which showed standard wear and tear with the kitchen paint coming off the cabinetry, a damaged fence, a leak in the ceiling and pailings on the bedroom deck protruding. They also referred to the Tenancy services market rent for properties in [suburb] which indicated the upper quartile median rent for a four-bedroom was $1338.00. I did not receive any evidence of this Tenancy Services information.
The Tenant produced three advertisements of comparable properties and included photographs of all of the rooms as follows: a) [Property 1] was a townhouse with three bathrooms, two living rooms, double garage and with more modern features renting at $1800.00 per week; b) [Property 2] had four bedrooms, two bathrooms and one double garage renting at $1450.00 per week. This appeared to be a townhouse; c) [Property 3] had three bathrooms, 4 bedrooms and double garage at $1500.00 per week. This had new carpet and was freshly painted.
The Tenant also produced three appraisals from senior property managers and they estimated the weekly rent to be between $1450-1600.00 per week.
The Tenant submitted these were comparable properties. The [Property 1] had much better amenities than the property. [Properties 2 and 3] had rental prices which sat above [suburb] however no evidence was provided to substantiate this. They submitted that the [Property 2] property also had double garage and [The tenancy property] had a single garage. This property had no garage and only two bathrooms.
The Landlord submitted the rent increase was fair and not substantially more than the market rent. They deposed the repairs to the property were cosmetic. They had been landlords for 23 years and this was the first time they had come before the Tribunal. They rely on the Tenants notifications of repairs and were not aware of the inadequate repairs to the fence. When they set the rent increase they considered a number of factors including the cost of living, increase in inflation and increase in their insurance and mortgage interest.
They submitted there was a 17.2 increase in average rents. They reviewed the market at the time and the general CPI in 2023 was $1820.33. The median weekly rent from September 2021 to September 2023 was $1875.00 for this area as recorded from ‘Figure NZ’.
The Landlord submitted the properties shown by the Tenant were in different suburbs and were not villas. This property was a villa which typically rent out at premium prices. It was close to all amenities such as shopping, restaurant and public transport.
They produced six advertisements of villas however only the profile photo of the exterior of the villas were shown. The interior photographs were too small to see: a) [Property 4] had four bedrooms, two bathrooms and two garage park and rented for $2200.00; b) [Property 5] had four bedrooms, three bathrooms and two living areas and rented for $2400.00; c) [Property 6] had four bedrooms, three bathrooms, 1 off street parking and rented for $1600.00; d) [Property 7] had four bedrooms, three bathrooms, two off street parking and rented for $1750.00; e) [Property 8] had four bedrooms, two bathrooms and rented for $2250.00; f) [Property 9] had four bedrooms and two bathrooms rented at $2100.00.
A snapshot of the tenancy services website on 6 November 2023 showed the upper quartile rent was $1763.00 for a four bedroom in [Ponsonby]. The law
In assessing market rent, Sections 25(1) and (3) Residential Tenancies Act 1986 provide: (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 the case of a fixed term tenancy, any application must be filed no later than 3 months after the start of the tenancy or the last rent review (see s 25(2) RTA).
The tenant must prove on the balance of probabilities that the rent exceeds market rent by a “substantial amount”. The term 'substantial' is not defined in the RTA, but it is the opposite of ‘minor’ or ‘insignificant’. Some earlier Tribunal cases suggested a 'rule of thumb' of 10% over market rent. However, a rule of thumb based on a specific percentage has no legal status and is not appropriate where rents rise at a rate significantly above income inflation.
The test for market rent is the amount “a willing landlord might reasonably expect to receive and a willing tenant might reasonably expect to pay for the tenancy”.
The concept of the 'market' is constrained by the requirement that both parties be 'willing', and that the rent meets their 'reasonable' expectations. These terms are not defined by the Act. The Oxford English dictionary defines willing as: "having a ready will; disposed to consent or comply; ready to do (what is specified or implied) without reluctance"; and reasonable as "having sound judgement; sensible ... not asking for too much ... not extravagant or excessive; moderate".
The factors the Tribunal may have regard to are “the general level of rents ... for comparable tenancies of comparable premises in the locality or in similar localities and such other matters as the Tribunal considers relevant”.
The evidence for comparable rents is usually based on advertisements for similar premises in the locality. This evidence has its limitations. Although advertisements usually list the essential features of the property advertised, there is often limited qualitative information available for comparison. Also, advertisements only cover houses currently on the market and do not necessarily reflect the overall level of rents charged for existing similar tenancies in the area.
It is also common for parties to refer to the 'market rent' statistics published by Tenancy Services. These statistics cover the rents charged for tenancies where bonds have been lodged over the preceding 6 months. The statistics include median rent as well as upper and lower quartile.
The Tribunal may also consider “such other matters as [it] considers relevant” to market rent. In Housing New Zealand v Hobman (DC Lower Hutt, TT89/97, 27 November 1997) the Court said the other factors to be considered must be of the same kind as the preceding specified factors. It is arguable however that the term ‘other matters’ is broad enough to cover any anything relevant to the ‘reasonable’ expectations of a ‘willing’ landlord or tenant.
Section 25(4) RTA provides that a market rent order may not take effect any earlier than the date of the application or any later than 30 days after the date of the order. The order may last for up to 6 months in the case of a periodic tenancy, or for such shorter period the Tribunal specifies. In the case of a fixed term tenancy, the order remains in force for the period specified in the order. Analysis
In considering the Tenants evidence, the advertisements provided were of townhouses in neighbouring suburbs with similar room numbers. Most had a garage which this property did not have. The more modern townhouse was priced at the higher end of $1800.00. The difficulty with these properties is that they were not villas which may have been why they were lower in rent.
The appraisals provided however reinforced the Tenants submissions that the market rent was around $1500.00. There was wear and tear at the property and however there had been no improvements to the property since the last rent increase.
The Landlord’s evidence showed villas in the same suburb and neighbouring suburbs which sat around $2,000.00. The inability to see the interior of these properties was a hindering factor when comparing because the higher price may have been due to better-quality furnishings or recent renovations. It was difficult to compare without being able to see photographs of the interior. The Landlord’s appraisal was not given as much weight given it was based upon photographs rather than a physical viewing of the property.
In considering the evidence, I find it more likely than not that the market rent is $1800.00 per week. Both parties had convincing evidence however, the Tenants evidence was of advertisements for townhouses not villas in neighbouring suburbs. The three rental appraisals were more persuasive. The Landlord produced more comparable properties which were villas with similar configurations in neighbouring suburbs however it was difficult to compare the interiors. Whilst the Landlord’s rent appraisal was not as persuasive because it was based on photographs, I am persuaded by the statistics provided for the CPI, the NZ figures showing the increase in median rent for the area and the fact that the $1800.00 rental figure sits close to the higher quartile of median rents.
The Landlord has sought to increase the rent to $1800.00 per week. As the market rent is $1800.00, I find this increase is reasonable.
The Tenants application is dismissed in terms of opposing the increase in rent.
As the Landlord has been successful, name suppression is granted to the Landlord. As the Tenant has not been successful, name suppression is not granted to the Tenant.

Tenancy Tribunal case 4727413 — Leaks

At a glance

Tenancy Tribunal case 4727413 — Leaks

At a glance

Claims & awards

Reasons

What is the market rent?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Reasons

What is the market rent?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions