What was the outcome of Tenancy Tribunal case 4734257?

The tribunal order states: No application for suppression has been made in this case and no suppression

How much money was awarded in case 4734257?

Orders Apply Around Publication Of T…: $360.00 awarded to landlord

What type of tenancy dispute was case 4734257?

The primary dispute was Rent arrears. Related themes: Boarding House.

Where can I read the official tribunal order for case 4734257?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10673372-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4734257?

The tribunal order states: No application for suppression has been made in this case and no suppression

How much money was awarded in case 4734257?

Orders Apply Around Publication Of T…: $360.00 awarded to landlord

What type of tenancy dispute was case 4734257?

The primary dispute was Rent arrears. Related themes: Boarding House.

Where can I read the official tribunal order for case 4734257?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10673372-Tribunal_Order.pdf.

Unit/Flats 1, 2, 4, 5, 6, 9, 10, 11, 12, 14, 6-8 Campbell St, Tenancy Tribunal Case 4734257 — Rent arrears

Claims and awards in Tenancy Tribunal application 4734257. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
orders apply around publication of this decision. 2. The market rent for each of the two-bedroom units in these applicat	$360.00		orders apply around publication of this decision. 2. The market rent for each of the two-bedroom units in these applicat

Claims and awards in Tenancy Tribunal application 4734257. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
orders apply around publication of this decision. 2. The market rent for each of the two-bedroom units in these applicat	$360.00		orders apply around publication of this decision. 2. The market rent for each of the two-bedroom units in these applicat

Order

No application for suppression has been made in this case and no suppression orders apply around publication of this decision.
The market rent for each of the two-bedroom units in these applications is set at $360.00 per week, effective from 1 November 2023. This rate shall continue in force for 6 months from the date of this order.

Reasons

The tenants applied for an order clarifying the interplay of sections 24(1)(e) and 26 of the Residential Tenancies Act 1986 (“RTA”), as these sections related to how often a landlord could increase rent, after the Tribunal had made a market rent order pursuant to section 26 RTA to apply for a specified period, and for market rent assessments. The landlord cross applied in a representative claim against one tenant for rent arrears. The history of proceedings between these parties is set out below.
A hearing was convened in Wairoa on 19 December 2023 in relation to the tenants’ applications about the juxtaposition of sections 24(1)(e) and 26 RTA. Following this hearing, the Tribunal made an order dated 31 January 2024, which is set out below in paragraph 12, and adjourned the hearing for the market rent assessment claims.
The hearing in relation to the market rent assessment claims was held in Wairoa on 30 April 2024.
The tenants who attended the hearing on 30 April 2024 were Stuart Brown, Jock Crarer, Rhona Johnston, Emma Greenwood, Sally Lloyd, Dianne McRoberts and Mr Spooner. Other tenants did not attend the hearing but were represented by Mr Olsen. Peke Michaesen had passed away after her application was made but Mr Olsen said her family and estate wanted her application to be heard. Mr Olsen advised that Joyce Russell was living in a care home at the time of the hearing but also wished to have her application heard. For clarity, Mr Olsen did not withdraw any of the applications filed by the tenants. As such, this decision applies to all applications filed by the tenants.
Mr Faulkner and Ms Wanoa both attended the hearing on behalf of the landlord, as did the property owner, Mr Rivers.
The Tribunal must consider 10 applications filed by 12 tenants against the landlord in relation to a market rent assessment.
At the hearing, the landlord withdrew their claim for rent arrears against Mrs Greenwood. Background Previous related proceedings between the parties
The units were the subject of earlier market rent claims made by these and other tenants. The Tribunal made an order dated 14 November 2022 in relation to these earlier claims, where the market rent for each of the two-bedroom units was set at $300.00 per week, effective from the effective rent increase date already advised to each tenant by the landlord, to continue in force for 6 months from the date of the order.
The Tribunal’s order dated 14 November 2022 was appealed to the District Court by the landlord. A reserved judgment of Judge WP Cathcart was issued on 2 October 2023, where the Court dismissed the appeal and said a substantive judgment was to follow. The substantive judgment was issued on 18 June 2024 by the District Court.
It is helpful here to set out earlier decisions made by the Tribunal in relation to these current proceedings. Earlier Tribunal Orders relating to these proceedings
After these applications were filed, the parties reached an interim agreement that all tenants would pay $330.00 per week, apart from Ms McRoberts who would pay $340.00 per week rent, until the market rent applications were determined. The Tribunal reflected this agreement in an Interim Order dated 24 November 2023.
After the hearing in Wairoa on 19 December 2023, the Tribunal issued a decision dated 31 January 2024 ordering the following: a. Declaring the landlord’s notice of 5 April 2023 to the tenants was an unlawful rent increase notice, and was of no effect. b. Ordering the landlord to reimburse the applicant tenants, with the exception of Ms McRoberts, any amount paid by the tenants for rent above $300.00 until 11 November 2023. That reimbursement was to be made within 5 working days of the date of the order. c. Modifying the stay in the Tribunal’s order dated 24 November 2023, such that the rent to be paid by all the tenants, except Ms McRoberts, from 24 November 2023, was to be $330.00 per week, pending the Tribunal determining the market rent applications. The rent to be paid by Ms McRoberts from 24 November 2023 was to be $340.00 per week, until the Tribunal determined her application. d. In their order of 31 January 2024, the Tribunal adjourned the market rent applications and the landlord’s application for rent arrears to a further hearing, which was held on 30 April 2024.
In an order dated 1 May 2024, the Tribunal reserved this market rent decision until the substantive judgment of the appeal to the District Court, from Judge WP Cathcart, was released, and provided directions for the filing of final written submissions by the parties after the decision was released. This was to allow the Tribunal the ability to consider any points made by the District Court in relation to market rent assessments and to permit the parties to respond to the District Court judgment also.
The District Court decision of Judge WP Cathcart was issued on 18 June 2024. Current market rent claims
The units involved are all two-bedroom units, comprising one bathroom, kitchen, lounge and garage.
The units form part of a complex in central Wairoa and are mostly tenanted by pensioners. The Tribunal undertook a site visit in earlier proceedings.
These applications relate to market rent for each unit from 1 November 2023.
All the tenants in these applications, apart from Ms McRoberts, had been paying $300.00 per week rent due to the Tribunal’s order dated 14 November 2022, when they were notified by the landlord about further rent increases. In notices dated from 23 October 2023 through to 23 November 2023, the tenants were notified of rent increases ranging from $375.00 to $382.00 per week. Evidence Tenants’ evidence
In relation to the market rent claims, the Tribunal heard and considered evidence provided by the tenant’s representative, Mr Olsen, of Tenancy Services Bond data for Wairoa for two-bedroom units for 1 April 2023 to 30 September 2023, as indicated below. Mr Olsen also put forward Bond Data for average weekly rents for what he considered comparable socio-economic areas to Wairoa, as follows: Lower quartileMedianUpper quartile Wairoa361.00373.00384.00 Westport South 291.00335.00353.00 Westport North 284.00308.00330.00 Taumarunui Central 310.00350.00400.00 Moerewa325.00413.00481.00
Mr Olsen did not consider the Wairoa Tenancy Services Bond Data to accurately reflect what a reasonable market rent for Wairoa should be, as he believed Property Brokers, with its monopoly within Wairoa, had been increasing rent for tenants in Wairoa, thus artificially driving up rent prices.
Mr Olsen provided an affidavit from another landlord in Wairoa, P Mucalo, who also rented out his two-bedroom unit for $250.00 per week. There were no photographs or other information provided by the tenants about Mr Mucalo’s two- bedroom unit, to indicate how comparable they might be to the units in question in the applications, however.
Mr Olsen submitted that nothing had changed materially since the Tribunal order setting market rents at $300.00 per week, not the condition of the units, the tenants’ incomes and he doubted the landlord’s costs had increased. However, he acknowledged that the tenants could live with a rent increase of up to 10%. Landlord’s evidence
Mr Faulkner initially provided a report dated 14 December 2023, referring to the Tenancy Services Bond Data for Wairoa, a REINZ Residential Rent Review for October 2023, rent data from Trade me, and rent prices of other properties let out by Property Brokers in Wairoa.
During the hearing, Mr Faulkner referred to Tenancy Services Bond Data for Wairoa for the period 1 September 2023 to 29 February 2024 with market rent at $350.00 per week for lower quartile properties, $386.00 per week for median rents and $450.00 per week for upper quartile properties.
Just prior to the hearing on 30 April 2024, the landlord provided a valuation report from Lewis Wright in relation to a retrospective market rental assessment, and retrospective valuation date of 1 November 2023, for units 1, 6 & 12 at 6 Campbell Street, Wairoa. The author of this report, Che Whitaker, visited the properties on 23 February 2024. Mr Whitaker’s ‘adopted rent’ for unit 1 was $370.00 per week, for unit 6 was $360.00 per week and for unit 12 was $350.00 per week. This excluded any allowance for general service (yard/lawns, security, refuse), furniture and/or utilities. These ‘adopted rents’ were based on a 12- month fixed tenancy period. The report considered the individual circumstances of the units assessed, along with any damage, potential repairs or replacements that could be required for that unit, and its location within the complex and proximity or otherwise to the main road. The report included comments about the condition of the complex and grounds and common improvements.
Mr Whitaker commented that the basic structure of the units appeared to be in good condition, that the units were built between 1979/1984 to a good quality, higher specification standard, although mainly original with some maintenance and upgrading now required, which he itemised in relation to each unit he assessed. He said further that the grounds were well-maintained and presented.
The Lewis Wright report also summarised the Wairoa population, economy and local rental market, also citing increased demand for rental properties, given the impact of Cyclones Hale and Gabrielle in the local area, amongst other factors.
Mr Olsen responded to the Lewis Wright report, saying there was no information about Mr Whitaker’s expertise in rental matters, there was no reference in the report to the Tribunal’s order dated 14 November 2022 setting the rents at $300.00 per week, he was not aware of the instructions provided to Lewis Wright by the landlord, and that the ‘adopted rents’ were based on a 12-month fixed tenancy, whereas the tenancies in question are all periodic tenancies, amongst other points. The landlord chose not to call Che Whitaker as a witness at the hearing. 1 1 We note for completeness that the tenants could have requested Mr Whitaker be summoned to the hearing to give evidence if they wished (Section 98, Residential Tenancies Act 1986)
The owner of the properties, Mr Rivers, said he was happy to take the average of the ‘adopted rents’ in the Lewis Wright report, which was $360.00 per week, and apply it across the board to all units in the complex. He believed that different rents that had come about for the units, as the rent of each unit had been changed at different times. He was in favour of a simple approach in having one rent for all units in the complex. Law
Section 25 of the RTA provides: (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. (2) ... (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. (4) An order made under this section shall take effect on and from a date to be specified in the order, which may be the date of the order or any earlier or later date, but being no earlier than the date of the application for the order and no later than 30 days after the date of the order.
The questions the Tribunal is to determine are as follows: a. Firstly, what a market rate of rent would be for these premises; b. Secondly, whether the rent increase is substantially above the market rate, and, if so; c. Thirdly, what the rent should be.
In Fisken & Associates Limited v Lecole and Lecole [2023] NZDC 17698, the District Court stated that the Tribunal must first determine what the market rent is, and then decide if the current rent would substantially exceed it.
The Court in Fisken discussed the required evidence in market rent assessments, observing: 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.
A rent assessment completed by a registered valuer would be the type of independent evidence referred to in Fisken. A valuation is usually given significant weight 2 , but even so this depends on the quality of evidence used in the report 3 .

What would a market rent be for these premises?

We have weighed the evidence presented by the parties, including the Tenancy Services Bond data and other information referred to by the tenants, including the affidavit of P Mucalo. We note there was little evidence by way of photographs or other information, about how comparable Mr Mucalo’s two- bedroom rental property in Wairoa was to the units in question. Whilst we have considered Mr Mucalo’s affidavit, given the lack of evidence provided about its comparability with the properties in question, we are unable to put much weight on Mr Mucalo’s evidence.
The Tribunal had considered and relied on Tenancy Services Bond Data in its decision dated 14 November 2022 in relation to previous applications by these tenants for market rent assessments, as no other specific evidence was provided by the parties during those proceedings for the Tribunal’s consideration. Given this, the Tenancy Services Bond Data in the earlier proceedings was considered by the Tribunal as the best evidence available at that time.
Given the evidence provided by the parties here, we find the best evidence available to the Tribunal relating to rental levels in Wairoa is the valuation report from Lewis Wright provided by the landlord. This report assessed the local population, economic conditions and market rents in Wairoa, looked at the Tenancy Services Bond Data for Wairoa, and also considered the individual circumstances of the units in question. As such, the Lewis Wright report is directly tailored to the units in questions, within their environment and locality. From the three representative units and their ‘adopted rents’ as set out in the report, we take an average ‘adopted rent’ of $360.00 per week, bearing in mind the property owner’s consent to consider the average adopted rent of $360.00 for each unit now, and find this would likely be market rent for these premises. In taking this approach, we are minded that the report is from an independent registered valuer. In our view, considerable weight must be placed on the valuer’s opinion given the nature of his qualifications. 2 Housing New Zealand (Manurewa Neighbourhood Unit) v Abel TT Otahuhu TT 401/94 3 See for example in West v Housing New Zealand TT Wellington TT 685/96, where the tenant’s evidence was preferred to the landlord’s “flimsy valuation”.
We do not consider any additional evidence that was raised in the final submissions of the landlord/owner, that were received after the hearing on 30 April 2024, that had not already been raised at the hearing on 30 April 2024. The Tribunal allowed final written submissions to be provided by the parties after receipt of Judge Cathcart’s substantive decision dated 18 June 2024, in case either party needed to address any issues raised in the District Court’s substantive decision. It was not an opportunity for either party to introduce new evidence. All evidence was to have been received by the Tribunal before or at the hearing on 30 April 2024, so that, out of fairness, both parties had an opportunity to address all evidence then. We consider the Lewis Wright report, which was provided to the Tribunal and tenants’ representative before the hearing on 30 April 2024 by the landlord, to have been appropriately received into evidence, despite comments to the contrary in the final written submissions of Mr Olsen.

Does the rent set by the landlord exceed the market rate by a substantial amount?

As the RTA does not provide a definition of the words “substantial amount”, we apply the ordinary meaning to those words as defined in the Oxford Dictionary of English as follows:
Of considerable importance, size, or worth: a substantial amount of cash....important in material or social terms; wealthy: a substantial Devon family. 2... 3 real and tangible rather than imaginary...
As set out above, we consider the market rental for the two-bedroom units would be $360.00 per week. The proposed increased rents were between $376.00 to $382.00 originally, thus ranged from $16.00 to $22.00 per week higher. We find that these proposed rents would be higher by a “substantial amount” for the following reasons: a. The premises, as we found in our decision dated 14 November 2022 after conducting a site visit to the premises, are at the lower quartile end of rental properties. We find these premises are aimed at specific general tenants, such as pensioners, lower-income workers or those on a benefit, so as to be affordable. We do not consider these premises to be aimed at young families, for example. b. The general type of tenant who will rent these premises, being at the lower- income range of the population, will likely be significantly affected by small variations in rent, such as the increases proposed.
For these reasons, we conclude that the increases proposed for the two- bedroom units are a substantial amount above the market rate.
Nevertheless, we note that the owner/landlord, Mr Rivers, said at the hearing that he was happy for the average adopted rent in the Lewis Wright report, which is $360.00, to be applied to each unit across the board.

What rent should be set for these premises?

Given we have found the proposed rent increases to be substantially above the market rent, we have determined that the market rent should be set as the rent to apply for these premises. The Tribunal determines that rent should be set at the market rates discussed above, that is rent of $360.00 per week for each of the two-bedroom units involved in these applications.
The Tribunal directs this market rate shall apply from 1 November 2023 and shall continue in force for 6 months from the date of this order. R. Woodhouse, C. Price 06 August 2024

Tenancy Tribunal case 4734257 — Rent arrears at Unit/Flats 1, 2, 4, 5, 6, 9, 10, 11, 12, 14, 6-8 Campbell St,

At a glance

Tenancy Tribunal case 4734257 — Rent arrears at Unit/Flats 1, 2, 4, 5, 6, 9, 10, 11, 12, 14, 6-8 Campbell St,

At a glance

Claims & awards

Order

Reasons

What would a market rent be for these premises?

Does the rent set by the landlord exceed the market rate by a substantial amount?

What rent should be set for these premises?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Claims & awards

Order

Reasons

What would a market rent be for these premises?

Does the rent set by the landlord exceed the market rate by a substantial amount?

What rent should be set for these premises?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions