What was Tenancy Tribunal case 4770904 about?

The tribunal order states: The Tribunal has jurisdiction to hear the claim.

How much money was awarded in case 4770904?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4770904?

The primary dispute was Healthy homes. Related themes: Boarding House.

Where can I read the official tribunal order for case 4770904?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10022543-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4770904 about?

The tribunal order states: The Tribunal has jurisdiction to hear the claim.

How much money was awarded in case 4770904?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4770904?

The primary dispute was Healthy homes. Related themes: Boarding House.

Where can I read the official tribunal order for case 4770904?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10022543-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4770904 — Healthy homes

Order

The Tribunal has jurisdiction to hear the claim.
The Tribunal declares the fixed term tenancy is a valid tenancy.
The Tribunal declares the notice to terminate the tenancy is not a valid notice.

Reasons

Both parties attended the hearing and had legal representation.
[Landlord 1’s representative] represented one of the landlords, who I will call [Landlord 1].
[The tenant’s representative] represented the tenants who made the application. He also had evidence and submissions from the other landlord, who I will call [Landlord 2].
[Landlord 2] and the tenants signed a fixed term tenancy agreement. The term of that tenancy is from 1 January 2023 until 31 December 2026. Rent is $190 a week with a special condition that rent will increase to $380 once the house is healthy homes compliant. No bond was required. One of the tenants is [Landlord 2]’s sister and the other tenant is her brother-in-law. The tenancy premises is a downstairs flat which is below the house where [The landlords] have lived for a number of years. At the end of last year [Landlord 1] gave the tenants a notice to leave the house because he and [Landlord 2] have separated. The tenants filed an application which states “I want the Tenancy Tribunal to affirm to all parties we have a fixed term tenancy through the end of 2026 as specified in the tenancy agreement uploaded here with this application and are not subject to any notice to vacate at this time”. The questions I have to decide are: • Are the tenancy premises separate premises? • Have the parties contracted into the Residential Tenancies Act 1986? • Was [Landlord 2] entitled to sign a tenancy agreement? • Is the tenancy a valid tenancy?

Are the tenancy premises separate premises?

There is a preliminary issue which is whether the Tribunal can hear the claim. Both lawyers have made submissions about jurisdiction. [Landlord 1]’s lawyer submitted that the RTA is excluded because of the family relationship.
Section 77(1) Residential Tenancies Act 1986 (RTA) provides that the Tribunal has jurisdiction to hear claims between landlords and tenants relating to any tenancy to which the Act applies. Section 4 RTA provides that the Act applies to all residential tenancies unless specifically excluded.
Section 2(1) RTA defines a landlord as the grantor of a tenancy under a tenancy agreement of residential premises. A tenant is the grantee of the tenancy. The terms ’residential premises’, ‘tenancy’, and ‘tenancy agreement’ are defined as: residential premises means any premises used or intended for occupation by any person as a place of residence, whether or not the occupation or intended occupation for residential purposes is or would be unlawful tenancy, in relation to any residential premises, means the right to occupy the premises (whether exclusively or otherwise) in consideration for rent; and includes any tenancy of residential premises implied or created by any enactment; and, where appropriate, also includes a former tenancy tenancy agreement, in relation to any residential premises, means any express or implied agreement under which any person, for rent, grants or agrees to grant to any other person a tenancy of the premises; and, where appropriate, includes a former tenancy agreement and any variation of a tenancy agreement.
Section 5 RTA sets out a variety of circumstances where a tenancy is excluded from the Act. Section 10 RTA provides that, where a party to proceedings contends that the Act does not apply, they must establish the facts supporting their contention. In other words, they have the burden of proving the Act does not apply.
Section 5(1)(n) RTA provides that the Act does not apply: where the premises, not being a boarding house, continue to be used, during the tenancy, principally as a place of residence by the landlord or the owner of the premises or by any member of the landlord’s or owner’s family.
When determining whether the Act is excluded, the Tribunal considers the substance of the agreement between the parties rather than the labels they have applied. In Adams v Massey University Palmerston North TT 43/94 the District Court held that, to give effect to the Act’s true intent and meaning, the exceptions in section 5 should be interpreted strictly and not liberally.
[Landlord 1’s representative] referred me to two cases in support of the section 5(1)(n) exclusion. Both Smith v Hills [2020] NZHC 2293 and Mexted v Mexted [2021] NZTT 4300218 considered that the exclusion for family members recognised that, in a family context the parties may come to different arrangements from those entered into by landlords and tenants negotiating at arms’ length.
The bundle of authorities provided by [Landlord 1’s representative] includes Bhan v Tenant [2021] NZTT 4306748, which was an application by a family member for a possession order under section 65, which is the section which allows the Tribunal to evict a squatter. The adjudicator decided that the family members were all living in the same house and the RTA did not apply. As to the section 65 application the Tribunal decided there was insufficient proof as to ownership and noted that when there is a dispute between family members as to who has the right to live in the property then that is to be determined by the Family Court because it is not appropriate for the Tenancy Tribunal to deal with such matters.
[The tenant’s representative] referred to Harding v Schellevis, Tan and Caroto [2021] NZHC 1265. In that case the High Court considered whether the occupants of a ‘granny flat’ situated within a larger dwelling were boarders or tenants. The upper level of the dwelling had four bedrooms, a kitchen, bathrooms and a living area. The family also used a living room, garage and laundry downstairs. The ground floor also had a separate granny flat comprising two bedrooms, a kitchenette, bathroom, laundry and living room.
The granny flat had been previously rented as a separate dwelling. However, in 2015 the Council advised the owner that, due to the lack of a firewall, it could not be tenanted separately. From that time on the owner entered into house- sharing agreements.
The granny flat had a separate entrance, a dedicated parking area, and an area outside for the occupants’ exclusive use. Water and power were included in the rent and the occupants arranged their own internet. The landlord could only enter the granny flat for inspections, repairs and viewings for new tenants. The occupants had no right of entry to the rest of the house.
The High Court said the critical issue was whether the ‘premises’ referred to in section 5(1)(n) were just the granny flat, or the dwelling as a whole including the granny flat. It found that the relevant premises were the granny flat and not the entire dwelling. It gave several reasons: a. The natural meaning of premises contemplates more than one premises within larger premises. b. The statutory definition of premises includes “any part of any premises”. c. The RTA supports a generous approach to jurisdiction and a strict approach to exceptions. d. The right to occupy did not include any areas used by the landlord or her family. There were no shared or common use areas. The landlord could only enter the flat with notice and for the limited purposes in the agreement.
The self-contained nature of the granny flat was decisive in Harding. In this case, both parties gave evidence as to the self-contained nature of the downstairs flat. I note it has been rented out as a stand-alone tenancy for a number of years. It seems most likely to me the tenancy premises are separate premises because the downstairs flat is completely self contained. I find this means the exclusion at section 5(1)(n) RTA does not apply here, because the family are living in sperate premises from the landlords.

Have the parties contracted into the Residential Tenancies Act 1986?

In any event, the tenancy agreement [Landlord 2] drafted included an additional term that said “Tenants and owner are family. We opt into the Tenancy Act”. This was initialled by [Landlord 2] and by one of the tenants.
Section 8 RTA provides that, where the Act is excluded by sections 5 to 7, if the premises are used for residential purposes, the parties can contract back into some or all of the provisions of the Act.
In Featherston v Barfoot and Thompson Limited [2015] NZDC 12810, the parties to a sale and purchase agreement signed a standard form residential tenancy agreement which included a statement that the RTA applied and that the bond would be lodged with the Bond Centre. Although the tenancy was theoretically covered by the exclusion in s 5(1)(o) RTA, the District Court concluded that the parties had contracted back into the Act. The Court rejected the argument that s 8 RTA required a provision written into the agreement specifically referring to the section.
I was referred to some case law, but I have not considered it in detail here. I note there have been previous decisions where the payment of a bond and lodging the bond have been used to show the parties intended to contract into the RTA. However, this is case is different because [Landlord 2] and the tenants very clearly opted into the RTA using the additional term. I find the lack of a bond cannot be used as evidence there is no residential tenancy when the tenancy agreement states “we opt into the Tenancy Act”.
I find the RTA applies to this living arrangement and I have jurisdiction to consider the claim. Was [Landlord 2] entitled to sign a tenancy agreement?
[Landlord 1’s representative] submitted that [Landlord 1] owns the downstairs flat and provided me with titles showing ownership. I am mindful of the separation, and I decline to comment further about the property issues because I am not persuaded that ownership is the most relevant issue here. It seems to me the real issue is whether [Landlord 2] was entitled to enter into a tenancy agreement on behalf of herself and [Landlord 1].
[Landlord 2] named her and [Landlord 1] as landlords on the tenancy agreement. Only [Landlord 2] signed the agreement. [Landlord 1] states he would never have agreed to the tenancy had he been aware of it. He wants the Tribunal to find there is no valid tenancy agreement so the tenants will leave, and his notice asking the tenants to move out is what prompted their application.
[Landlord 1’s representative] submitted that [Landlord 1] never gave agency to [Landlord 2]. I was referred to Ryan v Health and Disability Commissioner [2023] NZSC 42 and the following definition The term “agent” describes a relationship whereby one person is, or is reasonably understood to be, acting on behalf of another in undertaking the conduct that is covered by legislation. The inquiry is fact specific.
In Ryan the Supreme Court considered whether a doctor was acting as an agent for a medical practice when he prescribed a medicine that a patient was allergic to. The decision required an analysis of the Health and Disability Commissioner Act 1994 (HDCA). The Supreme Court found that there was a non technical use of the word “agent” in the HDCA as meaning a person who acts on behalf of another person or firm. I note that the HDCA does not have a definition of “agent”, so that is different from the RTA. Nonetheless the Supreme Court considered that the consumer protection nature of the HDCA was relevant when giving agency a broader meaning.
[The tenant’s representative] submitted that [Landlord 2] acted as agent when she signed the tenancy agreement, as she had many times in the past. Section 2(1) RTA defines the meaning of agent and landlord as: agent, in relation to any person who is a landlord or a tenant, means an agent of that person in that person’s capacity as landlord or tenant; and includes an employee of that person in that person’s capacity as landlord or tenant landlord, in relation to any residential premises that are the subject of a tenancy agreement, means the grantor of a tenancy of the premises under the agreement; and, where appropriate, includes- ... (e) an agent of the landlord" [emphasis added]
The owner of the property will often be the grantor of the tenancy, and therefore the landlord, even where someone else acts on their behalf. However, this will not always be the case, as the RTA explicitly recognises that the owner and landlord may not be one and the same. For example, sections 5(1)(n) and 51(2)(d) refer the "landlord or owner", and sections 5(1)(s) and 51(2)(c) deal with circumstances where the landlord is not the owner. I find this means I can decide if [Landlord 2] should have signed the tenancy agreement without deciding ownership.
I was provided with some of the tenancy documentation, including tenancy agreements, signed in the past. Both [Landlord 1] and [Landlord 2] have written tenancy agreements naming both as landlords, with one signing on behalf of the other. I was provided with a bond transfer form which [Landlord 1] signed, naming [Landlord 1] and [Landlord 2] as landlords.
[Landlord 1] gave evidence at the hearing. He agreed that in the past he has drafted tenancy agreements naming himself and [Landlord 2] as landlords and which only he has signed. When I asked [Landlord 1] what was different about this current tenancy agreement he did not say that [Landlord 2] had no authority. He did not say she had no right. He did not say she had acted outside of her usual role. What he said was that he would never have agreed to the terms of the agreement if he had known about it because it was not a “usual tenancy”. By this he meant there was a fixed term until the end of 2026. He also said the previous tenancies had been discussed between them and were standard tenancies which could be ended with a notice.
It seems most likely to me that the landlords have acted together and on behalf of each other in the past. It was their usual practice to manage tenancies together, deciding on tenants, signing the paperwork and arranging maintenance and repairs. This current tenancy is no different. The commencement of the tenancy is 1 January 2023, which is long before the separation. If the landlords did not discuss the tenancy then this is a matter between them, which cannot be resolved by the Tribunal. As between the landlords and the tenants, I find [Landlord 2] was entitled to enter into the tenancy agreement.
Even if I am wrong about the agency, it seems likely to me that the tenants’ rights would be protected. In Holler & Rouse v Osaki [2016] NZCA 130, the Court of Appeal stated that the RTA is “consumer protection legislation”. Where there is any uncertainty as to whether any particular arrangement falls within the scope of the RTA, consideration of this consumer protection aspect of the RTA ought to weigh in favour of bringing the arrangement under the umbrella of the Act, and giving the tenant (and the landlord) access to the remedies that the Tenancy Tribunal can provide. This would make sense here because the tenants would be protected by the tenancy agreement bringing them under the RTA, and whether or not [Landlord 2] had agency would be sorted out as a dispute between [Landlord 2] and [Landlord 1].

Is the tenancy a valid tenancy?

[Landlord 1’s representative] submitted that there can be no tenancy agreement without the payment of rent. [Landlord 1]’s evidence is that no rent payments have been paid into the account historically used for rent. [The tenant’s representative] submitted that rent has been deducted from wages and he provided a rent summary and a copy of some account transactions from [Landlord 2]’s Xero account. [Landlord 2] said she and her sister are working together and [Landlord 2] is deducting rent from the money her sister earns. There are notes of “rental income deducted from payments to [The tenant/s]” noted on the Xero account. The 12 payments showing in Xero are equal to $190 a week rent, and an amount for power which changes each month depending on the check meter.
Deducting rent from wages is a valid way to pay rent. I was not provided with payslips and I do not know if the information in Xero can be changed after the fact. Despite these shortcomings, and also considering the oral testimony of the parties at the hearing, it seems most likely to me that rent has been deducted from wages. Exactly where [Landlord 2] has kept that rent money is not relevant to the Tribunal, because I do not have jurisdiction to resolve matters between landlords.
[Landlord 1’s representative’s] submission is that there are none of the usual hallmarks of a landlord and tenant relationship, such as inspections, notices of entry, and a bond paid. There is also a very favourable rent of $190 a week. She submitted this proves there was no intention to create a legal contract. In reply the tenants said they are paying a lower rent until the house is healthy homes compliant, when the rent will go up to $380 a week. They said all visits by the landlord had been by consent, and that maintenance had been arranged by [Landlord 2] when required. I am not persuaded there was a lack of intention to contract into the RTA. I note here that the parties have contracted into the RTA, which means the house should not be rented if it does not meet the healthy homes standards. Paying a lower rent and a signing an acknowledgement on the tenancy agreement does not change the obligations the landlords have under the RTA.
[Landlord 1’s representative] presented evidence to support that fact that [Landlord 1] and [Landlord 2] were traveling when the tenancy agreement was signed. This meant it was impossible for [Landlord 2] to sign the agreement on 1 January 2023, the date written next to her signature on the tenancy agreement. [Landlord 2] and the tenants agreed that they signed the tenancy agreement before 1 January 2023 but thought they should put a later date on the signing because of the student visa requirements. I accept that forward dating the agreement was odd, but I am not persuaded I should draw the conclusion that the tenancy agreement was drafted and signed in December 2023, after the separation.
[Landlord 1] gave evidence that a fixed term for almost four years was not a usual tenancy. There is nothing in the RTA which prevents a four-year fixed term tenancy.
Finally, [Landlord 1’s representative] referred me to section 78(1)(f) and (g) of the RTA. This allows me to set aside agreements where it appears to the Tribunal that an agreement is harsh or unconscionable, or induced by fraud, misrepresentation or mistake. My jurisdiction is limited to the rights and obligations of landlords and tenants. I do not find there was anything in the dealings between [Landlord 2] and the tenants which could be called harsh or oppressive or which was induced by fraud, misrepresentation or mistake.
Taking all this into account, I find the tenants have a fixed term tenancy agreement which started on 1 January 2023 and ends on 31 December 2026. I also find the notice given by [Landlord 1] to end the tenancy is not a valid notice. Other orders
Both parties have asked for suppression. The Tribunal must, on the application of a party that has wholly or substantially succeeded in proceedings, order that the party’s name or identifying particulars not be published, unless the Tribunal considers that publication is in the public interest or is justified because of the party’s conduct or any other circumstances of the case.
The Tribunal may, on the application of any party to proceedings or on its own initiative, having regard to the interests of the parties and to the public interest, order that all or part of the evidence given or the name or any identifying particulars of any witness or party not be published. See section 95A RTA.
The tenants’ application for suppression is allowed because the tenants are the most successful party. I am using my discretion to allow suppression for the landlords because they are family members and naming them could identify the tenants.

Tenancy Tribunal case 4770904 — Healthy homes

At a glance

Claims & awards

Tenancy Tribunal case 4770904 — Healthy homes

At a glance

Claims & awards

Order

Reasons

Are the tenancy premises separate premises?

Have the parties contracted into the Residential Tenancies Act 1986?

Is the tenancy a valid tenancy?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Order

Reasons

Are the tenancy premises separate premises?

Have the parties contracted into the Residential Tenancies Act 1986?

Is the tenancy a valid tenancy?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions