What was Tenancy Tribunal case 4799114 about?

The tribunal order states: The rent for the premises at [Tenancy address suppressed] is reduced from

How much money was awarded in case 4799114?

Per Week To: $840.00 awarded to landlord

What type of tenancy dispute was case 4799114?

The primary dispute was Healthy homes.

Where can I read the official tribunal order for case 4799114?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10161229-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4799114 about?

The tribunal order states: The rent for the premises at [Tenancy address suppressed] is reduced from

How much money was awarded in case 4799114?

Per Week To: $840.00 awarded to landlord

What type of tenancy dispute was case 4799114?

The primary dispute was Healthy homes.

Where can I read the official tribunal order for case 4799114?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10161229-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4799114 — Healthy homes

Claims and awards in Tenancy Tribunal application 4799114. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
per week to	$840.00		per week to

Claims and awards in Tenancy Tribunal application 4799114. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
per week to	$840.00		per week to

Order

The rent for the premises at [Tenancy address suppressed] is reduced from $900 per week to $840 per week (market rent).
The market rent reduction in order 1 is to take effect from 11 February 2024 and will continue in force for a period of 6 months from that date.
Over paid rent to date can be used as a rent credit for the upcoming rental obligations.
All other claims are dismissed.

Reasons

[The tenant/s] have applied to the Tribunal for a decision on two matters that are affecting their tenancy, as follows: i. Whether their rent increase from $775 to $900 exceeds market rent? ii. Whether the landlord’s intention to rent out the adjoining property is lawful?
[The tenant/s] say the rent increase is substantial and not in line with market rents, and therefore should be reduced. [The landlord/s], who attended the hearing with representatives ([The landlord/s representative/s]) from their newly contracted property management company, [Property management company 1], submit that they undertook market research and consider the rent they have set is slightly below the market rent.
[The tenant/s] also say that when they rented this property the attached self- contained unit (‘the unit’ or [neighbouring unit]) was only to be used sporadically for a meditation business. Now [The landlord/s] wish to rent it out to a tenant which they say is an alteration to the terms of their tenancy. [The landlord/s] submit that the two properties are distinctly separate and independent of each other and as such they should be able to rent both properties out at their discretion. They have held off advertising it until this decision is made.
I discuss each issue separately as follows. The parties can be assured that all evidence submitted prior, at, and post hearing has been considered although it may not have all been referenced in this decision.

What is the market rent?

The submissions for [The tenant/s] are that the new rent is not a fair reflection of the state of the property and is substantially higher than the market rent. They consider it unreasonable and ask the Tribunal to provide clarity on the correct level of rent the home should be rented at.
They say the 4th room at 5.6 sqm is not legally big enough to be advertised as a bedroom and it was advertised to them as a study. They have used it briefly for a cot but otherwise they say, it is really only big enough to be an office. They therefore consider that the rent should not be assessed against other 4- bedroomed properties.
They further note that as the majority of the furnishings are original (2000) they are beginning to appear tired and dated which should affect the amount the property can be rented for. They also note that if the unit is rented out that will have a further impact on the real value of the home to them given the infringement on their privacy.
The submissions for [The landlord/s] are that they are very careful when setting their rents and use a robust process to obtain an increased rent as they do not take the decision lightly. They look at the Tenancy Services website and then Trademe to see what else is advertised in the region. It is very important to them, they say, that they do not lead the market so try to price themselves slightly below market rent as they interpret it.
They point out that they are good landlords and have been for 16 years having never been taken to the Tribunal previously.
[The landlord/s] say the 4th room is 5.9sqm and therefore pursuant to section 8(2) of the Housing Improvement Regulations 1947 1 (the Regulations), 2 it can legally be used by a child.
This home has 3-bedrooms, 2 bathrooms, a study/4 th child’s bedroom, separate toilet, living/dining space, garage and separate parking space. It was built in 2000 and is in reasonable condition although dated. It has new carpet and a dated ducted heating system which the tenants say is inefficient and expensive. It has single glazing and a large footprint and section.
The home was rented out at $630 per week to the previous tenants to this tenancy and prior to that, had not had a rental increase in a number of years. The law
Sections 25(1) and (3) Residential Tenancies Act 1986 (RTA) 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 such an application, [The tenant/s] have the burden of proof. What this means is that they 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’.
The test for what is market rent is, 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 RTA. The Oxford English dictionary defines willing as: "having 1 Every bedroom shall have an area of not less than 6 sq m: provided that in an existing house a room with an area of less than 6 sq m but not less than 4.5 sq m may be occupied as a bedroom by a person under 10 years of age. 2 Which do apply to this house. 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 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 has been argued that the term ‘other matters’ is broad enough to cover any anything relevant to the ‘reasonable’ expectations of a ‘willing’ landlord or tenant.
While section 25(3) of the RTA lists a number of factors that the Tribunal should have regard to, no one factor should take precedence or priority over the others. Recognition must also be had that market rent assessments are not a science but one that is primarily based on the evidence available to the Tribunal. Discussion
[The tenant/s] refer to the 'market rent' statistics published by Tenancy Services. These statistics cover the rents charged for tenancies where bonds have been lodged. The statistics include median rent as well as upper and lower quartile.
The relevant statistics are for November 2023 which are as follows: 3-bedroom house Lower quartile: $695 Median rent: $713 Upper quartile: $750 4-bedroomed house Lower quartile: $805 Median rent: $850 Upper quartile: $870
For January 2024 they are: 3-bedroom house Lower quartile: $695 Median rent: $713 Upper quartile: $770 4-bedroomed house Lower quartile: $800 Median rent: $850 Upper quartile: $850
Market rent statistics from Tenancy Services have limitations as evidence because it can be difficult to determine the nature of the premise in relation to the other premises covered by the statistics. This is because these statistics are based on bedroom size and bonds lodged, no further amenity. It is therefore of limited value although I do bear the information in mind.
[The tenant/s] have also provided evidence of advertisements for similar premises in the area. They have provided advertisements for 3-bedroomed homes in the area ranging between $700 and $830, and for 4-bedroomed homes between $835 and $900. They submit that the most akin to this property is [Property 1] although it has 4 full sized bedrooms. It is rented out for $825 per week.
[The tenant/s] have provided articles which note the following: a. TradeMe’s Rental Price Index saw a 6.7% increase in [Region] rent between September 2022 and September 2023. Urban properties saw an
3% increase. b. TradeMe also listed [City] as one of the most expensive places to rent in the country, however they note that [City] has seen a 2.2% increase year- on-year. This article also states that the median weekly rent for a 5+ bedroom in [Region] is $985 p/w. c. Realestate.co.nz lists a 4% increase in rental price in [Suburb] to December 2023.
[The landlord/s] have provided the following market evidence: i. A spreadsheet detailing the properties they considered when setting the rent, when the price was challenged and since, as follows: [Screenshot redacted] ii. A Comparative Market Analysis by CoreLogic an online property data, information, analytics and services provider. CoreLogic gave an appraisal price range of $930 to $975. It provided eight comparable 4-bedroomed homes and two 3-bedroomed homes for rent in the wider area. iii. A rental appraisal provided by [Property management company 2] on 1 February assessing the property with a rental range of $900 to $960 per week. iv. A rental appraisal from [Property management company 1] on 2 February assessing the appropriate rent as $975 per week. v. [The landlord/s representative] presented currently available advertisements from Trade Me from the day of the hearing. They showed 3-bedroomed properties between $700 and $770, and 4- bedroomed between $850 and $880 with one at $1,100.
[The tenant/s] note that the rental appraisal from [Property management company 2] was obtained without viewing the property therefore they submit that it is inaccurate as it does not take into account the actual state of the property. They also say that when [Property management company 1] visited the property to do their appraisal in late February (after they had given their original one), they verbally told them that it was valued between $850 and $900 as “it was quite tired”.
[The landlord/s] submit that [Property 2] is a closely comparable property based on its advertising which was listed at $920 per week. They say it is of a similar size both inside the house and the grounds to this property.
[The tenant/s] submit however that the [Property 2] home is it is slightly larger with more useable space, having 2 separate living areas and a dining room and more parking. They pointed out that it had been listed since the beginning of December and wasn’t rented by the hearing date.3 They also reference that it has a hot tub, sea views and landscaped grounds.
I note before going any further, that evidence of other advertised properties also has some limitations. Although advertisements usually list the essential features of the property advertised, there is often limited qualitative information available for comparison. Further, 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. I take the evidence into account bearing in mind its limitations. Findings
I have considered the evidence provided to me very clearly but ultimately I must draw conclusions from that evidence because of course neither the parties nor myself have been inside all comparable properties, and as such the evidence is based upon what is available on the internet. What is especially relevant to my deliberations is the property size, age and condition. I also find that the unit being semi-detached to this property is a relevant factor to its desirability.
I accept on the evidence that the home is in good condition although relatively dated and wearing. I find this is a 3-bedroomed property which can be advertised as including an additional child’s bedroom or study. I am not satisfied that it can safely be advertised as 4-bedroom given the dimensions of the 4 th bedroom are less than 6sqm. It therefore falls in between 3- and 4-bedroom listings. Alongside that however, this is a large house with many usable areas.
I do not accept the evidence of general rental increases as relevant to this increase as those statistics consider all rent increases on all properties (that they had access to) and are generalised. It cannot flow from those statistics that landlords can only increase their rents in line with the average percentage increase. 3 Presumably it now has been as it is no longer listed although I note it has been sold.
Having assessed the comparable properties I have been provided with, with the information I have been given, I am satisfied that the following properties are similar in many ways to this home: a. [Property 1] ($825 per week), 4-bedroomed, double garage. No semidetached unit attached. b. [Property 3] ($900 per week). Similar age but smaller. 4-bedroom with a double garage. No semidetached unit attached.
However, they are both 4-bedroomed and neither has a unit attached. I do not accept the rental appraisals as on the information I have, they were conducted without viewing the property. I accept [The tenant/s] evidence of the later oral communication of [Property management company 1] that the more appropriate rent would be $850-$900.
Having considered all the evidence provided, I am satisfied that the market rental for this property is approximately $840 per week. This takes into account the size and nature of the property and the relatively limited number of homes available for rent in [Suburb] which is a highly desired family area. I note that the available properties for rent in [Suburb] over the course of these proceedings has changed regularly demonstrating the popularity of the area. At the date of issuing this decision there is one three-bedroomed home for rent and one four-bedroomed property marketed on Trade Me.
I must therefore ascertain whether the new rental of $900 per week exceeds the market rent by a substantial amount.
When I deliberate over what is a substantial amount, I consider [The tenant/s] evidence that the increase to $900 was a significant amount which has affected their food spending for the month. I note that the Tribunal has previously found that when rents are as high as they currently are compared to national wage inflation, an increase of $10-$20 per week above market rent, may be considered substantial given the disproportionate effect on discretionary spending. 4
I am satisfied that a $60 increase is a substantial amount. $60 per week in the current economic climate of high living costs, is significant. Accordingly, I direct that the rent be set at $840. The rent increase took effect on 11 February with this application being made prior to that. The reduction therefore is to be post- dated to take effect from 11 February 2024 5 . [The tenant/s] will therefore be in a rent credit which can be applied to their future rental obligations.

Can the unit be rented out separately?

4 [2021] NZTT [Event location suppressed] 4312923, paragraph 29. 5 See section 25(4) RTA.

[Neighbouring unit] is a consented 6 , self-contained unit attached to the main house by a garage. Its parking space is off to the side of the shared driveway.
[The tenant/s] effectively seek a declaration that [The landlord/s] should not be entitled to rent out [neighbouring unit] as a residential tenancy because that was not the basis upon which they accepted their tenancy, and they consider it would therefore be an unconsented amendment to their tenancy. They say they were told [neighbouring unit] would be used for meditation classes and it was upon that understanding that they contracted for their tenancy. [The tenant/s] did question how often [neighbouring unit] would be used and whether their children would affect or be affected by its use before the agreement was signed.
[The tenant/s] say that their children run all around the property, including on the driveway, therefore if more people are using the driveway this will create a danger for their children. They say that when the meditation classes meant that [neighbouring unit] was being used more frequently, they contacted [The landlord/s] who amended the driveway usage which supports their contention that it was an agreed term between the parties that the usage of [neighbouring unit] was relevant to their tenancy.
It was this understanding upon which they have conducted their tenancy and they say that permanent residents in [neighbouring unit] would fundamentally alter their use and enjoyment of the property.
[The tenant/s] does accept that they did not pay strong regard to [neighbouring unit’s] use when they were negotiating the tenancy as they were pressured to find a home quickly but it was important to them that it was to be [The landlord/s] using the unit, not strangers.
[The landlord/s] say that they made it clear [neighbouring unit] was a separate unit when discussions regarding this tenancy occurred. At that time, they were testing the market for their meditation classes, but they say they have rented it out to permanent tenants previously which has worked suitably for all concerned. They now wish to return to that arrangement and consider they should be entitled to given the properties are separate and distinct.
[The landlord/s] submits that they did not expect [The tenant/s] to remain in the property after their initial 12-month fixed term which is why they did not rent [neighbouring unit] out earlier. I do not accept this submission as pursuant to section 60A of the RTA, fixed terms automatically evolve into periodic tenancies upon their expiry unless the parties agree otherwise, or the tenants give notice (neither of which has occurred here).
The questions for the Tribunal therefore are: 6 I accept the evidence from [City Council] that it is consented as a separate unit; [neighbouring unit]. i. Was it a term of this tenancy that [neighbouring unit] only be rented out for meditation classes, therefore would a change to that use be an amendment to this tenancy? ii. Would the use of [neighbouring unit] as a residential tenancy be a breach of [The tenant/s] quiet enjoyment of their tenancy? iii. Can the renting out of [neighbouring unit] be prevented by the

Tribunal?

I find that the answer to the first question must be no. The tenancy agreement specifically refers to [Tenancy address] the Top Deck and contains no reference to the use or otherwise of [neighbouring unit]. I accept some discussions were had about its use, but I do not find it substantiated in evidence that it was a term of this tenancy that [neighbouring unit] only be used sporadically. Very little information was discussed regarding the use of [neighbouring unit] prior to the acceptance of the tenancy but it was clear it was a separate property.
Accordingly, I am not satisfied that a change in use of [neighbouring unit] would be an amendment to this tenancy.
Moving on to the second question and [The tenant/s] quiet enjoyment. Section 38 of the RTA states that a tenant shall be entitled to quiet enjoyment of the premises without interruption by the landlord and that a landlord shall not cause or permit any interference with the reasonable peace, comfort, or privacy of the tenant in the use of the premises by the tenant.
The interruption here would primarily be the regular use of the driveway as there would be no other shared spaces. Whilst this use would increase substantially, relative to its current use, I am not satisfied that a neighbouring tenant using the driveway would be an unreasonable breach of [The tenant/s] quiet enjoyment. Yes, it will impact them as they have young children who play on the driveway, however it has only been by good fortune that this inconvenience has not yet been incurred. Ultimately, [neighbouring unit] is a separate unit which has always enjoyed its separate park and [The tenant/s] were aware that the users of [neighbouring unit] would be sharing the driveway at various times.
I therefore do not find it a potential breach of section 38 of the RTA by the landlord if they were to rent it out separately. This does not take into account of course the nature of the person to move in so the situation may be different if the tenant was to prove disruptive.
Finally turning to the last question, I do not find it established that the Tribunal can, or should, prevent [The landlord/s] renting out [neighbouring unit] separately. As discussed, it is a separate unit, [The tenant/s] always knew it was a separate unit which [The landlord/s] had control over, there is no shared space other than the driveway and on the face of it, a separate tenancy should not impact [The tenant/s] tenancy fatally.
Accordingly, this claim must be dismissed.

Should suppression be granted?

Both parties have sought suppression orders. 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.
Sadly, both families have experienced serious illness in the preceding 12 months and these proceedings have undoubtably contributed to their stress. I do not find it justified to contribute to their stress any further by publishing their names. Ultimately both parties came to the Tribunal for a decision on questions they were both unsure of and are difficult areas of law. Accordingly, to an extent, they were both successful.
I therefore approve both parties’ applications for suppression orders.

Tenancy Tribunal case 4799114 — Healthy homes

At a glance

Tenancy Tribunal case 4799114 — Healthy homes

At a glance

Claims & awards

Dismissed claims

Order

Reasons

What is the market rent?

Can the unit be rented out separately?

Tribunal?

Should suppression be granted?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Dismissed claims

Order

Reasons

What is the market rent?

Can the unit be rented out separately?

Tribunal?

Should suppression be granted?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions