Published tribunal order
Tenancy Tribunal case 4799525 — Healthy homes
Decided 7 May 2024 · Published 7 May 2024 · Application 4799525
- Healthy homes
- State of repair
- Exemplary damages
Party names are redacted in the official published order.
Order
- Tiffani Le must pay [the tenant] $16,047.58 immediately, calculated as set out in the table below, including the refund of the full bond to Juliet Grant of $2,320.00 that Tiffani Le has held in her bank account unlawfully for the duration of the tenancy.
Reasons
- Both parties attended the hearing.
- The tenants have applied for general and/or exemplary damages for: a. Failure to lodge the bond with the Bond Centre in the statutory time frame, b. Failure to provide healthy homes information in the tenancy agreement; c. Breach of healthy homes standards; d. Failure to repair and maintain;
- The tenant has also applied for: a. Refund of the bond; and b. Reimbursement of the filing fee. Background
- The parties confirmed the house is a 1950’s bungalow that has 3 bedrooms, kitchen, lounge and one bathroom as well as a sleep out, that was not self- contained.
- The tenant confirmed she had lived in the sleep out during the 6-month tenancy of a friend of the landlord’s and when that tenancy ended, she rented the entire premise from the landlord.
- The tenancy commenced on 3 June 2020 and ended on 11 February 2024 (192 weeks 4 days).
- The tenancy initially commenced pursuant to a 12-month fixed term tenancy agreement that commenced on 3 June 2020 and ended on 2 June 2021. When the fixed term tenancy ended, the tenancy became period until the parties entered into a further 12-month fixed term agreement on 19 October 2022. The second fixed term period went from 1 November 2022 to 1 November 2023. At the expiry of this fixed term period, the tenancy became period again.
- During the tenant’s tenancy she says that she and her son lived at the premise and that at times during the tenancy they had a border that slept in the sleepout and used the bathroom, but not the other shared facilities such as the kitchen and the laundry.
- The landlord claimed that the tenant had 7 or 8 persons living in the house, she had no evidence to support this claim, but stated that the house was damp, mouldy and could because to many persons were living at the house and using the bathroom. The tenant denied this claim and reiterated that at no time during her tenancy did more than 3 adults live in the 3-bedroom home and that she was legally entitled to have a border. The landlord claimed the tenant was subletting the sleepout in breach of the tenancy agreement. There was no evidence provided for this claim and it is unlikely the sleep out was sub-let as it was not self-contained. It is more likely the person was a border as claimed by the tenant.
- The landlord confirmed that she gave the tenant a 90-day notice to end the tenancy on 10 February 2024 as the owner wanted to house family that were coming to live in New Zealand from Vietnam in the next 90 days after the tenancy ended and the owner also wanted to undertake renovations that could not be undertaken while the tenancy was on foot. As the tenant did not make a claim for retaliatory notice, I did not enquire about the legality of the 90-day notice issued by the landlord.
- The landlord did confirm that some of her cousins had moved into the premises to help renovate it because the owner (the landlord’s mother) did not have the money required to get contractors to undertake all the work required. The landlord’s husband confirmed that lack of funds is the reason the landlord had failed to maintain the premises during the tenancy.
- When I enquired how the renovations were being funded immediately after the tenancy ended, the landlord confirmed that she had recently been made redundant and received redundancy compensation and that after the initial work is done by the landlord’s cousins, she will use her redundancy compensation to have the rest of the work completed to get the house healthy homes compliant before the owner’s Vietnam family arrive in New Zealand. The landlord also stated that she is covering the lost rent, while the renovations are being done, by using her redundancy compensation. Failure to lodge the bond with the Bond Centre
- The tenant’s claim the landlord did not lodge the bond with the Bond Centre within the required time.
- A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received. See section 19(1) Residential Tenancies Act 1986.
- Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. See section 19(2) and Schedule 1A Residential Tenancies Act 1986.
- The tenant signed the first fixed term tenancy agreement with the landlord at some time in June 2020. Although the tenancy commenced on 3 June 2020, the tenant made her first rent payment and payment of the $2,320.00 bond on 19 June 2020.
- The landlord is required to ensure the tenant’s bond is lodged with the Bond Centre within 23 days of her receipt of the bond. The landlord never lodged the bond with the Bond Centre. I find the landlords have committed an unlawful act.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest. See section 109(3) Residential Tenancies Act 1986.
- Landlords are required to understand their responsibilities to tenants. I am satisfied the landlord should have reasonably known that the bond had to be submitted to the Bond Centre within 23 days after her receipt of it.
- The landlord could have sought advice from the Tenancy Services website and/or the Call Centre. The website contains bond forms and other such resources that the landlord could have used to inform her of what to do with the bond.
- The obligations placed on a landlord to put the bond into the Bond centre on trust for the tenant is an obligation the Tribunal takes seriously. The bond is owned by the tenant, until the parties agree that all or part of the bond can be paid to the landlords to cover proven debts.
- I find it would be just to require the landlord to pay a sum of $500.00 in exemplary damages because: a. The landlord intentionally did not ensure that the bond was lodged with the Bond Centre within 23 working days after 19 June 2020 and still had not lodged the bond with the Bond Centre as at the date of the hearing; b. The tenants are entitled to rely on the Bond Centre protecting their bond money that should have been placed in it on trust for the tenants’ benefit, unless it is proven the tenants owe the landlord a debt that both parties agree can be paid by the Bond Centre to the landlord or on order from the Tribunal. The tenants’ money was not protected by the Bond Centre (a third independent party) for a period of 192 weeks 4 days, and it should have been. The landlord retained the bond without the tenants’ knowledge of who held their bond. The tenant called the Bond Centre to find out how to have the bond released at the end of her tenancy and that was the first she knew that the bond had never been lodged; c. It is in the interests of the tenants to receive exemplary damages for the landlord’s breach of its obligations to lodge the bond with the Bond Centre; and d. it is in the public interest for landlords’ to be penalised as a disincentive to breaching their obligations pay the bond received into the Bond Centre promptly for the protection of both parties’ interests.
- The landlord claimed the tenant was in rent arrears and the Tribunal should not release the bond to the tenant for that reason. She requested that I withheld the bond, until she can make a cross application for rent arrears. She provided a rent summary of sorts to support her request for the bond to remain with her until she makes a cross application. The rent summary she provided was not in the required format and contained mathematical and factual errors.
- The landlord also stated she had taken the equivalent of 6 weeks rent in advance for the bond ($3,480.00) instead of the $2,320.00 the tenant confirmed she had been required to pay and had paid on 19 June 2020. This calculation error formed part of the rent arrears she was claiming exists. Section 18(1) of the Residential Tenancies Act 1986 (RTA) confirms “a landlord shall not require payment by way of bond of an amount greater than 4 weeks’ rent lawfully payable under the tenancy agreement”. The landlord has either unlawfully required the tenant to pay more than 4 weeks bond or has miscalculated the rent paid from the onset of the tenancy by attributing 2 weeks rent to bond rather than rent paid in advance.
- The landlord also claims the rent arrears she is claiming have arisen in part because the tenant should have started paying a $40.00 per week rent increase from 3 December 2020 (6 months into a 12-month fixed term tenancy). Section 24(1)(d) of the RTA confirms “rent must not be increased within 12 months after the date of the commencement of the tenancy”.
- Based on the landlord’s poor record keeping and clear breaches of the RTA she is relying on to prove rent arrears are owed to her, it is difficult to ascertain what, if any rent arrears existed at the end of the tenancy. In addition, the landlord has not made a separate claim for rent arrears. As such, I am not satisfied that it is equitable to withhold the tenant’s bond and have ordered the landlord to refund the full bond to the tenant immediately. Failure to provide healthy homes standards statement and information in the tenancy agreement.
- The tenant claims that the landlord has breached her obligations under section 13A(1CA) of the Residential Tenancies Act 1986.
- Under section 13A(1CA), a landlord must include in the tenancy agreement a statement, made and signed by the landlord, that, on and after the commencement of the tenancy, the landlord will comply with the healthy homes standards as required by section 45(1)(bb) or 66I(1)(bb) (as the case may be); and including the information (if any) prescribed by regulations under section 138B(5). The Residential Tenancies (Healthy Homes Standards) Regulations 2019 require that the landlord provides a statement in each tenancy agreement that confirms that the premises complies with each of the healthy homes standards or why the premises are subject to any lawful exemptions.
- The requirement that the landlord’s statements under 13A(1CA) be signed by the landlord is in addition to the requirement under section 13(1) that the landlord sign the tenancy agreement.
- Breaching the landlord’s s13A(1CA) obligations without a reasonable excuse is an unlawful act for which exemplary damages may be awarded up to a maximum of $750.00. See section 13A(11F)(a) and Schedule 1A Residential Tenancies Act 1986.
- The landlord did not provide the tenant with health homes information in either of the fixed term tenancy agreements. She was required to include an insulation statement in the first tenancy agreement and information about smoke alarms in the rental premise, as it was entered into prior to 1 July 2021.
- The second fixed term tenancy agreement was signed on 19 October 2022 and was legally required to contain healthy homes statements on all five of the healthy homes standards, being insulation, ventilation, moisture ingress and drainage, draught stopping and heating and it also was required to provide smoke alarm numbers, where they are located, when they were last tested and date they are due for replacement.
- I find the landlord has committed an unlawful act.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest. See section 109(3) Residential Tenancies Act 1986.
- I am satisfied the landlord intentionally failed to provide the tenant with the required completed and signed healthy homes statements, prescribed by sections 13A(1CA) and 45(1)(bb) of the RTA, and it would be it would be just to require the landlord to pay a sum in the nature of $500.00 of exemplary damages (two third’s of the maximum penalty available), because: a. The landlord should have reasonably known she had to comply with the Residential Tenancies (Healthy Homes Standards) Regulations 2019 and intentionally did not. The evidence the landlord and her husband gave the Tribunal suggests the landlord did not comply with the HHS due to lack of funds to make the home compliant. In addition, the tenancy agreement used is the template agreement provided by tenancy services. This template includes the healthy homes statements required to be provided and those parts of the template have been intentionally omitted; b. The impact on the tenant of the landlord not providing this information is that they took on the tenancy for a premise that did not meet any of the HHS and that led to respiratory issues for her and her son because of the coldness, dampness and mould in the house. The tenant may not have taken the tenancy if she had known the premise did not comply with any of the healthy homes’ standards, but was denied that opportunity; c. It is in the interests of the tenant to be compensated for the landlord’s failure to provide signed proof to the tenant that the rental premises meet all of the healthy homes standards; d. It is in the public interest to penalise landlord’s that intentionally breach the law and fail to provide signed healthy homes standards statements that meet the requirements set out in the Residential Tenancies Act 1986 and the Residential Tenancies (Healthy Homes Standards) Regulations 2019. Failure to maintain
- Under section 45(1)(b) of the RTA, the landlord has an obligation to investigate and repair a defect brought to its attention, within a timeframe that is reasonable in the circumstances. In Collins v Professionals Hutt City Ltd, the Wellington District Court held “what that time is depends not only on the gravity of the problem but also on the objective evidence of the attempts made by the landlord to investigate, and put right, whatever the problem might be”. 1
- There is an obligation to repair, even if the tenant has notice of the state of repair of the premises when entering a tenancy agreement.
- A tenant may give a landlord 14 days’ notice to remedy a breach of the RTA and/or any relevant enactment in relation to buildings, health and safety, but should do so in good faith and to remedy a real and significant breach 2 . However, notice from the tenant is not required if the landlord knew of the need to repair 3 or the need for repair was apparent from observation 4 .
- There is also failure to repair if the repair is ineffective, non-complaint or unsafe 5 .
- Under section 45(1)(a) of the RTA, a landlord must also provide the premises in a reasonable state of cleanliness.
- Breaching either of these s45 obligations is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A) and Schedule 1A Residential Tenancies Act 1986.
- General damages may also be awarded in the form or rent reductions, water rates reductions or compensation for the stress, inconvenience and loss of amenity suffered by the tenants.
- The tenant gave evidence that the premises were cold and damp from the commencement of the tenancy and that she regularly had to use mould cleaners to wipe the walls and the ceilings to remove mould patches. She stated that the damp mouldy conditions were worst in the bathroom walls and ceiling, in her son’s bedroom celling, walls and wardrobe and in her wardrobe, 1 Collins v Professionals Hutt City Ltd DC Wellington CIV-2009-085-1431, 24 February 2019 at [15]. 2 Brough v Housing NZ Ltd NZTT1848/1, 27 May 202 at [13]. 3 Berghan v Ponsonby Property Management Ltd trading as L J Hooker [2015] NZTT Manukau 2845 at [9]- [11]. 4 Barfoot & Thompson Ltd v Casey DC Auckland CIV-2005-004-1762, 7 November 2007 at [4]. 5 Staife v Aegis Trust [2016] NZTT Auckland 3314 at [31]. but that some mould grew on all the ceilings throughout the house and in the sleep out.
- The tenant stated that she did her best to regularly ventilate the house and sleep out, but she did not have a dehumidifier and there was no working heating in the house or sleep out. This made it challenging for her to keep the house dry, warm and free from mould.
- The tenant confirmed she first raised the issue with the house being cold, damp and mouldy and the paint in the bathroom ceiling peeling off at the beginning of 2022 as she was having health issues and was not able to keep the house mould free due to the level of general dampness in the house. She says she raised the issues with the bathroom being very damp and mouldy first when Terry (the landlord’s husband) came to undertake some small maintenance jobs. Then each time Terry came to the house she raised the damp and cold conditions she was living in and the mould.
- Terry confirmed that he had come to the house to fix a leak in the kitchen and undertook general maintenance work when it was required, he is married to the landlord and his mother-in-law is the owner of the premises. He said that he had got permission from his mother-in-law to send contractors in to address the peeling paint in the bathroom and the mould issues and that a contractor had been to undertake this work. Further, he confirmed that the contractor did not do an adequate job and that his mother-in-law couldn’t afford to do the amount of work required to stop the house from bathroom from being so damp and cold that mould formed on the walls and ceiling and the paint peeled. He confirmed that consequently, after a short period of time after the bathroom had been repainted, the bathroom paint was back to peeling and mould forming on the walls and ceilings.
- The landlord claimed there is nothing wrong with the house and said it is only because of the number of people living in the house and using the bathroom that the bathroom had become cold, damp and mouldy and that the prior tenant had not had any dampness or mould issues.
- Terry had confirmed that he had seen the damp and mould issues in the bathroom and that the tenant complained to him about the heating and dampness issues more generally. He also confirmed that the remedial work undertaken in the bathroom was not sufficient for the issues to be fully resolved in the bathroom and that not long after the bathroom had been repainted the paint began peeling and mould reappeared. He also confirmed that although he had not seen the other rooms in the house, he could confirm that he had spoken to his mother-in-law and wife after the tenant raised the dampness and mould issues throughout the rest of the house and his mother-in-law had refused to address these due to lack of funds.
- Despite the remedial work undertaken in the bathroom, the tenant was left in living conditions that not only in breach of the landlord’s obligations under s45 of the RTA, but also in breach of the Housing Improvement Regulations 1947, which state a house must be free of dampness.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest. See section 109(3) Residential Tenancies Act 1986.
- I am satisfied it would be just to require the landlord to pay a sum of $2,400.00 in exemplary damages (a third of the total penalty available), and make the order accordingly because: a. The tenant, her son and her border have been living in an undesirable and unhealthy living environment for the duration of the tenancy. The landlord knew of the tenant’s damp, cold and mouldy living conditions and refused to remedy this. The remedial work undertaken in the bathroom did not fix the issues complained of and consequently not long after the remedial work was completed the mould and peeling paint returned; b. The tenant suffered the stress and inconvenience associated with the loss of the amenity of the sleepout when it became too cold, damp and mouldy to live in, loss of amenity of the wardrobes, which could not be used due to the level of mould that grew on the tenant and her son’s clothing and other possessions and of the tenant having to repeatedly follow the landlord up and remind her of her obligations under the RTA to no avail ; c. It is in the interests of the tenant to receive exemplary damages for the stress, inconvenience and loss of amenity for the 3 years and 8 months she lived at the premises; and d. It is in the public interest for landlord’s to be penalised as a disincentive to breaching their repair and maintenance obligations.
- Further, I find the tenant should have received a rent rebate for the 13-month period she has have had to live in substandard damp mouldy conditions, since she first raised these issues with the landlord in January 2022. I find it fair and reasonable for the tenants to receive a rent rebate of $50.00 per week for the period 1 January 2022 to 11 February 2024 (110 weeks and 1 days). 50 x 110 =$5,500.00. $50.00 divided by 7days x 1 day = $7.14. $7.14 plus $5,500.00= $5,507.14 rent rebate ordered. Healthy Homes Standards
- The tenants claim the landlord has breached its obligations under section 45(1)(bb) of the Residential Tenancies Act 1986 (RTA), which requires compliance with the Residential Tenancies (Healthy Homes Standards) 2019 (HHS). The tenants consider that the landlord has failed to comply with the HHS moisture ingress and drainage standard.
- Compliance dates for the HHS vary depending on the tenancy: a. All private rentals must comply within 90 days of any new or renewed tenancy after 1 July 2021, with all private rentals complying by 1 July 2024. b. All boarding houses must comply by 1 July 2021. c. All houses rented by Kāinga Ora and registered Community Housing Providers must comply by 1 July 2023.
- The date of commencement of tenant’s tenancy was before 1 July 2021, being 3 June 2020. All tenancies had to comply with the Smoke Alarms and Insulation Regulations from 1 July 2019. There was considerable media attention and a lead in time of 3 years for this legislation.
- Even if this tenancy did not have comply, at its commencement, with all of the healthy homes standards (HHS) they still had to comply with the Smoke Alarms and Insulation Regulations and must have continued to do so until the date the premises had to comply with all the remaining HHS. This means the landlord have been required to comply with the Insulation standard and the smoke alarm regulations from 1 July 2019 and did not.
- The second tenancy agreement commenced on 1 November 2022. As such, the landlord was required to comply with all of the healthy homes’ standards from the120th day after the first renewal date on or after 28 August 2022. The tenancy was renewed on 1 November 2022. Therefore, the rental premises were required to meet the healthy homes standards from 1 March 2023.
- The tenant commissioned a healthy homes assessment report on the last day of her tenancy, being 11 February 2024, as she was frustrated that the landlord had failed to maintain the property in a reasonable state of repair having regard to the age and character of the premises and the period during which the premises are likely to remain habitable and available for residential purposes and she was sure the premises also failed to meet the HHS.
- The healthy homes assessment report proves the rental premises do not meet any of the healthy homes’ standards. It states: a. Our healthy homes assessments take into account all five areas of compliance: heating, insulation, ventilation, moisture ingress and drainage; b. The overall results are that the house is non-compliant; c. The house does not meet the heating standards because the heating device installed whilst flued, is not in good working condition and has no heating capacity specified and recommends installing an electric heat pump in the main living area to meet compliance; d. The house does not meet the ceiling insulation standard as none of the ceilings have insulation at least 120mm in thickness, the property does not qualify for an exemption, the insulation has gaps, and the unmarked recess lighting does not maintain 150mm clearances. The IC-F rated downlights in the kitchen also have not been cleared properly leaving gaps. New ceiling insulation is required, and it needs to be installed to NZS4246:2016; e. The house does not meet the underfloor insulation standard as there is no underfloor insulation in the subfloor cavity; f. The assessor was unable to ascertain whether the house complied with the wall insulation standard as all the walls were lined and inaccessible to the assessor; g. The house did not meet the ventilation standard as i. All habitable rooms in a rental property must have at least one window, door or skylight which opens to the outside and can be fixed in the open position. In each room, the size of the openable windows, doors and skylights together must be at least 5% of the floor area of that room. Each window door, window or skylight must be openable and must be able to remain fixed in an open position. All kitchens and bathrooms must either have an extractor fan that vents air to the outside or a continuous mechanical ventilation that meets certain criteria. ii. The property has no kitchen extraction device installed. iii. The bathroom extractor fan is not in good working condition and is not externally extracted. This would have played a large part in the mould forming on the bathroom ceiling as when operational the moisture would have extracted directly into the ceiling cavity above, dripping off the roofing material and straight down onto the ceiling. h. The house does not meet the moisture ingress and drainage standard as: i. The drainage system is damaged and is not in good working condition. Multiple points have an incorrect degree of fall, leading to still water and potential for overflow. Other areas have cracks and are damaged, leading to leakage. ii. The separate sleepout and external sunroom also have no guttering or downpipes present leading to water pooling on the ground surface. iii. There is no ground moisture barrier installed. A ground moisture barrier needs to be installed and must meet NZS4246:2016 standards. i. The house does not meet the draught stopping standard because: i. There are major draught issues present around doors and windows; j. The bathroom floor also has two large holes with the subfloor dirt present that need immediate attention as not only could they lead to unreasonable draughts, but also rodent/pest issues.
- Breaching the landlord’s obligation to ensure the property meets the HHS is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A).
- I find that the landlord has committed an unlawful act and that the breach was intentional.
- I am satisfied it would be just to require the landlord to pay a sum of $4,800.00 in exemplary damages (two thirds of the total penalty available), and make the order accordingly because: a. The tenant, her son and her border have been living in an undesirable and unhealthy living environment for the duration of the tenancy that does not meet any of the healthy homes’ standards. The landlord knew of the tenant’s damp, cold and mouldy living conditions and failed to investigate this fully and to ensure the house complied with all of the HHS that may have been contributing to these issues; b. The tenant and her son suffered stress and ill health as a result of the house not meeting any of the HHS and was denied the opportunity to decide not to rent a non-compliant house because the landlord withheld that information from her; c. It is in the interests of the tenant to receive exemplary damages for the stress and ill health she and her son experienced after living in a non- compliant home for 3 years and 8 months; and d. It is in the public interest for landlord’s to be penalised as a disincentive to breaching their compliance with HHS obligations. Reimbursement of filing fee
- Because [the applicant] has wholly succeeded with the claim I must reimburse the filing fee.