Published tribunal order
Tenancy Tribunal case 4840520 — Rent arrears at 499A Tahuroa Road, Tauwhare, RD 1, Hamilton 3371
Decided 15 Jul 2024 · Published 15 Jul 2024 · Application 4840520
- Rent arrears
- Healthy homes
- Exemplary damages
Party names are redacted in the official published order.
Order
(Table amended only 25 June 2024)
- The bond centre is to pay the bond of $3,000.00 to the landlord.
- The tenant must pay the landlord $121.43, as set out in the table below:
Reasons
- The claims were heard on 15 April 2024. The Tribunal issued a reserve decision on 18 April 2024. The Tribunal awarded the landlord rent arrears to 14 April 2024, and the tenant exemplary damages, as below: Description Landlord Tenant Rent arrears to 14 April 2024 $5,221.43 Exemplary damages failing to lodge bond $250.00 Exemplary damages misleading HHS statement $350.00 Total award $5,221.43 $600.00 Net award $4,621.43 Bond $3,000.00 Total payable by Tenant to Landlord $1,621.43
- On 22 April 2024, the tenant applied for a rehearing on the grounds that: “Payment information regarding 4 weeks Bond and 2 weeks advanced rental payments were missing from the Landlord payment schedule when calculating overdue rent. I have provided a bank statement that shows evidence of the bond and advanced rent payments 12/05/2022, and the start of regular weekly payments from 20/05/2024”.
- Section 105(1) Residential Tenancies Act 1986 provides that the Tribunal has the power to order a rehearing where “a substantial wrong or miscarriage of justice has or may have occurred or is likely to occur”.
- The landlord accepted that the rent summary was incorrect.
- I was satisfied that a miscarriage of justice may have occurred, and a rehearing was granted on the papers.
- The Tribunal attempted to resolve the matter on the papers, providing an amended Order and table, below: Re [Tenant] v King 4840520/ 4847101 Application for rehearing 22 April 2024. It appears that the landlord accepts that $1,500.00 has not been recorded on the rent summary. I can deal with the matters on the papers amending the order and table as below. 1) The Bond Centre is to pay the bond of $3,000.00 to the landlord. 2) The tenant must pay the landlord $121.43. Rent arrears to 14 April 2024 of $3,721.43, less the $600.00 awarded to the tenant = $3,121.41 less the bond of $3,000.00 = $121.43
- The tenant did not accept this amendment suggesting that the amounts of exemplary damages ordered in their favour be increased by $121.43 to achieve a neutral outcome.
- As the matter was unable to be concluded on the papers, I directed that the matter be set down for a telephone hearing. On 17 May 2024, the matter was set down for hearing today, 25 June 2024.
- [The tenant/s] and Mrs King have both appeared by telephone.
- In support of the submissions that a neutral outcome be reached, the tenant states that they believe that the award of exemplary damages should have been awarded twice, once to each tenant. The tenant referred to a decision of the Tribunal where this had occurred, although it has not been provided. There may be circumstances where the Tribunal awards exemplary damages to more than one tenant in a joint tenancy, but this is not one of them. The award made is for both tenants to share equally.
- The tenant has also submitted that, due to the obvious error made by the landlord in calculating the rent arears, the Tribunal should revisit the award of exemplary damages. In this case, doing so may have a contrary effect to that desired and reduce the award.
- I am not satisfied that there are sufficient grounds to revisit the award of exemplary damages. Except for rent arrears, the decision of the Tribunal delivered 18 April 2024 is unaltered and is set out below. Decision 18 April 2024
- The landlord, Mr and Mrs King appeared. [The tenant/s] appeared for the tenant.
- The tenancy commenced on 15 May 2022 and was periodic. The tenant gave notice, and the tenancy ended on 14 April 2024. On 19 March 2024, the tenant filed claim that the landlord had failed to lodge the bond within the required time, provided a Healthy Homes Statement (“HHS”) with the tenancy agreement containing false or misleading information regarding compliance with the Healthy Homes insulations standards and drainage/moisture ingress, and had failed to honour an agreement attributing a portion of a rent increase to garden and lawn maintenance. The tenant is seeking exemplary damages for failing to lodge the bond and providing a false or misleading statement, and compensation for increased electricity usage over the first winter period of the tenancy. The tenant is seeking a refund of the rent increase.
- On 27 March 2024, the landlord filed a claim for rent arrears to the end of the tenancy.
- The onus of proving a claim will rest with the party making it. The standard required is on the balance of probabilities. Each party must establish more likely. than not that the other has breached the terms of the agreement or provisions of the Residential Tenancies Act 1986 (The “Act”). Bond
- Under section 19 of the Act the landlord must lodge the bond with the Bond Centre within 23 days of receiving it. Failing to do so is an unlawful act for which the Tribunal may award, where it is just to do so, exemplary damages up to a maximum of $1,500.00. See section 19(2), section 109(3), and Schedule 1A of the 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 s 109(3) the Act).
- There is no dispute that the bond was not lodged within the required period. The landlord states that there was a family bereavement, and the matter was overlooked. However, despite being raised by the tenant on a few occasions, the matter was not rectified until on or about 12 March 2024, the landlord paid the bond with the Bond Centre.
- I am satisfied that there has been a breach of the Act concerning the bond. The issue is exemplary damages.
- The tenant states that when they discovered the bond had not been lodged, they questioned whether they could trust the landlord. The landlord stated that although they were not a first-time landlord that they had limited experience dealing with bonds. The landlord felt that each time it was raised that it was couched in a veiled threat, adding that if the matter was such an issue for the tenant because they had not brought an application sooner.
- The bond is the tenant’s money and should be treated as such. How to deal with bonds appropriately is clearly set out by Tenancy Services, and in the provisions of the Act. Landlords must be aware of their legal obligations. It is in the public interest that they do so. Considering the factors in section 109(3), I believe award of $250.00 is appropriate. False or misleading HHS statement and failing to comply with insulation, and drainage and moisture ingress standards.
- The property has 5 bedrooms, open plan kitchen / dining / living area, bathroom, and toilet. The property has two levels, downstairs, which is accessed via stairs, contains a rumpus / storage room, laundry, and a second toilet. The property was likely constructed in the 1970’s but renovated.
- The tenant states that during the first winter the house was cold and damp. The tenant states that condensation formed on the windows and have produced a photograph. The tenant states that they were forced to run two dehumidifiers and several small electric heaters which resulted in increased electricity usage for the period June 2022 to October 2022.
- There is a log burner in the main living room which appears to exceed the HHS regarding heating. There is no obligation on the landlord to provide heating in any other rooms.
- The tenant states that the investigated the ceiling cavity and noted that the insulation was insulfluff. [The tenant/s] states that he has over twenty years in building and construction. The tenant states that they measured the insulation just inside the entrance to the ceiling above the house and noted that it was between 60 and 90mm. The tenant did not venture further into the ceiling and states that it could have been thicker further in.
- The tenant has not produced any photographs of the insulation, or of the measurement. The tenant states that they raised the matter with the landlord orally and by text message in September 2022 whereupon the landlord visited the property. The landlord inspected the insulation and found that while it had settled near the entrance was otherwise okay.
- The tenant was not happy and contacted a local building supplier who offers free insulation checks. On about 01 December 2022, a representative of the building supplier visited and conducted an inspection. Neither [Tenant 1] or [Tenant 2] were home at the time and are unable to provide evidence as to the conduct of the inspection.
- There is no report. The tenant has produced an email from the representative dated 01 December 2022, which states “The celling insulation needs to be 120mm+, the existing insulfluff in your ceiling is under the required level”. The email does not give the name of the person making the statement. The tenant has produced a journal article stating that to satisfy an R value of R 2.9 that insulfluff should be at least 182mm, and to satisfy an R value of R 3.9 should be at least 215mm.
- Three months later, on 15 March 2023, the tenant forwarded the email on to the landlord, who then installed a layer of glass wool insulation over the insulfluff. The tenant states that over the next winter period the house was notably warmer. There is no power bill produced for this period and no comparison can be made with the previous winter.
- The tenancy agreement contains an HHS compliance statement. The statement has been completed by the landlord on 20 May 2022. The statement records the R value of the ceiling as R 3.3, and the R value of the underfloor insulation as R
- 3 with polystyrene.
- The tenant disputes the R value of the ceiling insulation and states it is less than that required. The tenant states that they have investigated the cavity under the house and cannot see any insulation. Again, there are no photographs of under the house.
- The landlord states that after conducting their investigation on or about 30 September 2022, they were satisfied that the depth as the insulfluff was at least 120mm. The landlord states that the crawled around the ceiling void and took various measurements all of which were greater that 120mm. The landlord however conceded that where the tenant had likely taken their measurement from appeared to have settled and may have been less that 120mm. Although they did not agree with the representative’s email advice they nevertheless, and to “keep the peace”, decided to install more insulation in the ceiling, adding 200mm.
- The landlord states that at the commencement of the tenancy they measured the insulation in the ceiling and having viewed the information on insulation contained on the Tenancy Services website considered that as it was at least 120mm that it meets the R value for the area, which they believed to be R3.3, when in fact it is 2.9.
- Regarding the underfloor insulation, the landlord was unaware that there was an access point under the house. The tenant has drawn a diagram of its location. The landlord has candidly told the Tribunal that they took an “educated guess” about the existence of insulation under the house, what it was and whether it met the required R value of R1.3. This is clearly a false or misleading statement. The landlord did not know whether there was insulation nor whether it complied.
- Addressing the drainage and moisture ingress, the landlord in the HHS statement states that there is no sub space under the floor and hence no moisture barrier was required.
- The tenant states that the height between the ground and the floor above at the point of access is about 1/2 a metre. The hand drawn diagram produced by the tenant suggests that this is the highest point, and from there the ground slopes and the height decreases. The tenant states that there is no moisture barrier under the house.
- In the HHS the landlord claims that the drainage is adequate. The tenant states that there are only four downpipes for the house, insufficient for heavy rain. The tenant states that water seeped through the concrete block wall under the stairs leading to the rumpus room, that the ceiling in the bathroom and one of the bedrooms also leaked. Additionally, the tenant states that the semi enclosed carport between the garage and the house flooded.
- The tenant has produced a photograph of under the stairs leading to the rumpus room which they state show seepage through the wall, a photograph of a semi enclosed carport showing water on the ground, a photograph of the floor and ceiling in the rumpus room showing a white powdery substance, and a photograph of the ceiling in the bathroom showing peeling paint.
- The tenant states that raised the issue concerning the basement on or about 18 August 2022, and that the landlord visited but took no action. The tenant stated that water had seeped through the walls a few times, but that they did not raise it again. They also stated they had raised the flooding in the carport soon after the commencement of the tenancy, and that the landlord suggested clearing the gutters of leaves. While this was an ongoing issue, they had raised it just the once. The leak in the bathroom had occurred just the once during a heavy downpour, and that a builder had been sent by the landlord to inspect the roof.
- Landlord states that water seeping through the walls of the rumpus room had been reported just the once, and after investigating the matter felt that it was the result of an extreme weather event. The powdery substance on the ceiling and floor had not been brought to their attention during the tenancy. Mr King states that he was a builder before becoming a farmer and stated that the substance appears to be lime powder.
- The landlord accepted that they had been advised about the flooding in the carport but had personally attended and cleared the gutters, and that the matter had not been raised as an ongoing issue. The landlord stated that a builder visited the property and inspected the roof after the leak in the bathroom and could not detect any damage, feeling that the leak had been caused by a blocked gutter.
- The landlord states that they had visited at least four times since November 2022 and cleared the gutters. The landlord states that the area is exposed, there are large trees nearby, and the area had experienced significant rain fall.
- The landlord is of the view that they responded to each matter when raised and that the property had adequate drainage. Regarding the paint peeling from the ceiling in the bathroom, the landlord states that the house had been repainted around April 2022 but that the painter had not used the correct paint on the bathroom ceiling, causing it to peel, and that the peeling was not related to leaking. Law
- Under s 13A(1CA), landlords must include in the tenancy agreement a signed statement that, on and after the commencement of the tenancy, the landlord will comply with the Residential Tenancies (Healthy Homes Standards) Regulations 2019 (“HHS Regulations”) as required, including the information (if any) prescribed by regulations.
- Section 13A(1F) provides that a landlord commits an unlawful act if they fail to include a healthy homes statement in the tenancy agreement or if the statement includes anything that the landlord knows to be false or misleading. The Tribunal may award exemplary damages up to $750.00 for failure to provide the insulation statement, or up to $900.00 for knowingly providing false or misleading information.
- 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 s 109(3) of the Act).
- For all tenancies entered between 01 July 2021, and 27 August 2022, this tenancy commenced on 15 May 2022, the landlord had 90 days within which to comply with the HHS. If the tenancy had been entered after 27 August 2022, there would have been 120 days to comply. All residential properties offered for rent must comply with the HHS by 01 July 2025.
- Premises must be insulated to a minimum standard (see s 45(1) (bb) of the Act and Part 3 of the HHS Regulations. In this case, for this location within the North Island, the minimum R-value for ceiling insulation is 2.9, and the minimum R value for underfloor insulation is 1.3. The insulation must also be in reasonable condition.
- Guidance provided on the Tenancy Services website concerning the HHS Regulations for insulation is that ceiling insulation less than 120mm is acceptable if the insulation R value meets the minimum required R 2.9 or R 3.3 depending in the area. Insulation of at least 120mm would therefore appear to meet the lesser requirement.
- There are exceptions to these requirements, for example, where it is impractical for health and safety reasons to install insulation, the design of the roof, substantial building works are involved, or where there is a habitable space above or below the ceiling or floor that would otherwise have to be insulated.
- The HHS Regulations for drainage and moisture ingress are set out in Part 6, and provide that if there is subfloor space, a cavity under the floor often referred to as a crawl space, and it is reasonably practicable to do so, a moisture barrier, usually a heavy-duty polythene sheet which sits on the ground below the underfloor insulation, must be installed. A rental property must also provide for the efficient drainage of storm water, surface water and ground water to an appropriate outfall, and include appropriate gutters, downpipes, and drains to remove water from the roof.
- Failing to comply with the HHS Regulations is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00 (see s 45(1A) and Schedule 1A of the Act. Decision on insulation
- First addressing the ceiling insulation, the burden in this case is on the tenant to establish that more likely than not the insulation in the ceiling failed to comply with the HHS Regulation.
- There is no dispute that the ceiling is insulated. The author of the email provided by the representative states that compliant insulfluff should be at least 120mm, this appears to be consistent with the guidance contained on Tenancy Services website. The landlord states that it was complainant. The tenant disputes that it was, although conceded that they had measured only the one area.
- Significantly, neither part has produced photographic evidence showing the insulation or the measurements they have claimed to have taken.
- In this case an HHS report, prepared by a suitably qualified assessor would have assisted. The tenant stated that they could obtain such a report if given the opportunity. I was not prepared to adjourn the matter.
- There is insufficient evidence for the Tribunal can make an objective independent assessment as to the facts concerning the thickness or thematic quality of the insulation and whether it was less, met, or exceeded the HHS Regulations.
- Merely stating that the property felt cold and required additional heating over and above that provided does not necessarily indicate non – compliance.
- Although the tenant states that the electricity usage reduced after additional insulation was installed, they have not provided electricity accounts for the subsequent winter period to make a comparison.
- Based on the evidence, the claim that the HHS statement regarding the ceiling insulation, and that ceiling insulation failed to meet the HHS Regulations is not proven.
- Dealing with the underfloor insulation, the landlord’s statement concerning the underfloor insulation is false and misleading. Without inspecting under the house, the landlord was not entitled to claim insulation compliance. On this basis I am satisfied that they have committed an unlawful act.
- If a landlord chooses to self-certify compliance, they should exercise due diligence. When unsure a prudent landlord should obtain advice before completing the statement, aware that not doing so may mislead the tenant.
- Tenants have the right to rely on the accuracy of such statements. It is in the public interest that they do so. In this case the landlord was careless as to the truth of the matter. Taking these factors into consideration I am of the view that an award of $350.00 exemplary damages is appropriate.
- However, turning to the second part of the claim, that the property did not in fact comply with the underfloor insulation requirements, there is insufficient evidence. Once again, there is no photographic evidence or evidence from someone suitably qualified. Decision on drainage and moisture ingress.
- Addressing the moisture barrier. The evidence produced has established that there is more likely than not a defined subfloor space under the house. The photographs produced by the landlord and the tenant show that the house sits above ground level and that there is a crawl space. That the landlord self-certified that there was underfloor insulation clearly shows that they did not understand or are confused as to what a “subfloor” space was. Without a subfloor cavity it would be difficult to install the type of insulation described in the statement. I accept that they were unaware that there was an access to under the house. Unlike the statement concerning the underfloor insulation, I am not satisfied that at the material time the landlord had knowledge that they may have been making a false or misleading statement about the sub floor space. However, once again a prudent landlord would have conducted further investigation into the matter.
- Regarding the drainage standard, based on the evidence, I am not satisfied that the drainage is inadequate. There are no photographs of the guttering or downpipes. The photographs produced of the exterior of the house show it is reasonably maintained. The fact that water seeped through the wall beneath the stairs in the rumpus room does not necessarily indicate inadequate drainage. Even the most efficient guttering systems can be challenged by extreme weather events, which appear to be more frequent. Debris such as leaves clogging guttering and downpipes may temporarily affect efficiency but can be easily remedied. The substance on the ceiling and floor is uncertain certain; it does not appear to be mould.
- The landlord’s obligation under the Act is to investigate and repair any defect brought to their attention within a timeframe which is reasonable in the circumstances. As to what that timeframe is, depends on the gravity of the problem but also on the objective attempts made by the landlord to investigate, and put right whatever the problem might be. I am satisfied that the landlord has responded appropriately, when advised.
- On the material produced and after hearing from the parties I am not satisfied that there is an inherent fault with the drainage and that the landlord was not entitled to certify that it met the HHS. Regarding the substance on the ceiling and floor of the rumpus room, there is insufficient evidence. Rent increase and lawn and garden maintenance.
- The tenancy agreement contains a condition that the tenant is responsible for the gardens and lawns. The property is situated in a rural setting with generous grounds. Around August 2023, the landlord gave notice of a rent increase from $750.00 to $850.00 per week. The tenant appears to have questioned the increase. In an email dated 17 August 2023, produced by the tenant, the landlord states that they had spoken to agents and concluded that the size and location of the property justified a rent closer to the market rent for similar properties in the area, which they determined to be around $950.00 per week.
- The tenant disputes the market rent but has not brought an application to challenge the increase.
- The penultimate paragraph of the landlord’s email states, “The gardens have also not been maintained during the last 12 months of your tenancy. I have contracted a gardener to come and do a full section clean up and trim the hedges, flowing this she will be coming monthly to ensure that the garden is maintained to an acceptable standard”.
- Essentially the landlord unilaterally varied the agreement, assuming responsibility for the grounds. There is no evidence that the tenant opposed this as it appears, both being busy professional people, that lack of time may have been a factor.
- The tenants state they believed that the rent increase was in part intended to cover the cost of the gardening, and that as the gardener had not come each month as stated, believed that they are entitled to a partial refund of the increase.
- Based on the material before me, which includes hearing from both parties, I am not satisfied, having conducted an objective assessment, that there was any agreement that the rent increase was to cover extra costs associated with gardening. There was no misrepresentation as to the facts. The landlord was entitled to increase the rent if they do so within the provisions of the Act. How they then choose to deal with the rent is their prerogative. If the tenant assumed that the increase was to fund gardening, then based on the material before me, they were not entitled to do so. The claim is dismissed. Landlords claim for rent arrears.
- The landlord has produced a rent summary recording all the rent payments made. The tenant made there last rent payment on 08 March 2024. The tenant ended and the tenant vacated the property on 14 April 2024. I have checked the calculation, it is correct. The amount awarded is proved. Costs
- Both parties seek reimbursement of their respective filing fees. Arguably both have at least been partly successful triggering the Tribunal’s discretion under section 102(4)(b) of the Act to order reimbursement of the filing fee. However, as reimbursing the filing fee to one would effectively cancel reimbursement to the other, and vice versa, I make no order for reimbursement of the filing fees. Name suppression
- Section 95A of the Act provides that on the application of a party that has been wholly or substantially successful in proceedings, the Tribunal must order that the name or identifying particulars not be published, unless the Tribunal considers that it is in the public interest to publish the names of the parties, or is justified because of the parties’ conduct, or any other circumstances of the case.
- In this case my global assessment is that both parties have been substantially successfully. Although entitled to name suppression it is not being sought by the landlord. The tenant seeks and is granted name suppression.