What was Tenancy Tribunal case 4847233 about?

The tribunal order states: The application is dismissed.

How much money was awarded in case 4847233?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4847233?

The dispute type was not classified.

Where can I read the official tribunal order for case 4847233?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10284561-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4847233 about?

The tribunal order states: The application is dismissed.

How much money was awarded in case 4847233?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4847233?

The dispute type was not classified.

Where can I read the official tribunal order for case 4847233?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10284561-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4847233 — Tenancy dispute

Order

The application is dismissed.

Reasons

Both parties appeared. The tenancy commenced on 17 April 2023, and is periodic. At the commencement of the tenancy the rent was $500.00 per week. On 09 February 2024, the landlord served the tenant with a 60-day notice issued under section 24 of the Residential Tenancies Act 1986 (The “Act”) increasing the weekly rent to $570.00, effective 17 April 2024. The notice is valid and gives the tenant more than the minimum 60 days’ notice. The tenant is unhappy with the increase and, having failed to resolve the matter with the landlord, on 27 March 2024, filed an application with the Tribunal seeking a market rent determination. Law
Sections 25(1) and (3) Residential Tenancies Act 1986 (The “Act”) 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 the case of a fixed term tenancy, any application must be filed no later than 3 months after the start of the tenancy or the last rent review (see s 25(2) RTA).
In Fisken & Associates Limited v Lecole and Lecole ([2023] NZDC 17698), the District Court recorded that the Tribunal must first determine what the market rent is, and then decide if the current rent would substantially exceed it. Step one is therefore to determine what the market rent is.
The tenant 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.’ Some earlier Tribunal cases suggested a 'rule of thumb' of 10% over market rent. However, a rule of thumb based on a specific percentage has no legal status and is not appropriate where rents rise at a rate significantly above income inflation.
The test for market rent 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 Act. The Oxford English dictionary defines willing as: "having 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 evidence for comparable rents is usually based on advertisements for similar premises in the locality. This evidence has its limitations. Although advertisements usually list the essential features of the property advertised, there is often limited qualitative information available for comparison. Also, 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.
It is also common for parties to refer to the 'market rent' statistics published by Tenancy Services. These statistics cover the rents charged for tenancies where bonds have been lodged over the preceding 6 months. The statistics include median rent as well as upper and lower quartile.
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 is arguable however that the term ‘other matters’ is broad enough to cover any anything relevant to the ‘reasonable’ expectations of a ‘willing’ landlord or tenant.
Section 25(4) of the Act provides that a market rent order may not take effect any earlier than the date of the application or any later than 30 days after the date of the order. The order may last for up to 6 months in the case of a periodic tenancy, or for such shorter period the Tribunal specifies. In the case of a fixed term tenancy, the order remains in force for the period specified in the order. Submissions
The property is a two-bedroom brick and tile unit with an open plan kitchen / dining / lounge, one bathroom, and an internal garage. The property is one of four units each constructed in 2021. The units are numbered 1/2, 2/2, 3/2 and 4/2. Each unit has a same internal layout. The landlord has previously resided in one of the units as an owner/ occupier.
The tenant has referred to the bond tenancy data which shows that for two- bedroom houses in the suburb concerned that of the 858 bonds lodged between 01 September 2023, and 29 February 2024, the lower quartile rent was $500.00, the median rent $520.00, and the upper quartile rent $550.00.
The tenant states due to the size of the open plan kitchen / dining room / living area that a dining area, with table, cannot be permanently configured. A photograph showing the inside of the property has been produced.
The tenant submits that the property is in the lower quartile, and that the market rent is around $500.00 per week, and that $570.00 exceeds the market rent by a substantial amount.
The tenant has referred to other properties in the area which they state are comparable. a. Property A: two-bedroom unit, one-bathroom, internal garage, no construction date but appears to be recently built, listed for rent 25 March 2024, $515.00 per week, b. Property B: two-bedroom unit, one-bathroom, internal garage, no construction date but appears recently built, listed for rent March 2024, $510.00 per week, c. Property C: two bedrooms detached, one bathroom, no garage, no construction date appears to be former state house, listed for rent April 2024, $540.00 per week, d. Property D: three bedrooms detached (shares same section as C), one bathroom, carport, no construction date but appears to be former state house, listed for rent April 2024, $570.00.
The other properties offered for comparison are in the suburbs [suburb 1], [suburb 2], [suburb 3], and [suburb 4]. Location wise, none of these are comparable.
The landlord states that they are not familiar with the suburb in which property A is located. Although property B is about a minute away, and in the same suburb, the landlord, who has thirty years’ experience of [redacted], states that the street is deemed a less desirable location. The landlord submits that C and D, which are on the same section, are former state houses and are not comparable properties.
The are some photographs of the inside of B, although they do not show the kitchen / dining / lounge area.
The tenant submits that the type of tenant may also be considered. I am unsure what inference the tenant is making but it appears to concern the social standing or occupations of the tenant. I am not able to take these factors into account as relevant.
The landlord has produced a letter from the landlord of unit 4/2 stating that from the beginning of the year, the rent has been $610.00 per week. The landlord has produced an online advertisement for unit 1/2 offering it for rent in March 2024 for $600.00 per week. The landlord states that they personally know the owner / landlord of unit 2/2 and understand that it is rented for $600.00 per week, and that the rent in 2023 at the commencement of that tenant’s occupancy was $580.00 per week. At $570.00 per week, the tenant’s property at 3/2 presently has the lowest weekly rent.
The tenant submits that they believe the tenant in unit 4/2 to be on a fixed term and that this may be relevant to the amount they are paying. The landlord states that the tenant of unit 4/2 is like the tenant on a periodic tenancy. Decision
Properties C and D are not comparable. Properties A and B appear to the most comparable although there is no evidence of the layout.
A direct comparison can be made with the three other identical properties nearby; the average rent of the four units, which includes the tenant’s, is $595.00 per week. This suggests that the property is in the upper quartile, and not as the tenant submits, in the lower quartile. Based on the evidence the market rent for the property appears to be around $ 585.00 to $595.00 per week. In this case, the rent charged does exceeds to market rent.
The claim that the rent exceeds the market rent by a substantial amount is dismissed. Name suppression
Both parties seek 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.
The landlord has been wholly successful and is granted name suppression.
Section 95A (4) of the Act allows the Tribunal, on the application of any party to the proceedings, or on its own initiative, having regard to the interest of the parties and the public interest, to order that all or part of the evidence, or the name or any identifying particulars of any witnesses or party, not be published.
The tenancy continues. While I am satisfied that the facts and reasoning of this decision are in the public interest, I am not satisfied that this interest necessarily extends to the name of the tenant or the address of the property. Upon careful consideration, I am satisfied that there are sufficient grounds to depart from the principle of open justice and exercise the discretion in section 95A (4). The Tribunal also orders suppression of the tenant’s name.

Reasons

Both parties appeared. The tenancy commenced on 17 April 2023, and is periodic. At the commencement of the tenancy the rent was $500.00 per week. On 09 February 2024, the landlord served the tenant with a 60-day notice issued under section 24 of the Residential Tenancies Act 1986 (The “Act”) increasing the weekly rent to $570.00, effective 17 April 2024. The notice is valid and gives the tenant more than the minimum 60 days’ notice. The tenant is unhappy with the increase and, having failed to resolve the matter with the landlord, on 27 March 2024, filed an application with the Tribunal seeking a market rent determination. Law

Sections 25(1) and (3) Residential Tenancies Act 1986 (The “Act”) 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 the case of a fixed term tenancy, any application must be filed no later than 3 months after the start of the tenancy or the last rent review (see s 25(2) RTA).

In Fisken & Associates Limited v Lecole and Lecole ([2023] NZDC 17698), the District Court recorded that the Tribunal must first determine what the market rent is, and then decide if the current rent would substantially exceed it. Step one is therefore to determine what the market rent is.

The tenant 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.’ Some earlier Tribunal cases suggested a 'rule of thumb' of 10% over market rent. However, a rule of thumb based on a specific percentage has no legal status and is not appropriate where rents rise at a rate significantly above income inflation.

The test for market rent 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 Act. The Oxford English dictionary defines willing as: "having 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 evidence for comparable rents is usually based on advertisements for similar premises in the locality. This evidence has its limitations. Although advertisements usually list the essential features of the property advertised, there is often limited qualitative information available for comparison. Also, 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.

It is also common for parties to refer to the 'market rent' statistics published by Tenancy Services. These statistics cover the rents charged for tenancies where bonds have been lodged over the preceding 6 months. The statistics include median rent as well as upper and lower quartile.

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 is arguable however that the term ‘other matters’ is broad enough to cover any anything relevant to the ‘reasonable’ expectations of a ‘willing’ landlord or tenant.

Section 25(4) of the Act provides that a market rent order may not take effect any earlier than the date of the application or any later than 30 days after the date of the order. The order may last for up to 6 months in the case of a periodic tenancy, or for such shorter period the Tribunal specifies. In the case of a fixed term tenancy, the order remains in force for the period specified in the order. Submissions

The property is a two-bedroom brick and tile unit with an open plan kitchen / dining / lounge, one bathroom, and an internal garage. The property is one of four units each constructed in 2021. The units are numbered 1/2, 2/2, 3/2 and 4/2. Each unit has a same internal layout. The landlord has previously resided in one of the units as an owner/ occupier.

The tenant has referred to the bond tenancy data which shows that for two- bedroom houses in the suburb concerned that of the 858 bonds lodged between 01 September 2023, and 29 February 2024, the lower quartile rent was $500.00, the median rent $520.00, and the upper quartile rent $550.00.

The tenant states due to the size of the open plan kitchen / dining room / living area that a dining area, with table, cannot be permanently configured. A photograph showing the inside of the property has been produced.

The tenant submits that the property is in the lower quartile, and that the market rent is around $500.00 per week, and that $570.00 exceeds the market rent by a substantial amount.

The tenant has referred to other properties in the area which they state are comparable. a. Property A: two-bedroom unit, one-bathroom, internal garage, no construction date but appears to be recently built, listed for rent 25 March 2024, $515.00 per week, b. Property B: two-bedroom unit, one-bathroom, internal garage, no construction date but appears recently built, listed for rent March 2024, $510.00 per week, c. Property C: two bedrooms detached, one bathroom, no garage, no construction date appears to be former state house, listed for rent April 2024, $540.00 per week, d. Property D: three bedrooms detached (shares same section as C), one bathroom, carport, no construction date but appears to be former state house, listed for rent April 2024, $570.00.

The other properties offered for comparison are in the suburbs [suburb 1], [suburb 2], [suburb 3], and [suburb 4]. Location wise, none of these are comparable.

The landlord states that they are not familiar with the suburb in which property A is located. Although property B is about a minute away, and in the same suburb, the landlord, who has thirty years’ experience of [redacted], states that the street is deemed a less desirable location. The landlord submits that C and D, which are on the same section, are former state houses and are not comparable properties.

The are some photographs of the inside of B, although they do not show the kitchen / dining / lounge area.

The tenant submits that the type of tenant may also be considered. I am unsure what inference the tenant is making but it appears to concern the social standing or occupations of the tenant. I am not able to take these factors into account as relevant.

The landlord has produced a letter from the landlord of unit 4/2 stating that from the beginning of the year, the rent has been $610.00 per week. The landlord has produced an online advertisement for unit 1/2 offering it for rent in March 2024 for $600.00 per week. The landlord states that they personally know the owner / landlord of unit 2/2 and understand that it is rented for $600.00 per week, and that the rent in 2023 at the commencement of that tenant’s occupancy was $580.00 per week. At $570.00 per week, the tenant’s property at 3/2 presently has the lowest weekly rent.

The tenant submits that they believe the tenant in unit 4/2 to be on a fixed term and that this may be relevant to the amount they are paying. The landlord states that the tenant of unit 4/2 is like the tenant on a periodic tenancy. Decision

Properties C and D are not comparable. Properties A and B appear to the most comparable although there is no evidence of the layout.

A direct comparison can be made with the three other identical properties nearby; the average rent of the four units, which includes the tenant’s, is $595.00 per week. This suggests that the property is in the upper quartile, and not as the tenant submits, in the lower quartile. Based on the evidence the market rent for the property appears to be around $ 585.00 to $595.00 per week. In this case, the rent charged does exceeds to market rent.

The claim that the rent exceeds the market rent by a substantial amount is dismissed. Name suppression

Both parties seek 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.

The landlord has been wholly successful and is granted name suppression.

Section 95A (4) of the Act allows the Tribunal, on the application of any party to the proceedings, or on its own initiative, having regard to the interest of the parties and the public interest, to order that all or part of the evidence, or the name or any identifying particulars of any witnesses or party, not be published.

The tenancy continues. While I am satisfied that the facts and reasoning of this decision are in the public interest, I am not satisfied that this interest necessarily extends to the name of the tenant or the address of the property. Upon careful consideration, I am satisfied that there are sufficient grounds to depart from the principle of open justice and exercise the discretion in section 95A (4). The Tribunal also orders suppression of the tenant’s name.

Tenancy Tribunal case 4847233 — Tenancy dispute

At a glance

Claims & awards

Tenancy Tribunal case 4847233 — Tenancy dispute

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Frequently asked questions

Order

Reasons

Topics & place

Residential Tenancies Act sections

Frequently asked questions