What was Tenancy Tribunal case 4881033 about?

The tribunal order states: There are orders for the suppression of the names of both parties.

How much money was awarded in case 4881033?

Compensation: $2,850.00 awarded to tenant; Property Damage: $1,200.00 awarded to tenant; Property Damage: $250.00 awarded to tenant; Rent Arrears: $15,800.00 awarded to landlord

What type of tenancy dispute was case 4881033?

The primary dispute was Rent arrears.

Where can I read the official tribunal order for case 4881033?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10918269-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4881033 about?

The tribunal order states: There are orders for the suppression of the names of both parties.

How much money was awarded in case 4881033?

Compensation: $2,850.00 awarded to tenant; Property Damage: $1,200.00 awarded to tenant; Property Damage: $250.00 awarded to tenant; Rent Arrears: $15,800.00 awarded to landlord

What type of tenancy dispute was case 4881033?

The primary dispute was Rent arrears.

Where can I read the official tribunal order for case 4881033?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10918269-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4881033 — Rent arrears

Claims and awards in Tenancy Tribunal application 4881033 — net $11,500.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
Rent arrears	$15,800.00		Rent arrears
Compensation		$2,850.00	Compensation
Exemplary damages: Tenancy Agreement		$250.00	Tenancy Agreement
Exemplary damages: Maintenance		$1,200.00	Maintenance
Total award	$15,800.00	$4,300.00
Net award	$11,500.00
Total payable by Tenant to Landlord	$11,500.00

Claims and awards in Tenancy Tribunal application 4881033 — net $11,500.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
Rent arrears	$15,800.00		Rent arrears
Compensation		$2,850.00	Compensation
Exemplary damages: Tenancy Agreement		$250.00	Tenancy Agreement
Exemplary damages: Maintenance		$1,200.00	Maintenance
Total award	$15,800.00	$4,300.00
Net award	$11,500.00
Total payable by Tenant to Landlord	$11,500.00

Order

There are orders for the suppression of the names of both parties.
[The tenant/s] must pay [The landlord/s] $11,500.00 as calculated in the table below:

Reasons

The tenant’s application was originally brought against [Mr R], who is the director of the landlord company, and the person with whom the tenant communicated about the tenancy. The proceedings were amended to name [the company] as the owner and landlord of the premises.
Both parties attended the hearing on 6 June 2024, the landlord represented by Director, [Mr R] and the company’s lawyer, Mr Woollaston.
The hearing was adjourned part-heard to enable the parties to file further information. Directions were issued accordingly.
The landlord provided further evidence.
The tenant filed her final evidence on 24 July 2024.
On 7 August 2024 I gave the tenant a further opportunity, until 21 August 2024 to seek legal advice and/or negotiate a settlement of her claim.
The time for filing further evidence, submissions or withdraw claims has now passed.
The tenant seeks $30,000 in compensation and/or exemplary damages for: a. Lack of written tenancy agreement b. No key c. Non-compliance with Healthy Homes Standards including not providing documentation d. Heating e. Not attending to maintenance when raised f. Breach of quiet enjoyment/harassment g. Unlawful residential premises.
The landlord seeks rent arrears and has filed an updated rent summary.
During the hearing there was some evidence about the pavers, but it was agreed at the hearing that there is no issue to be determined about these.
The tenant also filed some evidence about having some overgrown plants removed. In the absence of evidence as to whose responsibility the grounds were, no determination has been made about this.
The onus is on each party to establish their claims. The standard of proof is on the balance of probabilities. That means the tenant must provide the evidence so that the Tribunal can find that a matter she alleges is more likely than not to be true. Overview
The tenant and her family moved into the property in 2015, taking over the tenancy from her niece. At that time, there was a different landlord called Kiri Brooker. The property had 6 bedrooms including an office.
[The company] became the landlord as result of buying a warehouse. They were told that there was a woman living in the building at the front, that there was no formal arrangement and the rent was being paid sporadically.
There was no written tenancy agreement.
Although the landlord said at the hearing that they purchased the property in February 2020, based on the communication outlined below, and the rent summary provided it seems that any tenancy between the parties did not commence until late May or early June 2020 and ended 18 October 2023. Tenancy Agreement
[The tenant/s] claims the landlord has not ensured the tenancy agreement is in writing and/or did not sign the tenancy agreement and provide a copy to the tenant.
A landlord must ensure the tenancy agreement is in writing, signed and a copy provided to the tenant prior to the tenancy commencing. See section 13 Residential Tenancies Act 1986.
Breaching this obligation is an unlawful act, for which the Tribunal may award exemplary damages up to a maximum of $750.00. See section 13(4) and Schedule 1A Residential Tenancies Act 1986.
The landlord did not attend to a written tenancy agreement. He produced a message from the former owner which says: Caroline McGrath has been in the house for numerous years now, and unfortunately we do not have an agreement with her. I have let her know that you will be in touch to arrange a new agreement and she is very obliging and so will be no problem. She currently plays $300 a week and payment is made weekly (Wednesday). We never charged a bond when she started so you could request one if you wish.
On 29 May 2020 the landlord emailed the tenant saying that they were the new owners, and attaching the bank account details for the weekly rent payments.
The tenant replied on 2 June that she wanted to speak to him about a couple of things. They had further communication and she asked for a heat pump.
On 26 June 2020 the landlord emailed the tenant advising that a heatpump was to be installed. He also said that the rent was well below market rent, which he thought would be $500 to $550 per week and proposed $425 a week. He asked the tenant to see what entitlement she might have with her benefit in order to meet that rent.
The landlord also advised that he was getting someone to look at the roof leak. He also said that the wanted to tidy up the issue of a tenancy agreement but said they would wait until the heatpump had progressed to see what she could arrange with her benefit.
The tenant replied that she could not get any more on her benefit as she was on ACC. The landlord explained that he thought that she would be entitled to an accommodation supplement from WINZ, but that he did not want to stress her out and they could re-visit the situation in 6 months’ time.
On 1 July 2020 she messaged the landlord saying: Sorry to ask again, but when will we be getting heating. I’ve given heater back as I can’t afford $650 power bill each month. We are freezing.
The landlord replied the next day that he had told “Chillmax” to go ahead.
No written agreement was ever organised. The landlord therefore committed an unlawful act.
Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied that 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 that the landlord knowingly did not attend to the written agreement and his actions were intentional. The impact of this omission on the tenant has not been significant, but there is a public interest in reminding landlords of their obligations under the Act. I have decided that $250 is an appropriate award of exemplary damages in this instance. Health issues
The tenant says that her health has suffered as a result of mould in the property. In support of that, she provided photos showing a black area around a grid in the bedroom, with paint flaked or worn away around the grid, paint that had flaked off into a bucket, which she said was as a result of the leak, a black area on the wall beside the carpet where a skirting board had been removed, a broken wall in the laundry as a result of a flood from a previous tenant, blackness also being visible in this photograph.
The tenant provided a letter dated 10 May 2023 from Kauri Healthcare, saying that she presented on 3 May 2023 for her chronic cough. It said that her respiratory symptoms (including possible black mould exposure) were currently being investigated.
The presence of mould in and of itself is not a breach of any provision of the Residential Tenancies Act. Mould may be present for a number of reasons, and often simply needs to be wiped away.
The landlord’s application for discovery of the tenant’s medical records was declined on the basis that the onus is on the tenant to establish her claim for compensation.
In order to do that, she must produce evidence that: a. There was mould in the property. b. The mould was there because of an act or omission of the landlord in breach of his obligations under the RTA. c. The mould was the cause of any health problems.
The tenant said that she had not had the mould tested because she could not afford to do so.
In the absence of independent expert evidence of the nature of mould in the property; the nature of the tenant’s health problems; the relationship between the health problems and the mould; and that any act or omission on the part of the landlord was the cause of the mould, I am unable to make any determination that the landlord is in any way responsible for the tenant’s health problems. Healthy Homes Standards
[The tenant/s] claims that the landlord has breached the landlord’s 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).
Compliance with the HHS depends on the date the tenancy commenced. If the tenancy commenced between 1 July 2021 and before 28 August 2022, the rental must comply within 90 days of the commencement of any new or renewed tenancy. The present tenancy commenced on or about 30 May 2020. Accordingly, the 2019 HHS do not apply to this tenancy.
This also means that the landlord was not required to provide a statement about the compliance with the HHS or provide the tenant with any information about compliance.
Accordingly, the tenant’s applications in respect of HHS are dismissed. Heating
The tenant claims that the heating was inadequate or faulty. In her application she said that they had no heating and they begged to get a heatpump in.
Under Regulation 6 of the Housing Improvement Regulations 1947, every living room must be fitted with a fireplace and chimney or other approved form of heating.
The tenant said that before the landlord took ownership of the property there was no heating. The previous landlord had provided a bar heater. The tenant asked her to take it back because it was expensive to run.
As set out above, on 2 June 2020 (within one week of the start of the tenancy), the tenant asked for a heatpump. There is no dispute that a heatpump was installed. The landlord provided a signed letter dated 20 March 2024 from Chilimax Refrigeration confirming that a heatpump was installed on 24 July 2020.
The tenant said that when her electricity bills became excessive, she emailed the landlord asking for the heatpump to be fixed or serviced. She provided the Tribunal with copies of power bills for June, July and August 2023. These averaged $709 per month. In fact, in a text message to the landlord on 1 July 2020, the tenant said, “Hi [name], Sorry to ask again, but when will we be getting heating. I’ve given heater back as I can’t afford a $650 power bill each month.”
The tenant provided no evidence to show that the heatpump was faulty or that there had been any sudden increase in her power bills or that such increase might be attributable to a faulty heatpump. It is possible that the heatpump required servicing, but the tenant has not established any loss resulting from that.
The tenant’s claim in relation to heating is dismissed. Maintenance of the property
Under section 45(1)(b), the landlord must provide and maintain the premises 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.
Breaching this obligation is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45 (1)(A) and Schedule 1A RTA.
Under section 46, the landlord must provide and maintain such locks and such other similar devices as are necessary to ensure that the premises are secure. Failure to comply with this is an unlawful act for which exemplary damages may be awarded up to a maximum of $1,500.00. Wall in laundry
The tenant provided photos of a wall in the laundry that was damaged. She said it had deteriorated because of the leaks in the property.
However, the tenant produced an email from Kiri Booker confirming that damage to the laundry wall and floor had occurred during the previous tenancy. The tenant said that the previous tenants had flooded the laundry.
The photographs produced by both parties show that the lower part of the wall beside the laundry tub is broken and collapsing.
On 7 September 2022 the tenant texted the landlord with a photograph. She said that she was vacuuming and the skirting board had come away. There was a black substance where the board had been and the tenant she believed it was from the laundry behind the wall, which had a hole in it from the previous tenants. said it was
I find that the landlord has failed to maintain this wall and has committed an unlawful act. Leaks
The tenant provided photographs showing a damaged ceiling, as a result of a leak.
The landlord said that during the winter months of 2021 leaking was reported and he had someone fix the leaks. He did not have an invoice.
The tenant said it was not fixed.
The tenant produced a screenshot of a text from him on 26 October 2021 saying that he could get someone to look at the leak the next day, and another one for 27 October saying that the builder was there. The tenant replied that she would be there in 2 minutes.
Based on this exchange, I am satisfied that in October 2021 the landlord arranged for someone to look at the leak.
The next evidence of any communication about the leak is a screenshot of a text on 14 December 2021 notifying the landlord that they had had a lot of rain, that the bedroom was still leaking and that the toilet and bathroom were now leaking. She said they had buckets everywhere.
The landlord said that he would remind the builder. The tenant said that some roofers had been and thought they had fixed it, but the tenant said that the leaks were coming from the skylights. The landlord said he would text the builder.
On 24 January 2022 the landlord (Ms N) said she would like to do an inspection and take photos of the issues the tenant was experiencing.
On 17 February 2022 the tenant emailed the landlord notifying him that he was in breach of his responsibilities for not fixing the leak in the bathroom, upstairs bedroom or checking the light in the bathroom to ensure it was safe in light of the leak.
The landlord replied that this was not a good path to follow. He said that there is no tenancy agreement so different rules apply, that the tenant was paying a token rent, and that she was in arrears. He agreed to meet with the tenant when he got back into town.
In July 2022 the tenant again texted saying that the bathroom was leaking badly and she was particularly concerned about the leak above the sink where the light is.
The next communication produced is from the landlord, on 20 October 2022, saying that Mr R and his builder would like to confirm a site visit for 26 October.
The landlord said that in 2022 a builder looked and said that ideally the skylights would need to be reflashed. There were 7 or 8 of them. The damaged linings needed to be removed, and then gibstopping and painting to be done. He said they were happy to do that, but that the tenant would need to move out for two to three weeks. They did not offer to pay for alternative accommodation, but dd not expect her to pay rent during that period.
The landlord provided a letter dated 11 March 2024 from Peter Bryson, on letterhead from Bryson Contractors Ltd, confirming a visit to [the address] to view the leaks and subsequent damage in the first floor bathroom and laundry. He says that the bathroom leak appears to be the Velux skylight. The repair options were to remove it completely and gib the ceiling or to re-flash, taking the new flashings to the ridge as is now required for compliance.
According to Mr Bryson, the damage to the walls and floor in the laundry were not related to the leak in the bathroom above but were a localised result of the flooding. He said that the small amount of mould present was a direct result of this flooding and could be easily removed with a trigger sprayer and a bleach and water solution or white vinegar. He had told the tenant this.
Mr Bryson said that he had viewed the other skylights 8 skylights he thought they could all be problematic and he recommended removing and reinstating them all with a correct flashing system and redecorating the interiors. He recorded that Mr R was happy to proceed with this, but when Mr Bryson suggested that the tenant would need to find alternative accommodation for two to three weeks because there would be a partially open roof and no water, the tenant indicated some reluctance to move temporarily.
In a message dated 27 March 2023, the landlord said that he was getting a roofer to come and reflash the roof lights but it was difficult to get tradespeople. He said that once the roof was fixed, they would fix up the bathroom and laundry.
The photographs show painting falling away from a small patch in the ceiling and also another patch on the wall near the ceiling. These are consistent with a leak.
There is no dispute that the laundry wall was damaged and that the roof was leaking into the bathroom and bedroom. It is unfortunate that the previous landlord did not ensure the laundry wall was fixed before this tenant moved in, or before transferring to the present owner. However, that does not mean that the present landlord had no obligations. From early in the tenancy the landlord was aware that the wall in the laundry was damaged but he did not take any steps to repair it.
Between 2020 and 2023, the landlord’s responses to the leaks in the ceilings were reasonable. As noted above, based on the landlord’s emails to the tenant in 2020 (see paragraph 24 above), the landlord was aware of a leak as early as 2020. However, the issue was never resolved.
The landlord says that the premises are no longer being leased for residential purposes. He says that there is currently no problem with leaking.
I am satisfied based on the text exchanges and the photographs and videos supplied by the tenant that during the term of her tenancy, there were ongoing issues with leaks in the bathroom and bedroom.
The tenant has not established that the damage in the laundry or the wall of the adjacent room where the skirting board has come away is as a result of an ongoing leak.
The landlord says that the tenant would have needed to move out in order to address the problems but the tenant denies this was discussed.
Based on the letter from Mr Bryson, I find that there was likely some discussion of this possibility. However, I am not satisfied that the tenant agreed to no repairs on the basis that she did not want to move out.
I accept that the landlord was in a difficult position, in that he had bought a business that had a residential tenancy attached to it. The premises were already damaged in the laundry because of a flood and there were problems with leaks that were not easily resolved.
However, when he purchased the premises, he became the new landlord and under section 45(1)(b), the landlord must provide and maintain the premises 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.
Some repairs such as the damage in the laundry needed to be attended to straight away. That was never repaired. The leaks in the roof were not fixed.
Throughout the tenancy the landlord’s communication appears to have been considerate and he has endeavoured to fulfil his responsibilities as a landlord by attending to maintenance. The tenant was nevertheless inconvenienced by ongoing leaks. Accordingly I order the equivalent of two weeks’ rent for each year as compensation. That is $600 for 2020, $600 for 2021, $800 for 2022 (when the rent had increased) and $800 for 2023. That makes a total of $2,800 compensation for the roof leaks.
Although I find that the landlord should have repaired the laundry wall, the tenant has not described any inconvenience related to this and did not ask the landlord to repair it at any stage.
Although the landlord did make efforts to attend to the leaks, there is no evidence that throughout 2023 there were any further efforts were taken to fix them. I find that the landlord failed to maintain the premises and he 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.
A leaking roof has a significant impact on any tenant. It is important that this landlord and others are reminded of their obligations. Accordingly, taking into account the matters in section 109(3) I have decided that it is just to order of $1,200 exemplary damages. Keys and garage door
The tenant complained that during the tenancy she had no key to the door and had to use a garage door opener to access the home.
This situation started in 2015, five years before the landlord acquired the premises. It is not clear that the landlord was advised when he took over the premise that the tenant needed a key or that she raised this with him during the tenancy. The tenant provided no evidence that she asked for a key during the tenancy.
In 2022 the garage door failed. On 23 September the tenant texted the landlord. Arrangements were made for review and quotes. In the meantime, the tenant needed to lift the door manually and hold it open with wheelie bins. It was repaired on 5 October.
I find that the landlord did not intentionally fail to provide or maintain the locks or garage door. He took reasonable steps to have the garage door fixed in a reasonably timely manner. Accordingly, he did not commit an unlawful act.
Through no fault of either party, the tenant was inconvenienced during the time that the garage door was faulty. For 10 days, she lost an amenity that was included in her rent and made access to her home difficult. Accordingly she should be compensated $50.00 for that. Harassment
[The tenant/s] claims the landlord has harassed them.
A landlord must not interfere with the reasonable peace, comfort or privacy of the tenant in their use of the premises. See section 38(2) Residential Tenancies Act 1986.
Breaching this obligation in circumstances that amount to harassment is an unlawful act for which exemplary damages may be awarded up to a maximum of $3,000.00. See section 38(3) and Schedule 1A RTA.
Harassment means "to trouble, worry or distress" or "to wear out, tire, or exhaust" and "indicates a particular pattern of behaviour directed towards another person". MacDonald v Dodds, CIV-2009-019-001524, DC Hamilton, 26 February 2010.
The tenant produced no evidence to suggest that the landlord had harassed or interfered with her quiet enjoyment of the premises. The communication was cordial at all times.
The tenant has not established this claim and it is dismissed.

Are the premises unlawful?

The Tribunal may declare premises to be unlawful residential premises. See section 77(2)(ac) Residential Tenancies Act 1986.
According to section 78A(2) of the Act “unlawful residential premises” means residential premises that are used for occupation for a person as a place of residence but: a. cannot lawfully be occupied for residential purposes by that person; and b. the landlord has caused or contributed to the unlawful occupation by failing to comply with section 36 or 45(1)(c) of the Act.
Section 36 requires the landlord to take all reasonable steps to ensure that, at the commencement of the tenancy, there is no legal impediment to the occupation of the premises for residential purposes.
Section 45(1)(c) requires the landlord to comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises.
The tenant produced a copy of an email dated 30 October from a Customer Service staff member at Palmerston North City Council. She confirms that the property at [tenancy address] is rated for commercial/industrial, not residential.
The landlord argued that an email from customer services was hearsay and was not sufficient for the tenant to establish that the premises were unlawful. It was submitted that the rating category does not determine the permitted uses of the property.
Because section 78(1) provides that the Tribunal may make a declaration “on application by a party or otherwise on the evidence before the Tribunal in respect of any claim within its jurisdiction”, and the tenant had provided evidence that provided some support for her claim, I invited further evidence and submissions from the landlord.
The landlord provided copies of the Palmerston North City Council District Plan and operative plan provisions relating to the industrial zone and pointed to the fact that [the street] has dual zoning, the premises in question being on the border between the two. It was “acknowledged that, under the operative plan, residential utilization of the industrial zone is now sought to be avoided, unless there is good cause for providing residential amenity within the industrial zone, however such use is neither unlawful, nor do the provisions of the operative policy revoke existing use rights.”
The landlord further said, “There is nothing, arising from the zoning, or permitted council utilization of the property, which would result in the tenancy at issue having been unable to be lawfully instated; there is, in short, no planning law impediment to such use.”
Whereas the landlord provided general information about the District Plan, the tenant obtained information about this particular property. She provided an email dated 4 July 2024 from the Steve McNicholl, Monitoring and Enforcement Officer with the Palmerston North City Council. The attachments referred to were also provided. The email reads: The conversion of the building to a dwelling was approved in November 1990 – see 1st attachment. This was approved by Town Planning as a caretakers residence with the proviso that it will always be used as caretakers residence. The 2nd attachment is the Council rules that applied in 1990. Residential accommodation in the Industrial Zone was a permitted use provided it was for 1 employee and his family. The 3rd attachment is a resource consent that was granted in November 2002 to erect a car-shed at the front of the property for the dwelling. Again it is emphasised that the dwelling must support the Industrial business that operated from the site. The 4th attachment is a fax that was sent to the property owner at the time confirming that dwellings are only permitted where they are ancillary to the existing business or activity on the site. The message has been very clear all the way thru – the residential dwelling must be used by/ancillary to the industrial activity on site. It can not be rented separate to the business. I will be writing to the owner outlining this non compliance with the Councils District Plan.
Therefore, based on the evidence provided from the Council, neither the present landlord nor the previous one could rent the premises to anyone other than an employee of the business. 1
In Tenant v Presland and Co Trustee Company [2021] NZTT 4290197, the Tribunal reviewed the law in relation to unlawful residential premises. 1 The timetabling directions made on 6 June included an opportunity for the landlord to file evidence by 30 June and 21 July. The landlord did not file anything on the second date.
It was noted that the public policy behind the introduction of s 78A was to discourage landlords from renting out properties that were, for example, unconsented or unlawful and had therefore never been subject to the need to meet legal requirements to ensure their safe and healthy occupation by tenants.
The Hon Phil Twyford said during the debate: This bill aims to strengthen the powers for prosecuting landlords who have rented out unsuitable accommodation, such as garages, warehouses, and industrial buildings. There was one very notable case—I think it was 61 Molesworth Street— where, at the time of the Wellington earthquakes, the ratbag owner of that building had rented out a lot of that commercial space to tenants. They were found to be living not only in kind of unsafe and unsuitable accommodation but—what the bill points out is that if people are not in premises that are consented for residential purposes, then landlords cannot be held to the provisions of the Residential Tenancies Act.
Adjudicator Watson observed that the cases before the Tribunal tend to fall into one or more of the following categories: a. Unconsented premises, such as rental of a caravan on a rural property, 2 or lack of building consent. 3 b. Premises where an abatement notice or dangerous and insanitary building notice has been issued by Council: 4 c. Cases where garages, basement conversions or parts of premises being used as a larger household unit have been converted for residential use and then rented out as a separate household unit, without Council consent as to the change of use. The premises themselves may have had the necessary building consents but there is no Council approval for the use of the premises as a separate household unit.
The present situation is not a case of a landlord renting out commercial or industrial premises for residential purposes. There is no evidence that the premises are intrinsically unsuitable for residential occupation. However, the premises could not be lawfully occupied for residential purposes by anyone but a caretaker. Therefore there was a “technical” breach.
A similar situation arose in Chen v Kumar, 5 an appeal from a Tribunal decision. The relevant premises were a downstairs unit comprising 2 bedrooms, a living room, a bathroom and kitchenette. In 1982, a consent had been granted by the Borough of Howick to the then owner of the premises to operate an old people’s rest home for 5 people on the top floor, with the basement area being used for 2 McRory v Prince [2020] NZTT Waitakere 4211290, 4214275 3 Brewer v Hills [2020] NZTT 4223142, 4215118 4 Pow v Harnett [2019] NZTT Timaru 4187180, 4177460 5 [2022] NZDC 7783 garage space and residential accommodation for the applicant and her family only.
The District Court found the renting of the downstairs unit was a change of use from the consent granted in 1982. The premises were found to be unlawful residential premises.
In the present case, when the landlord took possession of the premises, he assumed there was no legal impediment to occupation of the premises for residential purposes (section 36). However, by allowing the tenant to continue living in the home, the landlord did not comply with the rules of the District Plan and therefore was in breach of section 45(1)(c). Accordingly, I find that the premises were unlawful.
Under section 78A(3) and (4) there are a number of possible consequences that flow from such a finding, including repayment of rent paid. Because there is an application for rent arrears, I have considered Section 78A(3) and (4) below under “The landlord’s application”. The landlord’s application
Although the landlord did not file a formal cross-application for rent a rent summary showing has applied for rent arrears and has provided rent records. The tenant agreed at the hearing that she owed $13,000.
It was noted that the rent summary was incomplete and an updated one was filed showing that the rent owed was $15,800. The tenant had a further opportunity to reply to this but made no further comment on the rent arrears.
The landlord has established that the tenant owes $15,800 in rent arrears.
On several occasions the landlord offered to settle the disputes between the parties. He said he would not pursue the application for rent arrears if the tenant withdrew her claims. This was said at the hearing and reiterated in a submission filed after the hearing when the updated rent summary was filed.
As noted above, in a minute dated 7 August 2024 I gave the tenant a further opportunity, until 21 August 2024 to seek legal advice and/or negotiate a settlement of her claim, but nothing further was filed and neither party withdrew their claims.
Returning to the remedies for unlawful premises, section 78A says: (3) Despite anything to the contrary elsewhere in this Act,— (a) unless the Tribunal is satisfied that, having regard to the special circumstances of the matter, including the nature of the premises, it would be unjust not to make the order, the Tribunal must not order the tenant to pay to the landlord— (i) any sum found to be owing by way of rent in arrear; or (ii) any other sum by way of damages or compensation: (b) if the landlord has applied for termination on the ground of rent in arrear, the Tribunal may, but is not required to, make the order terminating the tenancy. (4) Without limiting the generality of section 77 or the nature or extent of orders that the Tribunal may make in accordance with this Act in relation to the matter,— (a)the Tribunal may order the landlord to pay to the tenant— (i) the whole of the sum found to have been paid by way of rent for the period for which the Tribunal is satisfied that the premises are or were unlawful residential premises; or (ii) an amount that is the sum referred to in subparagraph (i) less any amount that the Tribunal is satisfied, having regard to the special circumstances of the matter, including the nature of the premises, it is fair to deduct:
In Chen v Kumar, 6 the District Court referred to the parliamentary debates before the introduction of section 78A and quoted the following statement by the Hon Chris Faafoia: The problem ... was there was uncertainty about what happens to tenants who have rented premises that are unlawful ... minus then at the moment that the Tenancy Tribunal doesn’t have the ability to rule in these situations, ... so what this does here I think is, after a couple of High Court decisions known as Anderson and Parbhu, clearly clarify a conflict between the two court cases or court rulings there around unlawful residential premises.
Judge Clark noted that Anderson and Parbhu were two High Court cases: Anderson v F M Custodians Limited 7 and Parbhu v Want. 8 The reasoning in Anderson was that if there is a finding of unlawful premises, under s 137(4) all rental paid would need to be repaid to the tenant. In Parbhu Cooke J disagreed with the finding in Anderson on the basis a full refund of the rental paid was not consistent with the intention and purposes of the Act.
Following the enactment of section 78A, Parbhu was appealed to the Court of Appeal where it was concluded that Anderson failed to take into account the benefit derived from the premises which may be technically in breach of planning or consenting obligations but otherwise safe. 6 Above, note 5. 7 Anderson v F M Custodians Limited [2013] NZHC 2423, [2013] 15 NZCPR 123. 8 Parbhu v Want [2018] NZHC 2079.
In Chen v Kumar, there was evidence that the tenant loved the premises and would have loved to have stayed there. When he received a 90-day notice to leave, he was very upset and he decided to stop paying rent.
The Court found that although the premises were unlawful because there was no written notice in place to entitle the landlord to rent out the premises, in all other respects the premises were consented to be divided. The landlord had an honest belief they were entitled to use the unit as rental premises. The Court found that the landlord had incorrectly relied on a 1982 consent and information that had been provided to them when they purchased the property. That did not justify them in renting premises, but it is a factor when considering the special circumstances. The Court reduced the Tribunal’s order of $45,000 to $2000.
In the present case, the rent summary shows that from 3 June 2020 to 18 October 2023 the tenant paid $43,300 instead of the $59,100 she should have paid for that period.
In this case I find the following reasons are special circumstances and I make no order under section 78(4) for a refund or abatement of rent paid: a. The tenant had been living at the premises for 5 years before the landlord bought the property and raised no issue about the premises being unlawful. b. When the landlord bought the premises, he or his lawyers probably should have ensured that there was no impediment to renting the premises out but given the tenant had been living there for 5 years, it is not unreasonable that he expected there was no issue. c. The tenant lived at the premises for further 3 years and raised no issue about the premises being unlawful. d. There is no evidence that the premises were inherently unsuitable for residential purposes. 9 It is simply that under the District Plan, the premises were only to be occupied by an employee of the company because this is not a residential area. e. The rent was $300 a week until 15 June 2022 when it was increased to $400. As noted above, in email communication at the start of the tenancy, the landlord suggested that a fair market rent would be $500 to $550 per week 10 and proposed $425 a week. The tenant did not dispute that this would be a fair market rental. f. When the tenant expressed anxiety about a potential rent increase, the landlord suggested revisiting in 6 months. 9 Any compensatory or exemplary damages for the maintenance issues have been addressed above. 10 Despite being asked to, neither party provided evidence of a fair market rental of the property. g. At the hearing the tenant agreed that the rent was low. h. The tenant had the benefit of living in the premises for more than 3 years under the agreement with this landlord. i. Since March 2021 the tenant has been at least one week in arrears. j. Since August 2021 the tenant has been at least 21 days in arrears. At any time from then on, the landlord could have applied to the Tenancy Tribunal to terminate the tenancy. k. In June 2022, some two years after the landlord first suggested a rent increase, the rent was increased to $400. At that time the tenant owed $5650 in rent. She was more than 18 weeks in arrears. l. The landlord has allowed the tenant to continue to live in the premises, despite the arrears increasing to $15,800. m.I am satisfied that it suited the tenant to live in the premises for a low rent, irrespective of whether she was allowed to live there under the Council’s District Plan. n. The tenant raised no issue about the premises being unlawful until after she had vacated.
I also find these are special circumstances meaning that it would be unjust not to order the tenant to pay rent arrears under section 78A(3). In other words, she must pay the arrears.
I have considered whether the landlord, by not seeking to enforce the rent arrears, failed to mitigate his loss.
It is evident from the email and text communication that at times the tenant contacted the tenant about rent arrears. For example, in August 2021 when the tenant texted the landlord about the $1,200 she owed in rent, and asking for a payment plan, he replied, “Suggest you do what you can over this period. Do not cut yourself short”. In another text, “As far as rent goes, please relax. I am not too concerned at the moment. Look after your health and wellbeing.”
In an email from [Ms N] in January 2022 was “Please pay what you can and we will sort out a repayment plan this week for the arrears owing.” In another from December 2022, “As long as we keep track of what is owing, the pay as much as you can this week and start catching up from next week”, to which the tenant replied, “Thank you so much” and went on to explain arrangements with WINZ.
On 4 July 2023 the landlord contacted the tenant saying they had heard that she was moving out. The tenant replied explaining her circumstances. She said that WINZ was going to pay the rent arrears and needed some information from him. On 11 July the tenant followed up asking for the landlord’s contact details for WINZ. He told them to use the email address they were communicating on. On 3 August the tenant said in an email that the arrears were on her mind daily, and in another message that unfortunately WINZ would not pay her arrears. [Ms N] replied that suggesting that the tenant use WINZ for the bond and rent to help her get into a new property and they would sort out a payment plan for the rent arrears. She confirmed that the landlord was happy for the tenant to give whatever notice she needed, to be able to secure a new property.
This is not a case of a landlord simply allowing rent arrears to accrue and then applying for rent arrears at the end of a tenancy. It is evident that the parties were in communication about the rent arrears. The tenant was aware that she owed money. The landlord was tolerant of her circumstances. The landlord should not be penalised for extending some patience and understanding to the tenant. As noted above, from August 2021 the tenant was at least 21 days in arrears. At any time the landlord could have applied to have the tenancy terminated, but he allowed her time to pay.
It would be unjust to make any adjustment to the rent arrears owed.
Because both parties have had some success I have decided to order non- publication of their names.
There is no order for refund of the filing fee, given that the tenant has had only some success with her claims.

Tenancy Tribunal case 4881033 — Rent arrears

At a glance

Tenancy Tribunal case 4881033 — Rent arrears

At a glance

Award balance

Claims & awards

Order

Reasons

Are the premises unlawful?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Are the premises unlawful?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions