Published tribunal order
Tenancy Tribunal case 4909844 — Exemplary damages at ORDER
Decided 25 Oct 2024 · Published 25 Oct 2024 · Application 4909844
- Exemplary damages
- Rent arrears
- Property damage
Order
- must pay immediately,
- () to immediately. LandlordTenant Rent arrears$1,680.00 Exemplary damages: fail to appoint agent$300.00 Compensation: breach of right to quiet enjoyment$200.00 Exemplary damages: breach of HH obligations$3,500.00 Compensation: reimburse fixed water charges$440.49 Compensation: lawn mowing$280.00 Repairs: door$250.00 Total award$2,210.00$4,440.49 Net award$2,230.49 Bond$3,200.00 Total payable by Landlord to Tenant$2,230.49
Reasons
- Both parties attended the hearing.
- The tenants and two others entered into a residential tenancy agreement with the landlord for a term from 29 November 2022 to 1 August 2023.
- These tenants and the landlord then entered into a new fixed term tenancy for a term from 17 July 2023 to 17 July 2024.
- On 20 April 2024 the tenants advised the landlord of their wish to end the fixed term early. That was followed up with a notice by e-mail on 30 April 2024 confirming that request and asking that the landlord assist by advertising for new tenants.
- The tenants say they vacated at the end of May. The landlord says it was early June. The rent was paid to 9 June 2024.
- New tenants were found for the premises and the new tenancy started on 7 July 2024. The Claims
- The tenants filed their application on 8 June 2024. The claim has since been modified and as at the date of hearing the tenants are seeking a. $1,500.00 as exemplary damages for the landlord failing to appoint an agent while outside New Zealand for more than 21 days; b. $3,000.00 as compensation and exemplary damages for interfering with their privacy; c. $750.00 as exemplary damages for the landlord failing to provide Healthy homes information; d. $1,500.00 as exemplary damages for unlawful entry into the premises by the landlord; e. $7,200.00 as exemplary damages for the landlord failing to meet her Healthy Homes compliance obligations; f. $1,800.00 for the landlord interfering with the supply of services to the premises; g. $12,600.00 reimbursement for an illegal rent increase from 17 July 2023 to 2 June 2024 h. $440.49 for reimbursement of fixed water charges; i.$7,900.00 as compensation for unlawful advertising of the premises.
- The landlord filed across application on 14 July 2024 for: a.$3,360.00 for rent arrears; b. $390.00 as compensation for cleaning costs; c.$1,170.00 as reimbursement of lawn mowing costs d.$460.00 as compensation for repair of damage to a door e.$218.50 for advertising charges
- Each of the claims is addressed separately below. Failing to appoint agent
- There is no dispute that the landlord was out of New Zealand for more than 21 days during April and May 2024.
- The landlord says that an acquaintance and her son were close by and the tenants knew they were available to attend to matters on her behalf.
- Section 16A RTA requires that, "A landlord who is out of New Zealand for longer than 21 consecutive days must ensure that the landlord has an agent in New Zealand." It further requires that, "A landlord who appoints an agent under this section must, immediately after appointing the agent, a notify the tenant of the agents name contact address and address for service and be if a bond is held in respect to the tenancy, notify the Chief Executive in the approved form of those particulars.”
- I find it proved that the landlord did not meet those obligations.
- A breach of that obligation is an unlawful act for which exemplary damages of up to $1,500.00 may be awarded . The landlord has committed an unlawful act.
- Where a landlord has committed an unlawful act intentionally the Tribunal must consider whether it is just to award exemplary damages for that act, having regard to the criteria in s.109(3) RTA which are: a.the intent of that person in committing the unlawful act; b.the effect of the unlawful act; c.the interests of the party against whom the unlawful act was committed; and d.the public interest.
- The landlord's perspective is that she was contactable and able to actively manage the tenancy while overseas and no harm was caused to the tenants from her absence without a local agent being appointed.
- In this case see landlord was clearly aware that she would be away from New Zealand for more than 21 days. In an e-mail to the tenants dated 30 April 2024 she said, "I am away will back in four weeks time from the day I leave."
- When the landlord left without appointing an agent she was aware of the tenants' wish to end the fixed term early saying, "The fixed term tenancy stayed till it expired.”
- There was no apparent advertising of the property after the landlord’s departure until a Trade Me advertisement was placed on 17 June 2024 when she had returned. The tenants' evidence is that no contact was made with them by anybody appointed by the landlord to manage the tenancy in her absence and there were no open homes or other viewings of the premises by potential tenants during that time (there had been a viewing prior to the landlord’s departure but those potential tenants were not acceptable to the landlord).
- In those circumstances I consider that there was a breach of the landlord's obligations in circumstances that had actual negative effects on the tenants. My view of the evidence is that when the landlord left she intended to await her return before taking any further steps to consider renting the property, rather than having someone appointed locally to be able to deal with the tenancy as she was required to do.
- it would be just to make a modest award of exemplary damages to recognise the landlord having acted unlawfully in that regard Interfering with privacy slash unlawful entry
- These claims are related and concern the landlord accessing the premises with her own key without lawful reason or notice to the tenants.
- What the evidence shows is that after another occupant vacated, the landlord contacted the tenants to see if they were using the garage which the other occupant had been using and to ask whether she might use it. The tenants did not reply and say that in a subsequent telephone conversation with the landlord they told her they were not comfortable with the landlord using the garage. The landlord disputes this and says that consent was given.
- The correspondence also shows the landlord on several occasions contacting the tenants with requests for assistance to move furniture, provide printing services and other day-to-day matters.
- There is no evidence that the tenants brought to the landlord’s attention a concern that she was being overly familiar or accessing the property unlawfully. The landlord gave direct evidence that she had never used her key to access the interior of the premises, only the garage and associated tool shed.
- I do not find it proved that the landlord committed an unlawful act by entering the premises unlawfully.
- I do find that if the landlord claims an entitlement to use part of the premises that the tenants were paying rent for, there is an obligation on her to provide clear evidence of an agreement to that effect. The evidence provided does not go beyond showing her initial request, although the landlord rightly points out that there was also no evidence of the tenants objecting.
- The evidence satisfies me on balance that the landlord assumed entitlements to use of the garage that were beyond what the tenants had agreed. By doing so she caused interference with the tenants’ privacy and peaceful enjoyment of the premises to which they were entitled, that should be acknowledged by a modest award of compensation. Failure to provide healthy homes information
- Section 13A(1CA) requires that the landlord including the tenancy agreement a healthy homes compliance statement.
- The copy of the agreement provided by the tenants does not include such a statement. The landlord has produced a self-assessment and compliance statement which she says was included with the original tenancy agreement. The copy provided by the landlord is neither signed nor dated and omits information regarding the premises’ compliance with the draught stopping standard
- If that statement it was included with the original agreement it would substantially comply with the landlord’s obligations. The evidence does not prove on the balance of probabilities that the landlord failed to provide that information to the tenants. That claim is declined Compliance with healthy home standards
- Section 45(1)(bb) requires that a landlord complies with Healthy Homes standards. Failure to do so is an unlawful act for which exemplary damages of up to $7,200.00 may be awarded.
- A this was a private tenancy starting in November 2022, the premises were required to comply with HH standards 120 days after the tenancy began (see Schedule 1 to the Residential Tenancies (Healthy Homes Standards) Regulations 2019)
- The tenants had a Healthy Homes assessment completed on 6 April 2024 (“April HH report”).
- That assessment reports that the premises were: a. non-compliant with the insulation standard because although the insulation in the ceiling met minimum thickness standards, its placement needed to be “tidied up” to satisfy requirements; b. non-compliant with the heating standard because the existing heating device was not in good working condition to be able to produce heat and that it would need to be fixed or other heating installed; c. non-compliant with the moisture ingress and drainage standard because gutter cleaning was required and no moisture barrier was installed; d. non-compliant with the draught stopping standard because there were unreasonable gaps on the external door and some windows. e. Not compliant with requirements in respect of smoke alarms , noting “...there is no smoke alarm, need to install 3 to have all units within 3 metres of each bedroom door.”
- The landlord subsequently obtained a Healthy Homes assessment on 23 June 2024 (“June HH report”) confirming at the premises complied with Healthy Homes standards and with the requirements for smoke alarm installation.
- The landlord’s evidence is that there had always been compliant smoke alarms installed in the premises but that they must have been removed by the tenants before the April 2023 assessment was done. She says that the cleaner found smoke alarms while doing her cleaning work. The tenants deny having removed any smoke alarms during their tenancy.
- The ingoing inspection checklist attached to the tenancy agreement includes a statement of compliance for smoke alarm installation which the tenants have signed.
- That being so, there is an onus on the tenants to provide evidence proving breach of the landlord’s obligations. The report only confirms that the smoke alarms where not there when the inspection was done, not that they were absent through the tenancy. I do not find that breach proved.
- The April 2024 HH assessment proves breach of the landlord’s obligation to ensure that the premises met Healthy Homes Standards when required.
- The landlord has committed an unlawful act.
- I do not find it proved that breach of the insulation standard was intentional. The insulation material was appropriate but appears to have been moved at some point. It is not something the landlord would necessarily be expected to be aware of.
- The landlord’s evidence is that she explained to the tenants in detail how to use the pellet fire, which the June HH report says was able to provide sufficient heat to meet the standard, but that they chose not to use it.
- The tenant’s evidence is that no such information was given to them on the basis that the fire it would not be used. That position is consistent with the April HH report stating that at that time, the fireplace was not working. I find that to be an intentional breach.
- The landlord did not have the premises checked to see whether it met the draught stopping or other standards, relying on her own assessment and believing the premises already complied. It was an intentional decision to take that risk and the resulting breach of her obligations is also intentional.
- The landlord does not dispute that a ground moisture barrier was not installed as required by the Healthy Homes standards regulations. That is an intentional breach for the same reasons as set out in paragraph 45.
- Having regard to the s. 109 (3) criteria referred to above, relevant considerations are that: a. the landlord was aware of her obligations but chose to take the risk of having no assessment done of the premises’ compliance; b. the premises were non-compliant in a number of respects – though some to a relatively minor degree c. the tenants have given evidence of the premises being cold and of having no useable heating source provided. They say the gaps around joinery let in bugs as well as draughts; d. there evidence does not prove the tenants having brought concerns about the premises to the landlord’s attention; e. once the April HH report identified the premises’ lack of compliance. The landlord took steps to ensure they complied; f. there is a clear public interest in landlords taking seriously the obligation to ensure that that premises comply with those core requirements for habitability of rental premises.
- In those circumstance I find it would be just to make an award of exemplary damages that would be significant for one breach, noting that there were several. Interference with the supply of services
- The tenants’ claim is based on the landlord having encouraged them not to enter into their own electricity supply contract but simply to reimburse her for charges by Meridian through her account.
- Tenants are entitled to arrange their own electricity supply contracts. The evidence however does not prove that the landlord went beyond recommending that the tenants continue to use her account as opposed to preventing them from engaging an electricity supplier of their own choice.
- The tenants are concerned about a lack of transparency in terms of the electricity charges they were asked to reimburse the landlord for, but the evidence shows that the landlord provided them with the Meridian invoices sent to her, when passing the charges on. There is no dispute that those charges are for the supply of electricity metred only to these premises.
- Accordingly, while the tenants ought to have felt able to a contract their electricity supply wherever they chose, I do not find a basis for compensation proved. Unlawful rent increase
- Section 24 RTA, allows rent to be increased during a tenancy subject to certain conditions. One of those conditions is that, “....a landlord under a fixed term tenancy - may not increase the rent during the term of the tenancy unless permitted by the provisions of the tenancy agreement to do so and may do so only in accordance with this section and any such provisions of the tenancy agreement” Those restrictions include that the rent cannot be increased within 12 months from the commencement of the tenancy. (see s.24(1)(g) and (d).
- If the tenancy beginning on 17 July 2023 was, in substance, a continuation of the fixed term tenancy beginning on 29 November 2022, increasing the rent effective 17 July 2023 could be seen as an increase within 12 months of the commencement date, prohibited by s.24.
- The initial tenancy included four tenants, including these tenants. The tenancy beginning 29 November 2023 included only these tenants and is, in my view, substantively a different tenancy. My view that it is a newly negotiated tenancy, is reinforced by the fact that it began before expiry of the initial tenancy’s fixed term on 1 August 2023, so it does not appear to be a “rollover” of the prior agreement.
- That being the case, I do not find it proved that providing for a higher rent in the new agreement is an unlawful rent increase during the tenancy by the landlord. Fixed water charges
- It is not disputed that the tenants should be reimbursed fixed water charges paid by them in the sum claimed. Unlawful Advertising
- The tenants claim that they should be compensated for the landlord having advertised the premises on Trade Me as a 4 bedroom property when it only has 3 bedrooms, as shown by the advertising material when it was bought.
- While that may have some relevance to their claim regarding the landlord’s efforts to re-rent the premises, they had lived in the premises before entering into the current agreement so I do not find that of itself, to provide a basis for a compensation claim. Landlord’s Claims
- At the hearing, the landlord confirmed waiver of her claim for advertising charges. She also confirmed receipt of a payment from the tenants of $760.00 towards lawnmowing/ gardening charges. Rent Arrears
- There is no dispute that the rent was paid to 9 June 2024. The issue is whether the tenants were required to pay rent through to the date the new tenancy began on 7 July 2024.
- The starting point is that this was a fixed term tenancy. The tenants have breached their obligation to pay rent through to the end of the fixed term on 17 July 2024, so should compensate the landlord for any loss caused by that breach.
- Section 49 RTA however, requires that, “Where any party to a tenancy agreement breaches any of the provisions of the agreement or of this Act, the other party shall take all reasonable steps to limit the damage or loss arising from that breach, in accordance with the rules of law relating to mitigation of loss or damage upon breach of contract.”
- In these circumstances, that obligation requires the landlord to take reasonable steps to secure a new tenancy to limit the tenants’ liability for ongoing rent.
- The landlord did begin that process by having some initial viewings but declined to grant a tenancy to potential tenants who wanted to take a tenancy.
- The landlord then left the country for several weeks without appointing an agent locally to manage the situation, telling the tenants that they would need to see the fixed term through and without taking active steps to market the premises during that time. I find that to be a breach of the landlord’s obligation to mitigate loss.
- The landlord says that the premises could not be advertised or shown because the tenants had it in such a dirty state. That is not supported by the photographic evidence or by the evidence the potential tenants who had initially viewed the property were happy to take a tenancy of it.
- It would not be just to require the landlord to incur all of the loss resulting from the tenants’ breach. I find that it would be just to require the tenants to pay two weeks’ rent beyond the date to which rent was already paid. Lawnmowing charges
- It was agreed that the tenants would pay the charges for lawnmowing arranged by the landlord at $40.00 per 3 weeks.
- The landlord has provided evidence to show that she paid for 26 mows. She paid the contractor $45.00 each time but agrees that the arrangement was that the tenants would reimburse her $40.00 per mow. The tenants should therefore reimburse the landlord 26 x $40.00 = $1,040.00 – (already paid) $760.00 = $280.00 to pay. Cleaning
- At the end of the tenancy the tenant must leave the premises reasonably clean and tidy, remove all rubbish, return all keys and security devices, and leave all chattels provided for their benefit. See section 40(1)(e)(ii)-(v) Residential Tenancies Act 1986.
- The landlord says that the tenants breached that obligation and that she should be compensated for the $390.00 that she paid to her cleaner, as proved by the evidence provided.
- The tenants have provided a large number of photographs taken when they vacated that appear which show the premises in reasonable clean and tidy condition, The landlord has provide a very much smaller number of close up photographs showing a few areas where it appears more cleaning could have ben done.
- Viewing that evidence as a whole, while the tenants may not have left the premises in “market ready” condition for a new tenancy to begin, I do not find it proved that they breached their obligation to leave the premises reasonably clean and tidy.
- In making that finding I also take into account evidence from the tenants which appears to show that the premises were not particularly clean and tidy when the tenancy began. Damage
- The landlord claims compensation for damage to a door that she says was cause by the tenants having put adhesive stickers on it that lift the pain when being removed.
- A quote for removing the remaining stickers and repairing the damage has been provided, for $460.00. The repair work has not been done and the premises have been retenanted but the land rod says she will have to get the work done, which I accepts.
- The tenants’ evidence is that there was damage to that door when the tenancy began and the purposed of those stickers was to cover the existing damage. That damage is not noted on the entry inspection report.
- The photographs provided do appear to show some existing damage under where the stickers have been placed.
- I accept the landlord’s position that there will be a cost involved in removing those stickers and faxing the damage caused by their removal. It is also the case that the repair work will fix the pre existing damage that is not the tenants’ responsibility.
- I accordingly find that the tenants should make a contribution to the repair costs by not pay for all of it.
- No order is made in respect of the filing fee.