Published tribunal order
Tenancy Tribunal case 4913713 — Exemplary damages at 19A Brewster Street, Bluff Hill, Napier 4110
Decided 25 Jul 2024 · Published 25 Jul 2024 · Application 4913713
- Exemplary damages
Party names are redacted in the official published order.
Order
- A request for suppression has been made. In terms of s.95A(1) the tenants are entitled to suppression of their identifying details. The grounds for suppression of the landlord’s details are not established.
- Sheron Macgregor must pay [The tenant/s] $2,880.44 immediately, as shown in the table below.
Reasons
- Both parties attended the hearing.
- This was a periodic tenancy that began on 19 November 2023 and ended on 11 June 2024. Bond
- The tenants paid a bond of $360.00 when the tenancy began. It was not lodged with the Bond Centre.
- The landlord repaid $250.00 of the bond after the tenancy ended but has retained the balance.
- The tenants have applied for refund of the remaining bond. The landlord has not filed a counterclaim with Tenancy Services.
- Section 22B(2) Residential Tenancies Act 1986 provides that, where a tenant applies for refund of the bond, and the landlord seeks payment from the bond, the landlord must file an application setting out the details of the counterclaim.
- Because the landlord has not filed a counterclaim the remaining bond is refunded in full to the tenants. That does not prevent the landlord bringing a compensation claim. It means the bond must be released to the tenants in the meantime.
- [The tenant/s]
- The landlord accepts that the bond was not lodged with the Bond Centre. The landlord has thereby 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.
- The landlord acknowledges being aware that she is legally obliged to lodge a tenant’s bond. She says that because she has had negative experiences in the past accessing bond money she believed she was entitled to, she chose not to lodge it. The evidence shows that she has made the same choice in respect of multiple other tenancies of these premises.
- I take into account that most of the bond was refunded and that reasons were given by the landlord for withholding the rest. However, by keeping the part of the bond the landlord believed she was entitled to, requiring the tenant to bring this application, the landlord assumed a power over the tenants’ bond money that she was not entitled. Those actions illustrate the importance of bonds being independently held.
- The bond amount was not a large sum. Otherwise, it is difficult to find mitigating factors in the landlord’s calculated decision not to comply with her lawful obligations. There is an obvious public interest in dissuading landlords from doing so.
- A significant award of exemplary damages is appropriate for that breach. The Agreement
- It is not disputed that the landlord failed to provide information that she was required to provide to the tenants in the agreement.
- That information includes: • a signed insulation statement • a signed Healthy Homes compliance statement • an insurance statement.
- In each case, breaching the obligation without a reasonable excuse is an unlawful act for which exemplary damages may be awarded up to a maximum of $750.00. See section 45(1AD) and Schedule 1A Residential Tenancies Act 1986.
- I find the landlord has have committed an unlawful act.
- The landlord says that she was not really aware of the obligation to provide that information. That however provides limited mitigation. Those obligations have been well publicised and the landlord has put in place multiple tenancies since those obligations were imposed.
- The evidence does not show that the tenants have suffered direct loss as a result of the landlord’s breach or that different decisions would have been made by them had that information been provided.
- In a sense, the landlord’s breaches can be seen as a single breach of her obligation to provide a compliant agreement.
- In my view, an award of exemplary damages that would be significant for a single breach, would recognises that, while also acknowledging that, as a result, multiple unlawful acts were committed. Healthy Homes compliance
- During this tenancy the premises were required to comply with the Healthy Homes standards prescribed in the Residential Tenancies (Healthy Homes Standards) Regulations 2019 (“HH Regulations”).
- Breaching that obligation is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A).
- The HH regulations prescribe standards for: • Heating • Insulation • Ventilation • Draught stopping • Moisture and drainage
- The tenants say that the premises did not comply with those standards.
- The landlord says that the premises were refurbished in 2016 and the insulation was made compliant at that time. A free standing 1500W heater was provided to the tenants which she believes meets her obligations. She acknowledges that there is no mechanical extraction in the kitchen, which she is now arranging to have installed. She acknowledges that there is no mechanical extractor in the bathroom but says that is not required because it would not be reasonably practical to install one and there is an opening window in the bathroom.
- The evidence does not show what the required heating capacity for the main living room is, however the premises are what the landlord described as a small bed-sit. For a heater to be a qualifying heater it must be “installed as a fixture to the premises” (see Reg 9). That is not the case here, so I find that the heating standard is not met.
- The evidence does not prove a breach of the insulation standard.
- Failure to provide mechanical extraction in the kitchen without an applying exemption means that the premises do not comply with the ventilation standard. The evidence does not allow me to make a finding as to whether the premises are exempt from the requirement to install mechanical extraction in the bathroom.
- Evidence given at the hearing about the extent of the draughts in the premises, which the tenants attempted to address by applying draught stop tape around windows and use of a draught stopper provided by the landlord at the base of the door, persuade me that it is more likely than not that the premises did not comply with the draught stopping standard.
- The evidence does not prove a breach of the moisture and drainage standard.
- By failing to ensure that the premises met three of the five Healthy Homes standards, the landlord has committed an unlawful act.
- In considering whether an award of exemplary damages would be just and applying the criteria in s.109(3) noted above, I take into account the following factors.
- The tenants point to their having had a young baby in the premises who they say was often unwell for no obvious reason. They now wonder whether that may have been related to the healthiness of the premises. There is no evidence of a link or of such concerns having been raised with the landlord by the tenants or by [one of the tenants’ mothers], who gave evidence at the hearing.
- The landlord says that she was not made aware that there would be a baby living at the premises and had she known, she would not have agreed to the tenancy. The requirement is however that the premises meet health standards prescribed as suitable for habitation, there is no lesser standard for tenants without children.
- The evidence is that the tenants were intending to move from the premises to a larger residence, as they had another child on the way. Their decision to end their tenancy of these premises, does not seem to have been because of their discomfort in living there.
- The rent paid for the premises was modest, so the landlord’s gain from renting out premises that were not Healthy Homes compliant, was also modest.
- Again, the public interest requires that landlords be aware of and comply with their obligations to ensure that premises they earn rent from, are suitably fit for occupation to current standards.
- Here, the landlord failed to meet that obligation and as a result there was some but not an extreme, negative impact on the tenants’ use and enjoyment of the premises. The landlord herself gave evidence about the presence of mould, which is unlikely to have been helped by non-compliance with standards designed to help tenants keep premises warm.
- Weighing those considerations, I find that a modest award of exemplary damages would be just.
- Because the tenants have been substantially successful I reimburse the filing fee.