What was Tenancy Tribunal case 4976780 about?

The tribunal order states: Panama Property Management Limited As Agent For The Estate Of Frank May

How much money was awarded in case 4976780?

Filing Fee: $27.00 awarded to tenant; Refund Rent Paid In Advance: $700.00 awarded to tenant

What type of tenancy dispute was case 4976780?

The dispute type was not classified.

Where can I read the official tribunal order for case 4976780?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10857737-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4976780 about?

The tribunal order states: Panama Property Management Limited As Agent For The Estate Of Frank May

How much money was awarded in case 4976780?

Filing Fee: $27.00 awarded to tenant; Refund Rent Paid In Advance: $700.00 awarded to tenant

What type of tenancy dispute was case 4976780?

The dispute type was not classified.

Where can I read the official tribunal order for case 4976780?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10857737-Tribunal_Order_Redacted.pdf.

Unit/Flat 6, 208 Jackson Street, Petone, Lower Hutt 5012 Tenancy Tribunal Case 4976780 — Tenancy dispute

Claims and awards in Tenancy Tribunal application 4976780 — net $727.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Refund rent paid in advance	$700.00	Refund rent paid in advance
Filing fee reimbursement	$27.00	Filing fee reimbursement
Net award	$727.00
Total payable by Landlord to Tenant	$727.00

Claims and awards in Tenancy Tribunal application 4976780 — net $727.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Refund rent paid in advance	$700.00	Refund rent paid in advance
Filing fee reimbursement	$27.00	Filing fee reimbursement
Net award	$727.00
Total payable by Landlord to Tenant	$727.00

Order

Panama Property Management Limited As Agent For The Estate Of Frank May must pay [The tenant/s] $727.00 immediately, calculated as shown in the table below:

Reasons

Both parties attended the hearing with Mr Bulwer representing the property management company and Mr Nolan representing the owner.
The tenant claims that the landlord must reimburse her $700 paid as one week’s rent in advance on the basis that a tenancy agreement of the premises was not concluded under the Residential Tenancies Act 1986 (RTA).
The landlord claims that a verbal tenancy agreement was concluded but the tenant later reneged on the agreement. They claim that they are entitled to retain the first week’s rent of $700 as a deposit on the basis that it was paid in consideration for the landlord withdrawing the premises from Trade Me and to stop any further viewings. As a result of the tenant not proceeding with the tenancy, they claim that they may keep the deposit to compensate for the costs incurred to readvertise the property for let; any administration costs to let the property, and loss of rent until the premises are let.
The issues to determine are whether there is a concluded tenancy agreement between the parties and whether there is any basis on which the landlord may retain one weeks rent paid.
For the RTA to apply, a contract, namely a tenancy agreement, must be established. This can be in writing or oral. However, a promise or agreement is generally not considered to be a legally binding contract and enforceable unless the following apply: a. There must be an offer; b. There must be unequivocal acceptance.; c. There must be certainty of the key provisions of the agreement; d. There must be consideration, which is something of value provided by each side; and e. Intention to create legal relations. Background facts and evidence
The timeline of events and messages between the parties are summarised as follows: 3 August 2024: The tenant viewed the property with Mr Bulwer; 5 August: The tenant emailed the landlord expressing interest in applying to be a tenant, offering to pay bond, and rent in advance; 7 August: The tenant met with Mr Bulwer and Mr Nolan. They discussed the premises and negotiated the rent that would be payable. The landlord also says that they agreed to a 12-month fixed term and a start date of 13 August. At the end of the meeting, they all shook hands, and the landlord believes they had reached agreement. The tenant says she did not agree to a fixed term and believed that there was a verbal offer to let the premises subject to her viewing the terms of the written tenancy agreement and accepting them. 7 August: Mr Bulwer sent the tenant an email after the meeting recording “We just need you to fill out the tenancy application please. Then we will get a letter of offer to you plus the tenancy agreement...” 8 August at 6.57 am: Email from the landlord to the tenant enclosing the application form. The landlord advised that they needed it back so they can process it and stated: “....We then do an offer letter, but we have offered it to you verbally.” The landlord also stated: “Until we receive the first week’s rent, we cannot take the advertisement off Trade Me ....If we do a viewing then any possible tenant will be looked at etc & could be offered the property. If you want to pay 1 weeks rent, then please do so. Then we can remove the property from Trade Me and stop taking enquiries etc..” 8 August at 11.10am: The landlord sent a text saying that if the tenant wanted the apartment, they would need the application form and first weeks’ rent paid that day otherwise they would have to do viewings and continue to take enquiries for the property. 8 August at 3.43pm: The tenant paid the $700 to the landlord as requested and advised by email that no application form had been emailed to her for completion. It was later sent to her. 10 August: The landlord sent a text chasing up the application form from the tenant stating: “Not sure how serious you are re this property. We need the application form as cannot do anything until we get it.” The tenant sent the completed application later that evening. 11 August: The landlord emailed the tenant enclosing the offer letter. The letter contained the following statement: “To secure the property you will need to make payment of the first week’s rent immediately (this is non-refundable)..” 12 August: The landlord emailed the draft tenancy agreement. 12 August: The tenant emailed the landlord advising that she was unable to commit to the apartment as it was not made clear to her that it would be a fixed term contract and there were some terms of the contract that she was not happy about and considered that she could not live with comfortably. She requested the return of her deposit. 13 August: The landlord advised that they could not offer a refund as they now had to readvertise the property; they only removed it from Trade Me because the tenant indicated she wanted the property and paid the deposit; other potential tenants were not pursued; and it could take 3-4 weeks to rent causing the owner to suffer a loss of rent.

Is there a tenancy agreement?

After carefully considering the evidence including the parties’ oral evidence and submissions, I find that a binding and enforceable tenancy agreement was not concluded between the parties. While the parties met on 7 August to discuss the premises, the rent rate payable and a proposed move-in date, I am not persuaded that all the elements of a binding and enforceable contract were present when the meeting ended. In subsequent correspondence, the landlord specifically stated that the tenant needed to complete an application form first, and only after that was done, they would send an offer and the tenancy agreement for signing. This was reinforced several times in the communications. In his first email on 8 August, Mr Bulwer referred to the landlord making a verbal offer at the meeting. He does not suggest in any of his emails that a contract had already been agreed and nor was there any suggestion that the subsequent paperwork was simply a formality to record an agreement already reached orally.
While the tenant paid the first week’s rent of $700 which ensured that the landlord withdrew the premises from Trade Me she said that she felt pressured to do so. I accept that Mr Bulwer’s texts exerted pressure on the tenant to pay the first week’s rent to hold the property and prevent viewing to other potential tenants. However, that cannot be taken as an unequivocable acceptance of any verbal offer that was made at the meeting. The tenant said that the tenancy was still subject to her seeing and reviewing the details of the tenancy agreement and accepting the terms. Her evidence in that regard is supported by the subsequent messages from Mr Bulwer. Even after the tenant paid the landlord $700, Mr Bulwer sent an email urging the tenant to complete the application form noting he could not do anything until it was received.
The letter of offer dated 11 August states: “To secure the property you will need to make payment of the first week’s rent immediately (this is non- refundable). Please pay the amounts below so we can start your paperwork....By paying the deposit you confirm acceptance of this offer.” Of course the tenant was encouraged to pay the first week’s rent before the written offer was made and she was not told that it was non-refundable. The payment cannot be taken as acceptance of the offer when that was not communicated to her. Even had she accepted the offer by paying the deposit, I am satisfied that she still needed to agree to the terms of the tenancy agreement that she had not seen. Therefore, the elements of a binding contract were still not satisfied.
The tenant had indicated that she wanted a long-term tenancy of 12 months or more, but she did not understand that the landlord required a fixed term as stated in the offer and the draft tenancy agreement. She was also concerned about other clauses in the contract that she could only have small dinner parties and restrictions on wall fixings.
In summary, I find that the landlord made a written offer of a tenancy on 11 August which was not accepted by the tenant. Any verbal offer made by the landlord at the 7 August meeting was subject to the tenant completing an application, the landlord confirming the offer in writing and providing a copy of the proposed tenancy agreement. I find that any indication by the tenant that she would accept the offer of a tenancy at the 7 August meeting was also subject to her receiving the written offer and draft tenancy agreement for approval and acceptance.

Is the landlord entitled to compensation?

The landlord requested that the tenant pay the first week’s rent to show that she was serious about the tenancy, and on that basis they said that they would stop advertising and showing the property for let. Given that there is no tenancy, the landlord is not entitled to retain a rent payment in advance because it is not needed for rent.
The landlord tried to assert in the offer letter and at the hearing that the rent payment was non-refundable and was in consideration for the landlord ceasing to advertise and show the property for let. However, the landlord did not advise the tenant that this fee was non-refundable before the payment was made. Therefore she did not agree to pay the sum on those terms. She also stated that she would not have paid the sum on those terms.
There is no other basis which would allow the landlord to retain the payment. The RTA prohibits a landlord from requiring tenants (which includes prospective tenants) from paying key money or letting fees. Mr Bulwer assured me that the funds were not letting fees or key money. However, the reasons given for retaining the funds included to cover the costs of readvertising the property. The landlord is not entitled to retain money from a tenant to cover its administration costs or expenses incurred in relation to the granting of a tenancy. Such a payment would be akin to a letting fee or key money which is prohibited. See sections 17 and 17A RTA and the definitions of ‘key money’ and ‘letting fee’ in section 2: key money means any sum of money demanded by way of fine, premium, foregift, reimbursement of expenses, administration charges, or otherwise as consideration for the grant, ............. of a tenancy agreement, ..........; but does not include any sum payable or paid by way of rent or bond letting fee— (a) means any fee or charge (however described) in respect of services rendered by the letting agent or any other person that relate to— (i) the grant, continuance, extension, variation, or renewal of any tenancy agreement;
There is provision in section 17(4) RTA that allows the landlord to require or receive a sum for an option to enter into a tenancy agreement, if the sum does not exceed 1 week’s rent payable under the agreement and provided that upon the option being exercised, the sum is refunded or is applied toward the rent. However, nowhere in the communications with the tenant prior to her paying $700, does the landlord advise the tenant that the $700 is a non-refundable fee for an option to enter the tenancy agreement. It was clearly identified as the first week’s rent. Therefore, the tenant did not agree to pay for an option.
In summary, there was no tenancy agreement between the parties and no basis on which the landlord is entitled to retain one week’s rent paid in advance. The landlord must refund the rent payment of $700 to the tenant.
Because the tenant has wholly succeeded with her claim she is entitled to suppression of her name and identifying details and to reimbursement of the filing fee.

Tenancy Tribunal case 4976780 — Tenancy dispute at Unit/Flat 6, 208 Jackson Street, Petone, Lower Hutt 5012

At a glance

Award balance

Tenancy Tribunal case 4976780 — Tenancy dispute at Unit/Flat 6, 208 Jackson Street, Petone, Lower Hutt 5012

At a glance

Award balance

Claims & awards

Order

Reasons

Is there a tenancy agreement?

Is the landlord entitled to compensation?

Topics & place

Residential Tenancies Act sections

Frequently asked questions

Claims & awards

Order

Reasons

Is there a tenancy agreement?

Is the landlord entitled to compensation?

Topics & place

Residential Tenancies Act sections

Frequently asked questions