Published tribunal order
Tenancy Tribunal case 5021129 — Rent arrears
Decided 24 Jan 2025 · Published 24 Jan 2025 · Application 5021129
- Rent arrears
Party names are redacted in the official published order.
Order
- An application for suppression has been made in this case, and the Tribunal orders suppression of the landlord’s name and identifying details.
- Esera Kalolo must pay [The landlord/s] $27.00 immediately, as calculated in the table below:
Reasons
- The landlord attended the hearing by video conference.
- The tenant was telephoned on the phone number provided but the phone call went unanswered. I am satisfied the tenant was properly served with notice of the hearing. The hearing proceeded in his absence. Rent arrears
- The landlord has applied for rent arrears and has provided a rent statement to 18 September 2024 in support of the claim which he confirmed as true and correct.
- Where a party to a tenancy agreement breaches any provisions of the agreement or the RTA, the other party shall take all reasonable steps to limit 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. See section 49 of the Residential Tenancies Act 1986 (RTA).
- This means that that they must take actions to limit any loss from a breach by the other party. When rent arrears occur, a reasonable landlord will mitigate that loss by applying to the Tenancy Tribunal to have the rent arrears paid, or the tenancy terminated.
- Where rent arrears are accumulating, ordinarily, the Tribunal would expect to see an application being brought within around 6-8 weeks, 10 at the most. There is then usually a short period before the hearing can take place.
- In Huang v Ashworth [2024] NZDC 15726 the District Court confirmed there is a duty to mitigate for rent arrears. The Court confirmed the test of what the landlord ought to do to mitigate its loss is a factual one and depends on whether the landlord took all reasonable steps to mitigate its loss; and more particularly, whether it acted reasonably having regard to all the circumstances of the case. In Huang v Ashworth the Court reduced the rent arrears by a third to take into account a failure to mitigate loss.
- In Ho v Tenant [2024] NZTT 4875311, 27 August 2024, a recent decision in the Tribunal, the adjudicator, in applying Huang v Ashworth capped the rent arrears payable by the tenant to 12 weeks.
- At the hearing I raised my concern that the landlord had failed to mitigate their loss in respect of the rent arrears and outlined recent case law. The rent statement indicated there was weeks when the tenant did not pay rent, particularly in January 2024.
- The landlord indicated there had been communication regarding rent arrears. However I consider when the rent fell into arrears the landlord did not take any formal steps to mitigate its loss by serving the tenant with a 14-day notice to remedy the rent arrears and did not promptly apply to terminate the tenancy.
- The landlord claimed $8,400 for rent arrears.
- Having regard to the landlords’ failure to mitigate its loss. I consider that it is appropriate to cap the rent arrears at 12 weeks and make an order for rent arrears of $7,800 to the end of the tenancy.
- The landlord is holding the bond and I deduct the bond from the rent arrears ordered. Filing fee
- The landlord did not seek the filing fee. Suppression
- The landlord sought suppression and as the application is successful, I have made an order accordingly.