Published tribunal order
Tenancy Tribunal case 5038608 — Exemplary damages at 50 Binns Road, Karioitahi, RD 3, Waiuku 2683
Decided 19 Dec 2024 · Published 19 Dec 2024 · Application 5038608
- Exemplary damages
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 Tenant’s name and identifying details.
- The landlord is to pay the tenant the bond held of $640.00 immediately.
- In addition to order 2 the landlord is to pay the tenants $1577.00 immediately calculated in the table below.
Reasons
- Both parties attended the hearing held on the 17 December 2024. Background
- The tenants rented a tiny home from the landlords from the 2 February 2024 to 14 September 2024.
- The tenancy agreement was not in writing and signed by the parties but text messages between the parties confirm that the rent was $360.00 per week including water, power, internet and use of a shed.
- During a storm on the 29 May the tiny home fell on its side. The tiny home suffered damage to pipe work and guttering and had to be repositioned. The landlord paid for the tenants to stay in a motel for two nights whilst the home was repaired and reinstated.
- The tenants say that as a result of the home tipping over they lost furniture and belongings and food and seek compensation by the landlord for those costs.
- The tenancy ended because the landlord asked the tenant to pay for the power separately (the landlord proposed that a check meter be installed in the home). After receiving the request, the tenant gave four weeks’ notice.
- At the end of the tenancy the landlord retained $640.00 from the tenant’s bond for cleaning and other costs. The tenants disputed these costs being deducted.
- Both parties accept that before the issues with power and bond arose, the parties enjoyed a very good relationship (the landlord described it as a friendship) with each other. The tenant’s claims:
- The tenants claim: a. The landlord breached s13 (4) RTA by failing to provide a tenancy agreement in writing. b. The landlord breached s19(2) RTA by failing to lodge the bond. c. That the home was an unlawful residential premises because it did not have a building consent. d. The landlord breached s45 (1)(bb) RTA as the home did not comply with Healthy Homes Standards. e. That the landlord breached s 45(1)(c)RTA by failing to ensure that the home had a building consent and was compliant with the building act and code. f. That the landlord breached s45(1)(b) by failing to repair a leak in the shower.
- The tenant’s seek return of the bond, exemplary damages for failure to provide the tenancy agreement in writing, failure to lodge the bond, failure to maintain, failure to comply with the Healthy Homes standards and failure to comply with the building code.
- The tenants also seek compensation under s78A for the rent and damage to their furniture and belongings caused by the home tipping over.
- The landlords are first time landlords and the tenants first time tenants in New Zealand. Did the landlord breach s13(4) by failing to provide a tenancy agreement in writing?
- It is the landlord’s obligation to ensure that all tenancy agreements are in writing s13(1) RTA and that the landlord provides a tenancy agreement to the tenant before the tenancy begins s13(2) RTA. A failure by the landlord to do either of those requirements is an unlawful act of which exemplary damages of $750 may be awarded see s 13(4) RTA and schedule 1B RTA.
- The landlord says that they did not have a tenancy agreement signed because they believed that the tenants were not tenants but flatmates, because the tenants shared power, water and internet costs with them.
- Section 4 of the RTA provides that the RTA applies to every tenancy of residential premises, except as provided for in the Act. Section 5 sets out the exceptions. There is an exception for relocatable homes in s5(1)(tb) but the accommodation provided must be temporary or transient, which this was not. There is also an exception in s5(1)(n) where the premises continue to be occupied by the landlord/ owner or a member of their family. The tenants’ tiny home is a separate premise to that of the landlords. The tenants had exclusive possession of their home and the landlords had exclusion possession of their home.
- I am satisfied that none of the exclusions are applicable to this case and therefore the RTA applies.
- I am satisfied that the landlord did not supply the tenants with a tenancy agreement The landlord’s breached sections 13(1) and 13(2) of the Act, they committed an unlawful act pursuant to s 13(4) RTA.
- I award $100 in exemplary damages for this breach. This is a modest award that reflects the public interest in ensuring that all landlord’s turn their minds to tenancy agreement at the beginning of a tenancy. It is not lost on me that had the landlords and tenants signed a tenancy agreement then almost all of the problems complained about now would have been considered by the parties before the tenancy began. Did the landlord breach s19(2)RTA by failing to lodge the bond with the bond centre.
- A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received. See section 19(1) Residential Tenancies Act 1986.
- Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. See section 19(2) and Schedule 1A Residential Tenancies Act 1986.
- The landlord accepts that they did not lodge the bond, again they said that they did this because they thought that the tenants were their flatmates not their tenants. The landlord says that they kept the bond in a separate bank account which was labelled tenant’s bond. The tenants were assured that the bond was being kept until they left because the landlord told them that in a text.
- As the landlord did not lodge the bond they have committed a breach of s19(2) RTA.
- 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.
- In the case of TMT Zealand Limited TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182 the Judge said: “Parliament's intention would be subverted if landlords were able to escape consequences for the unlawful acts involved by claiming ignorance of the law." Para 37.
- I award the tenant exemplary damages of $250.00 for the landlord’s failure to lodge the bond, this takes into account: •The landlords’ culpability. •That the tenant knew the landlords had not and would not deposit the bond (because they told them in a text when they paid it) and the tenants did not question this. •That the tenant has been placed in an uncertain position because the landlord has not lodged their bond. •That it is in the public interest to deter landlord’s from failing to lodge bond. •That the bond is the tenant’s money, and the tenant should be protected from landlord’s raising claims against them and then claiming the bond. The lodgement of the bond with the Bond Centre, a third party, safeguards the tenant from being at the mercy of any claim the landlord wishes to make at the end of the tenancy.
Were the premises unlawful?
- The Tribunal may declare premises to be unlawful residential premises. See section 77(2)(ac) Residential Tenancies Act 1986. Residential premises are unlawful if they cannot be lawfully occupied for residential purposes, and the landlord has caused or contributed to the unlawful occupation by failing to comply with sections 36 or 45(1)(c) RTA. See section 78A(2) RTA.
- Where the Tribunal declares the residential premises to be unlawful, it must not make an order for rent arrears or compensation against the tenant unless, having regard to the special circumstances of the case, it would be unjust not to make the order.
- The Tribunal may order the return of all rent paid by the tenant, although it may deduct an amount from that sum if, in the special circumstances of the case, it would be fair to do so. The Tribunal may make any of these orders on its own initiative, even if the tenant has not applied for a particular order. See sections 78A(3)(a), (4) and (5) RTA.
- The tenants say that the premises are unconsented and are therefore unlawful. The landlords dispute this and say that the tiny home, being transportable does not need a building consent as it is 27m3. (9m x3m).
- The landlord says that the gas, water, sewerage and electricity are all easily connected to those utilities, that you don’t need to add additional fixtures or have the property attached by a plumber or electrician or gas fitter. The landlord says it is like a caravan, it has all the fixtures for simply plugging in. The landlord says that this is further supported by the landlord transporting the tiny home to another location on site before the tenancy and reconnecting the electricity, gas water and sewerage without any problems. The landlord did concede that he needed to reconnect pipe work after relocating the home.
- At the hearing I asked both parties what evidence that they had that would support their positions, the tenants say that they believe that the tiny home is 30m3 and that requires a consent and that any home that has bathroom or sewerage facilities needs a consent. The landlord says that they have spoken with the tiny homes people who built the tiny home and they have told them that the home does not.
- None of the parties produced witnesses who could speak to me with any expertise in this area. None of the parties themselves have any expertise in this area.
- The tenants obtained a LIM report that shows that there is no building consent for the tiny home. It is not disputed that if it needed one, then it does not have one.
- A “building” in the Building Act 2004 is defined as means a temporary or permanent movable or immovable structure. It includes a vehicle or motor vehicle (including a “vehicle” or “motor vehicle” as defined in s2(1) of the Land Transport Act 1998) that is immovable and is occupied by people on a permanent or long- term basis. Section 2 of the Building Act.
- There are no definitions of “immovable” or “occupied by people on a permanent or long-term basis” in the Building Act 2004. The Ministry of Business Innovation and Employment has a list of factors on its website that can be considered when trying to understand if the tiny house meets these criteria: Moveability factors: include whether the design enables the house to be moved or relocated with relative ease; whether it rests on wheels alone or is otherwise self-supported; whether it is connected to features that would need to be deconstructed to be moved e.g., foundations or decking; and whether it is connected to on-site services e.g., water, wastewater, or electricity. Permanent occupation factors: include whether the tiny house is used or intended for use for residential purposes and occupied by people, and whether there is an anticipated end-date to occupation. A tiny house used or intended to be used by people for business activities will also be considered as occupied by people (but would be unlikely to fall within the Tribunal’s jurisdiction as “residential premises”).
- A tiny house that meets the definition of a “building” does not necessarily need a building consent. Schedule 1 to the Building Act 2004 describes “building work” that does not require a building consent. In particular, single-storey detached buildings up to 10m² in floor area which do not include sanitary facilities or facilities for the storage of drinking water, do not include sleeping accommodation unless the building is used in connection with a dwelling, and do not contain any cooking facilities, are exempt. As are larger single-storey detached buildings exceeding 10m² but not exceeding 30m² which meet the same requirements, and, if they do include sleeping accommodation, have smoke alarms installed.
- Having considered all of the evidence carefully I am satisfied that the it is more likely than not that this tiny home would be considered a building as that term is defined in the Building Act 2004 because it is not easily moved (it has no wheels or trailer), it has attached water and waste water facilities and it is intended to be occupied for residential purposes for long term. It has its own kitchen, lounge area, bedroom and bathroom. It has parking and its own garden shed. The landlords have since the tenancy ended added a pergola and outside space.
- I also consider it more than likely that it needed a building consent because of the attachment to water and waste water facilities.
- As I have found that it does not have building consent, and it is a building then it is not lawfully able to be rented out as a residential dwelling and therefore the S78A applies. The landlord in moving the tiny home has likely breached s112 of the Building Act as well, as it is likely that the moving of the home needed a building consent. The landlord has committed a breach of s45(1)(c) RTA.
What is the remedy?
- There have been a number of appeal decisions on the quantum of awards made. On appeal the District Court has made it plain that when there are technical breaches, but that the tenant enjoyed the full use of the premises that they paid for that the amount award is small and notional to reflect the breach. 1 The amount awarded is not a ‘windfall’ for the tenant.
- Taking into account the following factors I award the tenants $1500.00. • That the tenants had full use of the tenancy (apart from the 2 days following the incident on the 29 May, where the landlord paid for them to be accommodated in a motel). • That if a building consent had been obtained it may have required steps such as anchoring, which would have prevented the home tipping on the 29 May. It is likely that if a building consent was applied for that the location and wind forces would have been considered and could have prevented the home tipping. • I therefore consider the tipping event on the 29 May and the consequences of it to be relevant to this determination. • In the 29 May event the tenants lost their fridge some belongings and their food in the fridge. • That it is incumbent on a landlord to ensure that all the requisite consents are obtained before the property is rented out. • That the tenants paid $400 for the LIM report. • That apart from the issues with the mould in the silicon, the house is a lovely modern home, and that there were no issues with sanitary facilities or other utilities. • The amount awarded reflects that the tenants had power, water, internet in their rent and that the tenants were only at the property for 8 months. • That the tenants were unaware of a potential breach until the dispute with bond occurred at the end of the tenancy and they were advised by Citizens Advice. The breach under section 45 (1)(c) RTA 1 Chen v Kumar [2022] NZDC 7783; Kemp v Elliott [2022] NZDC 17792; Johnson v Clements [2022] NZDC 20805;
- I have considered the breach of s45(1)(c) when making an award under s78A and therefore I make no award for the breach of s45(1)(c) as to do so would be to censure the landlord twice for the same issue. Did the landlord’s breach the Healthy Homes Standards?
- The tenants claim that the house breached Healthy Homes Standards and in particular that the floor was uninsulated. The landlord’s say that the whole home is made from insulated material including the floor and that the underfloor is also exempt as there is no gap between the floor and the ground.
- I am not satisfied that tenants have made out their claim that the house is uninsulated and that there has been a breach of s40(1)(bb) RTA .There is no space between the tiny home and the ground so it appears exempt. The tenants claim for a breach of the insulation standards is not proven and is dismissed.
- The tenant also claimed that the heating was inadequate for the space but did not provide any calculations that supported this position. The claim for breach of the heating standard is not proven and is dismissed.
- The tenant also says that the ventilation in the bathroom was inadequate, they say that they had to have the light on for the fan to work. That is disputed by the landlord. The tenants say that the inadequate ventilation allowed mould to grow. There is a mechanical extraction fan and window in the bathroom. This meets the standard and therefore the tenant’s claim for breach of the ventilation standard is not proven and therefore dismissed.
Did the landlord fail to maintain the shower?
- The tenants say that after the house tipped on the 29 May that the shower leaked because of the shower liner/ box had moved. There is a dispute about whether the landlord was aware of this specific issue. The tiny home’s manufacturers inspected it and wrote a report to the insurer and the claim and scope of work was accepted by the insurer. The tenant says he did tell the landlord of the problem, but the landlord says this was after the insurance works had been done.
- The tenant and the landlord both showed me a text where the landlord after an inspection of the tiny home, noticed the mould issue and raised it with the tenant. It was only when the landlord raised the issue that the tenant mentioned the leaking. The landlord asked to see the leak and get a better idea of what was wrong and quickly soon after repaired the leak with silicon.
- I am not satisfied that the landlord failed to maintain or repair the leak as I consider that they do so in a reasonable time after becoming aware of the leak. The landlord’s claims.
- The landlord has not filed a claim but at today’s hearing both parties agreed that I should also deal with the landlord’s claims for an extra day’s rent, cleaning, stain removal on the carpet, mould damage to the silicon and the additional power.
- As no rent summary was provided today, I do not award the landlord an additional day’s rent.
- The rent included the power, the landlord cannot unilaterally require the tenant to pay more for the power. Therefore, the landlord is not entitled to the $160 deducted for the power.
- The tenants say that the landlord inspected the property at the end of the tenancy and did not tell them that the property was not to standard. The tenant accepts that there was stain on the carpet and the oven was not cleaned.
- Tenants are required to leave the property in a reasonably clean and tidy condition at the end of the tenancy, this includes wiping all surfaces, cleaning the oven and if there are stains on the carpet removing the stains.
- The landlord provided photographs of the condition of the property, both as the tenant left it and after she had cleaned it.
- What is reasonably clean, and tidy is an “objective assessment to be made after consideration of all of the evidence” Ace Property Management Ltd v Owens DC Wellington CIV -2008-085-1441,17 December 2008.
- Reasonably clean means clean to the standard an average, reasonable bystander would consider reasonable 2 , not commercially clean 3 , spotless hotel or motel standard. 4 Reasonably clean is not necessarily to the standard a landlord considers acceptable for a new tenant. 5
- Having considered the evidence I am satisfied that the tenants did not leave the property reasonably clean and tidy, there were surfaces that required wiping, the oven needed cleaning and the carpet had a large stain in the bedroom which was removed by the stain removal. I award the landlord $300 for time, and products. This is commensurate with other awards that the Tribunal sees daily for this type of cleaning.
- I do not consider that the landlord has proven tenants caused the mould in the silicon. Mould can occur because of a defect in the building or from the way tenants live in the building such as inadequate ventilation or heating. I am not sure what has caused this mould or why it is only in the silicon. As I am not satisfied on the that it was likely that the way the tenants lived in the property caused the mould then the tenants are not liable for the mould and the landlord’s claim for mould is dismissed. Filing fee and name suppression 2 Housing New Zealand v Holloway TT Auckland TT215/93, 8 February 1993 at 8. 3 Mills v Kiwi Property Care Ltd TT Hamilton 09/01418/HN, 27 July 2009. 4 Richards v Scully TT Christchurch TT2043/98, 21 July 1998. 5 Ace Property Management Ltd v Owens DC Wellington CIV -2008-1441, 17 December 2008
- Because [The tenant/s] has substantially succeeded with the claim I have reimbursed the filing fee and granted them name suppression as requested.