Published tribunal order
Tenancy Tribunal case 5120714 — Exemplary damages at 24 Helena Road, Hillcrest, Hamilton 3216
Decided 9 Mar 2025 · Published 9 Mar 2025 · Application 5120714
- Exemplary damages
Order
- At Home Property Management Limited Gregory must pay [The tenant/s] $513.50 immediately being $500.00 exemplary damages and half of the filing fee of $27.00.
- At Home Property Management Limited Gregory must pay $330.00 to the Bond Centre for the tenancy at 24 Helena Road, Hillcrest, Hamilton 3216 immediately.
- [The landlord/s] must pay [The tenant/s] $763.50 immediately being $750.00 exemplary damages and half of the filing fee of $27.00.
- [The landlord/s] must pay $935.00 to the Bond Centre for the tenancy at 24 Helena Road, Hillcrest, Hamilton 3216 immediately.
Reasons
- The hearing was attended by all parties: [The tenant/s], [The landlord/s] and Gregory Young for At Home Property Management.
- The tenancy agreement was signed on 28 April 2023, and the tenancy began on 03 May 2023. At the time of the hearing the tenancy was current.
- The tenant is [The tenant/s].
- The tenancy agreement was prepared by At Home Property Management. The tenancy agreement names the landlord as Maryanne and Frank Fransen. At Home Property Management is named as the Property Management firm and Agent.
- Landlord is defined in section 2 of the Residential Tenancies Act, 1986 (the “RTA”) and includes a prospective landlord, a former landlord and an agent of a landlord (not the complete list).
- I determine that both [The landlord/s] (and Frank Fransen) and At Home Property Management are landlords for the purposes of this application according to the definition in the RTA. The tenant’s claim
- [The tenant/s] claims the landlord has not lodged the bond with the Bond Centre within the required time.
- A landlord has an obligation to 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.
- Mr Jayarathne arrived in New Zealand with his family as immigrants in 2023 and began looking for a place to live. After making several applications Mr Jayarathne was accepted for a tenancy at the above address. He completed the required documentation and forwarded the documents along with a bond of $2,200.00 and one week’s rent, $550.00 to the property manager At Home Property Management. Subsequently he and his family moved into the property and settled down in New Zealand.
- By the time the above-mentioned documents and this payment were received, a dispute between At Home Property Management and the owner [The landlord/s] had arisen. The two parties decided they would not continue with the property management relationship.
- The details of the dispute between At Home Property Management and [The landlord/s] are not relevant to this application. Nor are they a matter that the Tenancy Tribunal has jurisdiction to determine. However, because the nature of the relationship between At Home Property Management and [The landlord/s] had changed from a management relationship to a tenant- finder relationship, At Home Property Management charged [The landlord/s] $1,265.00 finder’s fee for finding a tenant for this property and another, and completing documentation. At Home Property Management were not charging a finder’s fee under the management contract.
- Gregory Young confirmed that after receiving $2,200.00 bond and $550.00 for the first week’s rent from Mr Jayarathne, he deducted $1,265.00 for the finder’s fee that he calculated [The landlord/s] owed him and then forwarded the rest ($1,485.00 made up of $935.00 remaining from the bond and $550.00 for the first week’s rent) to [The landlord/s] with the tenancy documents and the bond lodgement form. He also sent instructions for [The landlord/s] to change the name of the landlord on the bond lodgement form from At Home Property Management to her own name.
- To prove the payments were made, Gregory Young produced a bank statement showing the payment of $935.00 being paid to M. Fransen, an ownership statement showing $550.00 being deposited in [The landlord/s]’s account, and his invoices for the finder’s fees amounting to $1,265.00 which he supplied to [The landlord/s]. These amounts total $2,700.00 which is the amount that Mr Jayarathne paid to At Home Property Management.
- [The landlord/s]’s oral evidence was that she only received $935.00 from Gregory Young. She was unable to produce any documents in support of this being the case.
- Having seen the documentary evidence in support of Gregory Young’s submissions, I prefer his version of what was paid and I determine that At Home Property Management paid $1,485.00 to [The landlord/s].
- In November 2023 At Home Property Management paid $935.00 to the Bond Centre in relation to this tenancy. Gregory Young stated during the hearing that he was unsure why this was done but it may have been an error. A confirmation letter from the Bond Centre was produced in support of this payment being made. This is the only money that has been lodged for this bond; [The landlord/s] confirmed that she did not lodge any money for the bond.
- During an inspection late in 2024, Mr Jayarathne was advised by [The landlord/s] that he would not be getting his full bond back at the end of the tenancy because only $935.00 had been lodged. Mr Jayarathne sought advice and made his application to the Tribunal. The landlords’ duties under section 19 RTA
- The dispute between At Home Property Management and [The landlord/s] appears to have clouded their judgement regarding their responsibilities as landlords.
- Section 19 of the Residential Tenancies Act, 1986 sets out the duties of a landlord on receipt of the bond. 19Duties of landlord on receipt of bond (1)Where any person pays to the landlord, or to any other person on behalf of the landlord, any amount by way of bond (whether the amount is for the whole or part of the bond), the following provisions shall apply: (a)the person who receives the payment shall forthwith give to the payer a written receipt, signed by that person, showing— (i)the address of the premises to which the payment relates; and (ii)the amount and nature of the payment; and (iii)the date of the payment; and (iv)the name of the payer (if known to the person who receives the payment): (b)the landlord shall, within 23 working days after the payment is made, forward the amount received to the chief executive, together with a statement of particulars in the approved form. (1A)Subsection (1) does not apply if a bond of 1 week’s rent or less is paid in respect of a boarding house tenancy. In that case, section 66D applies instead. (2)Failure to issue a receipt, or to forward any amount received, in accordance with this section is hereby declared to be an unlawful act. (3)A landlord who fails to comply with subsection (1) commits an infringement offence and is liable to a fine or an infringement fee specified in Schedule 1B.
- At Home Property Management received the full bond from Mr Jayarathne. When they received this, they were acting as the landlord. Their legal responsibility was to lodge this full amount with the Bond Centre within 23 days. The letter of the law does not permit a landlord to pass the bond onto another landlord in expectation that they will then lodge it with the Bond Centre, nor deduct expenses before doing so.
- [The landlord/s] received the balance of the bond after At Home Property Management’s expenses had been deducted and did not deposit this with the Bond Centre within 23 days, or indeed at all.
- The tenant’s claims are proved against each respondent. I find At Home Property Management has committed an unlawful act and I also find that [The landlord/s] committed an unlawful act. Exemplary damages
- 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.
- Because of At Home Property Management’s actions, Mr Jayarathne the tenant has been the put in the position of not having his money secured with the Bond Centre. Gregory Young believed he had a claim against [The landlord/s] and he put his own interests ahead of the tenant’s whose money he used to settle the claim.
- Having done this however, I note that he then forwarded the balance of the monies to [The landlord/s] explaining what he had done, and with the expectation that the full amount of the bond would then be lodged with the Bond Centre by her.
- The public has a right to expect landlords will act according to the law with tenant’s money. Tenants are dependent on it. This is particularly important with vulnerable tenants, such as new-immigrants who can be expected to not be familiar with New Zealand law, their rights, or how to enforce them.
- In the circumstances I consider exemplary damages of $500.00 is an appropriate amount to award against At Home Property Management for breaching section 19 of the RTA.
- [The landlord/s] was aware of the deficit in the money she received from At Home Property Management, and in her submissions today it appears she believed, correctly, that At Home Property Management did not have a right to deduct their expenses. It appears however that regarding her dispute with At Home Property Management, she sat on her hands and did not choose to resolve the dispute so that she could pay the full bond into the Bond Centre, whether the deficit came from her pocket or his.
- Whereas Gregory Young may have believed the dispute with [The landlord/s] was resolved, [The landlord/s] by her action of not making up the $1,265.00 deficit, demonstrated that she knew it was not.
- More than this however, for the next 18 months, and up to and including the present time, [The landlord/s] has not deposited any of the tenant’s money with the Bond Centre. Whereas At Home Property Management may have believed that the bond had been lodged, [The landlord/s] could not have been under any such illusions. For these reasons I find that [The landlord/s]’s level of culpability in breaching section 19 of the RTA is higher than At Home Property Management’s culpability. Because of this I award a larger amount of exemplary damages, $750.00 in total, against [The landlord/s] for her breach of section 19 of the RTA.
- At Home Property Management deducted $1,265.00 from the bond for payment of the fees they claimed against [The landlord/s]. Because they subsequently paid $935.00 to the Bond Centre, they still retain $330.00 of the tenant’s bond money. This must be paid into the Bond Centre.
- [The landlord/s] received $1,485.00 from At Home Property Management. $550.00 of this was for the first week’s rent and $935.00 was for a portion of the bond. This bond portion must be paid into the Bond Centre. Filing fee reimbursement
- Because [The tenant/s] has wholly succeeded in his claims against the landlords, I order reimbursement of the filing fee.