What was Tenancy Tribunal case 5334592 about?

The tribunal order states: The tenant’s name and identifying details must not be published.

How much money was awarded in case 5334592?

Property Damage: $562.50 awarded to tenant; Property Damage: $1,125.00 awarded to tenant; Property Damage: $500.00 awarded to tenant; Filing Fee: $28.00 awarded to tenant; Rent Reduction For Unlawful Premises…: $5,535.21 awarded to tenant; Smoke Alarms: $1,000.00 awarded to tenant

What type of tenancy dispute was case 5334592?

The primary dispute was Exemplary damages. Related themes: Smoke alarms.

Where can I read the official tribunal order for case 5334592?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/13381269-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 5334592 about?

The tribunal order states: The tenant’s name and identifying details must not be published.

How much money was awarded in case 5334592?

Property Damage: $562.50 awarded to tenant; Property Damage: $1,125.00 awarded to tenant; Property Damage: $500.00 awarded to tenant; Filing Fee: $28.00 awarded to tenant; Rent Reduction For Unlawful Premises…: $5,535.21 awarded to tenant; Smoke Alarms: $1,000.00 awarded to tenant

What type of tenancy dispute was case 5334592?

The primary dispute was Exemplary damages. Related themes: Smoke alarms.

Where can I read the official tribunal order for case 5334592?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/13381269-Tribunal_Order_Redacted.pdf.

5B Morpeth Place, Blockhouse Bay, Auckland 0600 Tenancy Tribunal Case 5334592 — Exemplary damages

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5B Morpeth Place, Blockhouse Bay, Auckland 0600 Tenancy Tribunal Case 5334592 — Exemplary damages | TenantCheck

Claims & awards

What this tenancy cost at tribunal — claim, category, amount, and party awarded, with reconciled net total.

Claims and awards in Tenancy Tribunal application 5334592 — net $10,550.71 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Rent reduction for unlawful premises @ 7.5	$5,535.21	Rent reduction for unlawful premises @ 7.5
Exemplary damages for no written TA	$562.50	Exemplary damages for no written TA
Exemplary damages for not lodging bond	$1,125.00	Exemplary damages for not lodging bond
Exemplary damages for having no agent	$500.00	Exemplary damages for having no agent
Exemplary damages – smoke alarm breach	$1,000.00	Exemplary damages – smoke alarm breach
Repay bond (not lodged	$1,800.00	Repay bond (not lodged
Filing fee reimbursement	$28.00	Filing fee reimbursement
Net award	$10,550.71
Total payable by Landlord to Tenant	$10,550.71

Claims and awards for application 5334592 — net $10,550.71 NZD. Verify on MoJ.

Rent reduction for unlawful premises @ 7.5

Amount: $5,535.21
Awarded to: Tenant
Reason: Rent reduction for unlawful premises @ 7.5

Exemplary damages for no written TA

Amount: $562.50
Awarded to: Tenant
Reason: Exemplary damages for no written TA

Exemplary damages for not lodging bond

Amount: $1,125.00
Awarded to: Tenant
Reason: Exemplary damages for not lodging bond

Exemplary damages for having no agent

Amount: $500.00
Awarded to: Tenant
Reason: Exemplary damages for having no agent

Exemplary damages – smoke alarm breach

Amount: $1,000.00
Awarded to: Tenant
Reason

Dismissed claims

Other Claims — All other claims dismissed

Claim types — money lines allowed on this order

Exemplary damages Filing Fee Replace Smoke Alarms

Order

The tenant’s name and identifying details must not be published.
Mallikarjun Kalia and Ruchi Kalia must immediately pay [the tenant] $10,550.71, calculated as set out in the table below.
The claims are allowed as set out below. All other claims are dismissed. DescriptionTenant Rent reduction for unlawful premises @ 7.5%$5,535.21 Exemplary damages for no written TA $562.50 Exemplary damages for not lodging bond $1,125.00 Exemplary damages for having no agent$500.00 Exemplary damages – smoke alarm breach$1,000.00 Repay bond (not lodged)$1,800.00 Filing fee reimbursement$28.00 Total amount landlords must pay the tenant$10,550.71

Reasons

ON RESERVED DECISION

I heard this matter at the Auckland District Court on 3 March 2026.
The tenant attended with a friend who acted as a representative.
Counsel, Ritvik Roop of Corban Revell, attended for the landlord. Background
The landlords are a married couple. They bought the entire property at 5B Morpeth Place in August 2009. At the time of purchase, the house was single-storeyed and had one kitchen, a dining room, two bedrooms, and a carport. The unit was not present.
About seven years later, in early 2016, the landlords did major reconstruction work which added a storey to the rear of the house. Auckland Council issued a Code Compliance Certificate dated 11 July 2026 that describes the work as follows: Description:RBW – New two storey addition with single internal access garage, workshop, bathroom, lounge and dining, new kitchen, bathroom and bedroom to existing
The CCC does not specify what is downstairs and what is upstairs (that would have been set out in the building plans which the parties have not submitted to the Tribunal). However, it can be stated with confidence the CCC did not approve of a separate household unit downstairs. Rather, it approved for downstairs: an internal garage and a workshop but did not include any bedrooms. It is not clear whether the downstairs had a bathroom already, had a bathroom included as part of the CCC, or had a bathroom at all at the date the CCC was issued.
The landlords did further work after the CCC was issued, which created the separate downstairs unit the subject of these proceedings, but this work was not consented. In November of 2019, the landlords advertised the downstairs unit for rent. The unit had the following characteristics: a. The original 2016 stairs remained but the upstairs was blocked off from the downstairs. b. The external tilt-a-door garage door and its internal runners remained, but the entry was gib-boarded over internally, and the garage door motor removed. c.The garage was converted to be used as a bedroom. d. The garage was partially divided by a wall running about two-thirds the garage’s width. e. The former workshop area was set up as an open plan living/dining/laundry/kitchenette room. f.The kitchenette consisted of a long bench along a wall with a sink, a washing machine, and a rangehood, but it had no inbuilt stove or oven (the tenant used a plug-in stove). g. There was a separate bathroom. 1
The tenant and his wife viewed the premises in November 2019 and agreed to rent the premises. The landlords treated the tenancy as “informal” did not provide a written tenancy agreement.
The tenancy began on 3 January 2020. The rent was initially set at $420.00 per week, which included water and power. On 26 November 2021, the landlords increased the rent to $440.00 per week. The original tenancy ended on 13 May 2022.
The tenants began a new tenancy at the premises on 2 February 2023 after their new home was impacted by the Auckland Anniversary downpours. On this occasion, the tenants paid the landlords $450.00 for rent, power, and water. On about 3 January 2024, the landlords left to live overseas, and the tenant took possession of the whole house with an agreed rental of $950.00 per week. The tenant lived with his wife upstairs and sublet the downstairs unit out for about $560.00 per week.
When the landlords moved overseas in early 2024, they did not appoint an agent.
During the tenancies, the tenant lived in the premises with his wife. They had no children at that time.
After the tenant moved out, he saw the house advertised on Trade Me as a three- bedroom house with a weekly rent of $1,020.00. The downstairs being described as having: Second living area Kitchenette 1 large rumpus room (currently being used as bedrooms) 1 bathroom 1 As mentioned, it is not clear whether the landlords added a bathroom to the downstairs at the time of the consented work, there already was a downstairs bathroom, or the landlords added the bathroom after the CCC was issued. Open to a large private deck... Separate entry
The tenant was dismayed to see the premises described as having only three bedrooms because he was led to believe it had five. His displeasure led him to investigate that issue and other anomalies. He now claims before the Tribunal that: a. The landlords failed to lodge his bonds. b. The landlords failed to provide him with a written tenancy agreement, and that being so, did not include in the tenancy agreement a Healthy Homes compliance statement or an insurance statement. c.The landlords did not comply with their smoke alarm obligations. d. The landlords did not appoint an agent when they were overseas. e. The unit was an unlawful premises. f.The landlords misrepresented the whole house as a five-bedroom home.
For remedy he seeks compensation, exemplary damages, and refund of his rent payments.

Did the landlords fail to lodge the bond?

Landlords must submit any bond payment to the Bond Centre within 23 working days after the payment is received. 2
Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. 3
The tenant paid the landlords bonds and have not returned his current bond of $1,800.00.
The landlords accept they failed to lodge the bond within the requisite time for any of the tenancies.
The landlords submit they thought because the tenancies were “informal” they did not have to lodge the bond. Mr Lingampalli states: 4
I acknowledge that I did not seek legal advice prior to proceeding with the tenancy arrangement. I always considered this arrangement to be informal in nature. 2 Residential Tenancies Act 1986 (RTA) s 19(1). 3 RTA s 19(2) and Schedule 1A. 4 Mr Lingampalli’s statement dated 2 March 2026.
On this basis, I did not proceed with many of the statutory and regulatory obligations on landlords who lease their premises. I acknowledge that no rental agreement was provided, nor was there any Healthy Homes Statement. I always understood this to be an informal living arrangement between acquaintances as opposed to a formal tenancy.
Section 109(3) of the RTA provides that 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.
Before considering whether it would be just to award exemplary damages against the tenant, I must first decide whether the landlords committed the unlawful act intentionally. 5
The landlords advertised this unit for rent as a separate dwelling. The tenant says the landlords admitted to him that they had other rental properties. He says consequently, the landlords would have been aware of their bond obligations.
Harrop DCJ recently said in similar circumstances (where a landlord committed the unlawful acts of failing to provide insulation and insurance statements): 6 The obligation to provide these documents are fundamental obligations on landlords which it appears Mr Hu was not fully aware of despite there being included in the Act since 2016 and 2019 respectively. Like all citizens, corporate or otherwise, he and his company are deemed to know the law and on that basis a failure to provide these fundamental documents is properly seen as intentional. Parliament’s intention would be subverted if landlords were able to escape consequences for the unlawful acts involved by claiming ignorance of the law.
The rule that the landlord must lodge the bond on receipt is fundamental and widely known. There is a natural and logical inference that the landlords intentionally failed to lodge the bond. There is nothing before me to disturb that inference.
I am satisfied that the landlords’ failure to lodge the bond was intentional.
The effect of the unlawful act is that it tends to threaten the integrity of the system for bond collection. Tenants and the public are entitled to trust the system will protect client funds. The funds are needed to help fund tenancy services. The bond is the tenant’s money; it is not the landlord’s money. The unlawful act may amount to fraud.
It is in the tenants’ interests that she is awarded exemplary damages. 5 See for example, Chief Executive, ex parte Edmondson v Walls North Shore TT548/92, 29 June 1993 at 20. Approved in Birch v Otautahi Community Housing Trust [2020] NZDC 17667 at [38]. 6 T.M.T v Sweeney & Sundahl [2021] NZDC 16182 at [37].
The public interest calls for an award of exemplary damages. It is important to promote trust in the integrity of the bond system. Strict compliance is to be encouraged, which means non-compliance should be deterred by orders of exemplary damages.
For these reasons I find it would be just to award exemplary damages.
The Tribunal does not have the power to order exemplary damages for the first tenancy because the application was lodged more than 12 months after the termination of the tenancy. 7
For the latter tenancy (the landlords’ obligation being a continuing one), the Tribunal orders the landlords to pay three-quarters of the maximum available for exemplary damages, which amounts to $1,125.00. The landlords’ failures to provide written tenancy agreements?
The landlords accept that they failed to provide the tenants with written tenancy agreements in respect to the tenancies.
Section 13 of the Residential Tenancies Act 1986 (RTA) requires landlords to ensure the tenancy agreement is in writing, signed and a copy provided to the tenant prior to the tenancy commencing.
Breaching this obligation is an unlawful act, for which the Tribunal may award exemplary damages up to a maximum of $750.00. 8
Naturally, since the landlords provided no written tenancy agreement, they also breached their duties for providing certain information in the tenancy agreement, including a healthy homes compliance statement and an insurance statement. Breach of those duties also carry exemplary damages for breach up to a maximum of $750.00.
Applying the reasoning discussed above, I find the landlords have committed the unlawful acts intentionally.
Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied that 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. 9 7 RTA s 109(2)(a). At that time, $1,000.00 was the maximum available for exemplary damages. 8 See s 13(4) and Schedule 1A of the Residential Tenancies Act 1986 (RTA). 9 RTA s 109(3).
Similarly, under s 109 of the Act, the Tribunal cannot order exemplary damages for breaches committed more than 12 months prior to the application was filed. Therefore, the Tribunal does not have the power to order exemplary damages for the first tenancy. For the latter tenancy, the duties being continuing ones, exemplary damages are available.
The Tribunal has the power to award up to three times $750.00 because there are three breaches. However, I consider the breaches encompass one actus reus so it would be inappropriate to order cumulative exemplary damages.
Having regard to the statutory factors, I consider three-quarters of one of the maxima is apposite. I order $562.50.

Did the landlord breach their smoke alarm duties?

Under s 45(1)(ba) of the Residential Tenancies Act 1986 landlords must comply with all requirements in respect of smoke alarms set out in the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016. Clause 5(6) of the Regulations requires: (6) There must be at least 1 qualifying smoke alarm installed— (a) in the sleeping space; or (b) otherwise at the premises within 3 metres of the entrance (or main entrance) to the sleeping space.
Under clause 5(2) “[t]he requirements must be met at the commencement of the tenancy and at all subsequent times during the tenancy”. Under clause 7(1)(a) the smoke alarms must “be fully operational and otherwise in full working order, with no faults, defects, or damage”.
The premises had a smoke alarm, but it was not within three metres of the bedroom’s entrance. The landlords breached their duties and committed an unlawful act.
The tenant and his wife were put at greater risk than they should have due to the landlords’ breach. The landlords lived in the same building, so suffered similar risk from a fire that was not detected before it took hold. Thankfully, there was no serious fire, and the tenant did not experience tangible harm consequently.
The maximum for exemplary damages is $7,200.00. The Tribunal orders the landlords to pay the tenant $1,000.00 for exemplary damages having regard to the statutory factors. The landlords’ failure to appoint an agent
A landlord who is out of New Zealand for longer than 21 consecutive days must ensure they have an agent in New Zealand. The landlords accept they have been overseas for longer than the Act permits without appointing an agent. 10
Breaching this obligation is an unlawful act, for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. 11
As the landlords did not appoint an agent, they have committed an unlawful act.
The landlords’ have more than one rental property. They are deemed to know the law and it is likely they did. The failure was intentional.
It is just to do order exemplary damages having regard to the landlord’s intent, the effect of the unlawful act, the interests of the tenant, and the public interest.
The Tribunal orders the landlords to pay exemplary damages of $500.00.

Were the premises unlawful premises?

The landlords converted the downstairs into a separate household unit. They did not obtain any consents for that conversion. Legal principles – unlawful premises
The Tribunal may declare premises to be unlawful residential premises under s 77(2)(ac) of the Residential Tenancies Act 1986 (RTA).
Under s 78A(2) of the RTA, 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: os 36 of the RTA (take all reasonable steps to ensure that, at the commencement of the tenancy, there is no legal impediment to the occupation of the premises for residential purposes); or os 45(1)(c) of the RTA (comply with all requirements in respect of buildings). 10 RTA s 16A(1). 11 RTA s 16A(6) and Schedule 1A.
Where the Tribunal declares the residential premises to be unlawful, it 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. 12
Relevantly for this case, household units may not be divided into smaller household units without fulfilling change of use rules which involve Council issuing a Certificate of Code Compliance. Section 115(1) of the Building Act 2004, provides: 115 Code compliance requirements: change of use An owner of a building must not change the use of the building,— (a) in a case where the change involves the incorporation in the building of 1 or more household units where household units did not exist before, unless the territorial authority gives the owner written notice that the territorial authority is satisfied, on reasonable grounds, that the building, in its new use, will comply, as nearly as is reasonably practicable, with the building code in all respects... Discussion – were the premises unlawful
The landlord relied on a 2016 Code Compliance Certificate. The CCC does not fully describe the detail of the work. That is not surprising. One usually needs to delve into the application for building consent and accompanying plans to unravel what was consented and signed off.
The parties have not submitted a copy of the property file for the premises which probably would have contained that detail. What can be said with confidence is that the downstairs unit which is the subject of these claims had no Council approval as required by s 115 of the Building Act. It follows, the unit was an unlawful premises.
That being so, the Tribunal must consider whether to order a rent reduction and if so in what amount. Rent reduction: legal principles
Where the Tribunal finds premises are unlawful residential premises under s 78A(4) of the RTA, it may order the landlord to (i) repay the tenant all the rent they paid; or (ii) a lesser amount of rent repayment that it finds fair having regard to the special circumstances of the case, including the nature of the premises.
I consider that s 78A(4)(ii) should apply to this case because applying s 78A(4)(i) would be unfair to the landlord. 12 RTA, s 78A(4)(a).
The Court of Appeal in Parbhu 13 disparaged a sledgehammer response of a full rent reduction in response to “relatively footling” breaches: The effect of relying on that provision is that any relatively footling breach by a landlord (for instance, the incomplete planning or building consenting of an otherwise eminently safe and sound accessory unit) ...would compel total restitution of rent paid regardless of the degree of benefit.
Consistently with these comments in Parbhu, any rent repayment the Tribunal orders should be proportionate to the seriousness of the breach. At the more serious end of the scale are premises that are virtual hovels, such as an unconsented converted garage that leaks and is infested by vermin. At the other end of the scale where there is a minor building consent irregularity, but the premises are “eminently safe and sound” a full rent reduction is not called for.
Recent District Court cases illustrate the approach that should be taken. In Chen v Kumar 14 the premises had been consented for use as a rest home (upstairs) and a residence for the past owner and family (downstairs). Originally, the rest home and residency were not physically divided, but before the tenancy began someone blocked access between the upstairs and downstairs to create two separate residential units. The landlord, Mr Chen, was convinced that he could lawfully rent the downstairs premises out. The Tribunal found however, the premises were unlawful and ordered about 30 per cent of the rent be returned to the tenant, which amounted to $45,000.00.
In the District Court, Judge DJ Clark agreed with the Tribunal that the premises were unlawful. However, he considered that on the facts as he found them, the rent reduction must be drastically reduced. Importantly, Mr Kumar very much wanted to stay in the premises and the premises were not “unsafe”: [95] Furthermore, Mr Kumar and his family enjoyed the occupancy of a premises and received the full benefit of those premises throughout the course of the tenancy. He wanted the tenancy to continue. I do not accept then the unit is necessarily “unsafe” given Mr Kumar’s enjoyment of the same. Arguably it falls into the category contemplated by the Court of Appeal as being technically in breach of planning or consenting obligations but otherwise could be safe. Certainly, until February 2021 Mr Kumar thought so as he wanted to remain there. [96] The Tribunal ordered Anemax (and now the landlord through my order) to pay Mr Kumar the sum of $45,000 (being a 30% reduction on the total rent paid). For the reasons set out I quash that order given that I find Mr Kumar had the full benefit of the premises during the tenancy, which including a discount during the period of construction. 13 Want v Parbhu & Patel as Trustees of the Impala Trust [2019] NZCA 674 at [31]. See also While v Moffitt [2026] NZHC 490. 14 Chen v Kumar [2022] NZDC 7783.
His Honour reduced the rent to be refunded to $2,000.00. That amount also took account of rent arrears of $3,165.71 (which the Tribunal had also declined to order). The District Court rent reduction of $2,000.00 amounts to about 3 per cent of the total rent paid. 15 If the $3,165.71 arrears are factored in the reduction is about 7.5 percent. 16
In Kemp v Elliot 17 the premises’ passed its final inspection which found the build to have been completed fully with the building consent. The final inspection report recorded that Council should issue the CCC upon the landlord paying the appropriate application fee. Kemp was therefore the factual exemplar of “the incomplete planning or building consenting of an otherwise eminently safe and sound accessory unit.”
The Tribunal had ordered 30 per cent rent reduction (based on findings of fact that the District Court did not adopt), which resulted in a refund rounded up to $20,000.00. 18 However, Judge D J Clark quashed the Tribunal’s order and substituted an order for a rent reduction of $2,000.00. That figure amounts to a rent refund of about 3 per cent.
In Johnson v Clement 19 Judge D J Clark heard an appeal involving a granny flat. The Tribunal found the premises became unlawful premises only after the landlord moved away from the main house so that the RTA s 5(1)(n) exclusion ceased to apply. The Tribunal ordered a rent reduction at the rate of $25.00 per week. The weekly rate was modest, but the total amount ordered for rent reduction was $10,500.00 because the tenancy had lasted 12 years.
His Honour found that the breach leading to the unlawfulness was technical. He relevantly for this decision, observed at [38] and [48] of his decision: 20 [38] [In Chen v Kumar] I agreed with the Tribunal the premises were unlawful premises, 15 however I held the Kumar’s were provided with premises which were otherwise safe and sanitary, and compliant in terms of healthy homes standards. On that basis, I found “special circumstances” existed justifying a reduction in the refund of rental which was ordered to be paid by the Tribunal. I reduced the refund of rent from an award of$45,000 down to an award of $2,000, the $2,000 reflecting the breach of s 78A of the RTA in the circumstances of that case. ... [42] The reason why these premises were “unlawful” was because Mr Johnson was no longer entitled to claim the premises were exempt under s 5(1)(n). That is a breach of the 15 The rent due to 9 March was $66,874.29. 16 The rent due to the end of the tenancy was $68,445.71. 17 [2022] NZDC 17792. 18 The total rent due to the end of the tenancy was $63,607.14. 19 [2022] NZDC 2085. 20 The High Court in While v Moffitt [2026] NZHC 490 approved of this passage at [69]. Act but is technical. The purpose of s 78A is to prevent landlords from offering premises which fail to meet the statutory and regulatory thresholds of safe and sanitary housing. However, a balance needs to be applied between premises which are safe and sanitary but are unlawful because of a technical breach. Each case will need to be determined on its own merits because clearly there will be many instances where premises will be unlawful because they are not safe and sanitary.
His Honour found that the breach was like that in Kemp v Elliot and that the Tribunal’s refund of rent should be reduced to the sum of $2,000. 21 Discussion
I must carefully weigh what amount of rent it is fair to deduct. The RTA does not specify the “special circumstances of the case” I must have regard to except for “the nature of the premises”. Other special circumstances that are relevant in this case are: 22 a. The parties’ knowledge of the breach and reasons for entering the tenancy. b. The tenant’s reasons for bringing the claim. c.The benefits the parties received. d. The seriousness of the regulatory breaches making the premises unlawful. e. Other orders the Tribunal will make and avoiding disproportional orders. f.The purposes of discouraging tenancies of unlawful premises and ensuring landlords do not unfairly profit from unlawful premises. The nature of the premises
These premises had: a. A separate entry. b. A bedroom with a walk-in wardrobe area leading to the main bedroom area (converted from the internal garage). c.An open plan living, dining, kitchenette room which included a bench going along one wall containing a sink, washing machine, and plug-in stove, and a living and dining space. d. A bathroom. e. Stairs into the open-plan living area that led upstairs but had been blocked off. 21 At [44]. 22 See Janet Robertshawe’s 2019 conference paper, The Legacy of Anderson v FM Custodians: Section 78A Tenancies.
The premises were in a renovated part of the landlord’s own home. The unauthorised conversion work included sealing the garage door internally (but not removing the garage door or its internal tilting structural elements) to create a bedroom.
The conversion work done to a fair standard. The Tribunal has not heard evidence otherwise. The tenant must have generally enjoyed living in the premises or he would not have returned. However, unlike Kumar, Chen, and Clement the original garage and the workshop were not meant to be slept in or used as a living room when approved. Although, the converted garage may have been lawfully usable as a bedroom in conjunction with the main house it is unlikely that this construction would have received a CCC for use as a separate dwelling.
The kitchenette had no oven, so it did not comply with reg 7(2) of the Housing Improvement Regulations which requires “adequate means of preparing food and of cooking food, both by boiling and by baking”.
The tenant believes that he suffered from more noise than he ought due to lack of soundproofing that the Code would have required if the unit had been properly consented and signed off. Also, the premises would not have met fireproofing separation regulations. The parties’ reasons for entering the tenancy and their knowledge of the breach
The landlords’ principal motive for renting the premises would have been to generate income for themselves.
The tenant wanted a safe and healthy place to live.
The landlords knew the premises was unconsented for use as a separate household unit. The tenant did not. The tenant’s reasons for bringing the claim
The tenant saw the landlords’ advertisement of the premises as having only three bedrooms. He later realised the extent of the landlords’ breaches.
He feels taken advantage of and believe the landlords overcharged him and seeks vindication for being the victim of the landlord’s non-compliance. The benefits the parties received from the tenancy
The landlords received rent for the tenancy.
The tenant had the benefit of a premises that were habitable and safe, but unbeknownst to him the premises were not consented as a separate household unit and would not have achieved a CCC for want of an oven, fireproofing between the different household units, and retention of the garage door and its internal structure on the bedroom ceiling. 1 The seriousness of the breaches underlying the unlawfulness
The non-compliance meant the premises were less safe and - due to the nature of the garage conversion and lack of an oven - had less amenity than they should have.
Significant building work would have been required for the premises to comply with the Building Code so that it could lawfully be used as a separate premises. The work here was done in the modern era and was not in conformity with the Code. It is not a situation where the unconsented work was historical and would have complied with the rules existing at the time of construction.
While the premises were adequate, landlords should not deliberately overlook what Council requires of them for premises to be lawfully rented out as separate premises. The premises was below the standard of the relevant Code. There is an underlying element of “cheating the system” where landlords circumvent building regulations to make profit for themselves. Other orders and factors
The rent reduction ordered must take account of other orders so that the totality of the order does not become excessive. The Tribunal often uses a percentage of the weekly rent to quantify the appropriate rent reduction, but the District Court has found that care should be taken to ensure that the reduction does not become disproportionately high simply because a tenancy’s duration is longer than another similarly unlawful tenancy. 23
The tenant abandoned a claim for the landlord failing to maintain the premises. The smoke alarm breach is of a different kind. Therefore, there is no other relevant order that must be factored in.
I have regard to the need to avoid the rent reduction order becoming disproportionately high. 23 For example, in Harding v Caroto [2023] NZDC 4981 at [45]. Unfair profit and the public interest
Section 78A addresses a concern that landlords do not unfairly profit from unlawful premises and there is a public interest in discouraging tenancies of unlawful premises.
This calls for the rent reduction to be set at a level that deters and landlords from running the risk of renting out unlawful premises by depriving them of any unfair rental profit. Conclusion
I conclude the landlords should repay the tenant 7.5 percent of the rent the tenant paid for the two tenancies during which he occupied only the downstairs unit. That amounts to $5,535.21.
I have double-checked whether that outcome is fair. I have stood back and reconsidered the factors discussed above against the final figure I have arrived at and had regard to the Courts’ decisions cited in this decision. The outcome is fair and accords with authority. I order accordingly.

Did the landlords misrepresent the premises as a five-bedroom home?

The tenant submits: 24
Unfair and Misrepresented Rent Charges The premises were advertised and represented as a fully consented dwelling, and rent of $950 per week was charged for a 5 bedroom house, however the owners agents then advertised the property for 3 bedroom only and reduced the advertised rent from $1020/ week to $750 weekly. Comparable lawful rent for the premises was $750 per week. The excess rent was charged on the basis of misrepresentation, supported by the advertisement attached (Annexure E), engaging sections 13 and 78A RTA.
Damages may be ordered for misrepresentation under s 35 of the Contract and Commercial Law Act 2017, which provides: 35 Damages for misrepresentation 24 Submission 5b Morpeth (1) If a party to a contract (A) has been induced to enter into the contract by a misrepresentation, whether innocent or fraudulent, made to A by or on behalf of another party to that contract (B),— (a) A is entitled to damages from B in the same manner and to the same extent as if the representation were a term of the contract that has been breached...
When the tenant took over the whole house, he rented out the downstairs unit (two bedrooms) for about $560.00 per week including utilities. The tenant occupied the upstairs area (three bedrooms) with his wife.
The tenant had lived in the downstairs unit for years before he took over the whole house. I am not satisfied that the landlords made any misrepresentation as to the number of rooms that were usable as bedrooms. It would not make sense for them to make any representation as to the number of bedrooms because the tenant was acquainted with the premises.
Moreover, the tenant did not suffer any loss requiring damages. He rented out the downstairs unit for more than he had paid. He has not refunded anything to his tenant.
This claim is dismissed. Filing fee
The landlords must reimburse the tenant for the filing fee because he has substantially succeeded with the claim. 25 Non-publication
The Tribunal must, on the application of a party that has wholly or substantially succeeded in proceedings, order that the party’s name or identifying particulars not be published, unless the Tribunal considers that publication is in the public interest or is justified because of the party’s conduct or any other circumstances of the case. 26
The tenant has substantially succeeded in his claim. I do not consider that despite that publication is in the public interest or is justified by the tenant’s conduct or any other circumstances of the case. 25 RTA s 102(4)(b). 26 RTA s 95A(1).
It follows, the Tribunal orders non-publication of the tenant’s name and identifying details.

Claims & awards

What this tenancy cost at tribunal — claim, category, amount, and party awarded, with reconciled net total.

Claims and awards in Tenancy Tribunal application 5334592 — net $10,550.71 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Rent reduction for unlawful premises @ 7.5	$5,535.21	Rent reduction for unlawful premises @ 7.5
Exemplary damages for no written TA	$562.50	Exemplary damages for no written TA
Exemplary damages for not lodging bond	$1,125.00	Exemplary damages for not lodging bond
Exemplary damages for having no agent	$500.00	Exemplary damages for having no agent
Exemplary damages – smoke alarm breach	$1,000.00	Exemplary damages – smoke alarm breach
Repay bond (not lodged	$1,800.00	Repay bond (not lodged
Filing fee reimbursement	$28.00	Filing fee reimbursement
Net award	$10,550.71
Total payable by Landlord to Tenant	$10,550.71

Claims and awards for application 5334592 — net $10,550.71 NZD. Verify on MoJ.

Rent reduction for unlawful premises @ 7.5

Amount: $5,535.21
Awarded to: Tenant
Reason: Rent reduction for unlawful premises @ 7.5

Exemplary damages for no written TA

Amount: $562.50
Awarded to: Tenant
Reason: Exemplary damages for no written TA

Exemplary damages for not lodging bond

Amount: $1,125.00
Awarded to: Tenant
Reason: Exemplary damages for not lodging bond

Exemplary damages for having no agent

Amount: $500.00
Awarded to: Tenant
Reason: Exemplary damages for having no agent

Exemplary damages – smoke alarm breach

Amount: $1,000.00
Awarded to: Tenant
Reason

Dismissed claims

Other Claims — All other claims dismissed

Claim types — money lines allowed on this order

Exemplary damages Filing Fee Replace Smoke Alarms

Order

The tenant’s name and identifying details must not be published.
Mallikarjun Kalia and Ruchi Kalia must immediately pay [the tenant] $10,550.71, calculated as set out in the table below.
The claims are allowed as set out below. All other claims are dismissed. DescriptionTenant Rent reduction for unlawful premises @ 7.5%$5,535.21 Exemplary damages for no written TA $562.50 Exemplary damages for not lodging bond $1,125.00 Exemplary damages for having no agent$500.00 Exemplary damages – smoke alarm breach$1,000.00 Repay bond (not lodged)$1,800.00 Filing fee reimbursement$28.00 Total amount landlords must pay the tenant$10,550.71

Reasons

ON RESERVED DECISION

I heard this matter at the Auckland District Court on 3 March 2026.
The tenant attended with a friend who acted as a representative.
Counsel, Ritvik Roop of Corban Revell, attended for the landlord. Background
The landlords are a married couple. They bought the entire property at 5B Morpeth Place in August 2009. At the time of purchase, the house was single-storeyed and had one kitchen, a dining room, two bedrooms, and a carport. The unit was not present.
About seven years later, in early 2016, the landlords did major reconstruction work which added a storey to the rear of the house. Auckland Council issued a Code Compliance Certificate dated 11 July 2026 that describes the work as follows: Description:RBW – New two storey addition with single internal access garage, workshop, bathroom, lounge and dining, new kitchen, bathroom and bedroom to existing
The CCC does not specify what is downstairs and what is upstairs (that would have been set out in the building plans which the parties have not submitted to the Tribunal). However, it can be stated with confidence the CCC did not approve of a separate household unit downstairs. Rather, it approved for downstairs: an internal garage and a workshop but did not include any bedrooms. It is not clear whether the downstairs had a bathroom already, had a bathroom included as part of the CCC, or had a bathroom at all at the date the CCC was issued.
The landlords did further work after the CCC was issued, which created the separate downstairs unit the subject of these proceedings, but this work was not consented. In November of 2019, the landlords advertised the downstairs unit for rent. The unit had the following characteristics: a. The original 2016 stairs remained but the upstairs was blocked off from the downstairs. b. The external tilt-a-door garage door and its internal runners remained, but the entry was gib-boarded over internally, and the garage door motor removed. c.The garage was converted to be used as a bedroom. d. The garage was partially divided by a wall running about two-thirds the garage’s width. e. The former workshop area was set up as an open plan living/dining/laundry/kitchenette room. f.The kitchenette consisted of a long bench along a wall with a sink, a washing machine, and a rangehood, but it had no inbuilt stove or oven (the tenant used a plug-in stove). g. There was a separate bathroom. 1
The tenant and his wife viewed the premises in November 2019 and agreed to rent the premises. The landlords treated the tenancy as “informal” did not provide a written tenancy agreement.
The tenancy began on 3 January 2020. The rent was initially set at $420.00 per week, which included water and power. On 26 November 2021, the landlords increased the rent to $440.00 per week. The original tenancy ended on 13 May 2022.
The tenants began a new tenancy at the premises on 2 February 2023 after their new home was impacted by the Auckland Anniversary downpours. On this occasion, the tenants paid the landlords $450.00 for rent, power, and water. On about 3 January 2024, the landlords left to live overseas, and the tenant took possession of the whole house with an agreed rental of $950.00 per week. The tenant lived with his wife upstairs and sublet the downstairs unit out for about $560.00 per week.
When the landlords moved overseas in early 2024, they did not appoint an agent.
During the tenancies, the tenant lived in the premises with his wife. They had no children at that time.
After the tenant moved out, he saw the house advertised on Trade Me as a three- bedroom house with a weekly rent of $1,020.00. The downstairs being described as having: Second living area Kitchenette 1 large rumpus room (currently being used as bedrooms) 1 bathroom 1 As mentioned, it is not clear whether the landlords added a bathroom to the downstairs at the time of the consented work, there already was a downstairs bathroom, or the landlords added the bathroom after the CCC was issued. Open to a large private deck... Separate entry
The tenant was dismayed to see the premises described as having only three bedrooms because he was led to believe it had five. His displeasure led him to investigate that issue and other anomalies. He now claims before the Tribunal that: a. The landlords failed to lodge his bonds. b. The landlords failed to provide him with a written tenancy agreement, and that being so, did not include in the tenancy agreement a Healthy Homes compliance statement or an insurance statement. c.The landlords did not comply with their smoke alarm obligations. d. The landlords did not appoint an agent when they were overseas. e. The unit was an unlawful premises. f.The landlords misrepresented the whole house as a five-bedroom home.
For remedy he seeks compensation, exemplary damages, and refund of his rent payments.

Did the landlords fail to lodge the bond?

Landlords must submit any bond payment to the Bond Centre within 23 working days after the payment is received. 2
Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. 3
The tenant paid the landlords bonds and have not returned his current bond of $1,800.00.
The landlords accept they failed to lodge the bond within the requisite time for any of the tenancies.
The landlords submit they thought because the tenancies were “informal” they did not have to lodge the bond. Mr Lingampalli states: 4
I acknowledge that I did not seek legal advice prior to proceeding with the tenancy arrangement. I always considered this arrangement to be informal in nature. 2 Residential Tenancies Act 1986 (RTA) s 19(1). 3 RTA s 19(2) and Schedule 1A. 4 Mr Lingampalli’s statement dated 2 March 2026.
On this basis, I did not proceed with many of the statutory and regulatory obligations on landlords who lease their premises. I acknowledge that no rental agreement was provided, nor was there any Healthy Homes Statement. I always understood this to be an informal living arrangement between acquaintances as opposed to a formal tenancy.
Section 109(3) of the RTA provides that 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.
Before considering whether it would be just to award exemplary damages against the tenant, I must first decide whether the landlords committed the unlawful act intentionally. 5
The landlords advertised this unit for rent as a separate dwelling. The tenant says the landlords admitted to him that they had other rental properties. He says consequently, the landlords would have been aware of their bond obligations.
Harrop DCJ recently said in similar circumstances (where a landlord committed the unlawful acts of failing to provide insulation and insurance statements): 6 The obligation to provide these documents are fundamental obligations on landlords which it appears Mr Hu was not fully aware of despite there being included in the Act since 2016 and 2019 respectively. Like all citizens, corporate or otherwise, he and his company are deemed to know the law and on that basis a failure to provide these fundamental documents is properly seen as intentional. Parliament’s intention would be subverted if landlords were able to escape consequences for the unlawful acts involved by claiming ignorance of the law.
The rule that the landlord must lodge the bond on receipt is fundamental and widely known. There is a natural and logical inference that the landlords intentionally failed to lodge the bond. There is nothing before me to disturb that inference.
I am satisfied that the landlords’ failure to lodge the bond was intentional.
The effect of the unlawful act is that it tends to threaten the integrity of the system for bond collection. Tenants and the public are entitled to trust the system will protect client funds. The funds are needed to help fund tenancy services. The bond is the tenant’s money; it is not the landlord’s money. The unlawful act may amount to fraud.
It is in the tenants’ interests that she is awarded exemplary damages. 5 See for example, Chief Executive, ex parte Edmondson v Walls North Shore TT548/92, 29 June 1993 at 20. Approved in Birch v Otautahi Community Housing Trust [2020] NZDC 17667 at [38]. 6 T.M.T v Sweeney & Sundahl [2021] NZDC 16182 at [37].
The public interest calls for an award of exemplary damages. It is important to promote trust in the integrity of the bond system. Strict compliance is to be encouraged, which means non-compliance should be deterred by orders of exemplary damages.
For these reasons I find it would be just to award exemplary damages.
The Tribunal does not have the power to order exemplary damages for the first tenancy because the application was lodged more than 12 months after the termination of the tenancy. 7
For the latter tenancy (the landlords’ obligation being a continuing one), the Tribunal orders the landlords to pay three-quarters of the maximum available for exemplary damages, which amounts to $1,125.00. The landlords’ failures to provide written tenancy agreements?
The landlords accept that they failed to provide the tenants with written tenancy agreements in respect to the tenancies.
Section 13 of the Residential Tenancies Act 1986 (RTA) requires landlords to ensure the tenancy agreement is in writing, signed and a copy provided to the tenant prior to the tenancy commencing.
Breaching this obligation is an unlawful act, for which the Tribunal may award exemplary damages up to a maximum of $750.00. 8
Naturally, since the landlords provided no written tenancy agreement, they also breached their duties for providing certain information in the tenancy agreement, including a healthy homes compliance statement and an insurance statement. Breach of those duties also carry exemplary damages for breach up to a maximum of $750.00.
Applying the reasoning discussed above, I find the landlords have committed the unlawful acts intentionally.
Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied that 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. 9 7 RTA s 109(2)(a). At that time, $1,000.00 was the maximum available for exemplary damages. 8 See s 13(4) and Schedule 1A of the Residential Tenancies Act 1986 (RTA). 9 RTA s 109(3).
Similarly, under s 109 of the Act, the Tribunal cannot order exemplary damages for breaches committed more than 12 months prior to the application was filed. Therefore, the Tribunal does not have the power to order exemplary damages for the first tenancy. For the latter tenancy, the duties being continuing ones, exemplary damages are available.
The Tribunal has the power to award up to three times $750.00 because there are three breaches. However, I consider the breaches encompass one actus reus so it would be inappropriate to order cumulative exemplary damages.
Having regard to the statutory factors, I consider three-quarters of one of the maxima is apposite. I order $562.50.

Did the landlord breach their smoke alarm duties?

Under s 45(1)(ba) of the Residential Tenancies Act 1986 landlords must comply with all requirements in respect of smoke alarms set out in the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016. Clause 5(6) of the Regulations requires: (6) There must be at least 1 qualifying smoke alarm installed— (a) in the sleeping space; or (b) otherwise at the premises within 3 metres of the entrance (or main entrance) to the sleeping space.
Under clause 5(2) “[t]he requirements must be met at the commencement of the tenancy and at all subsequent times during the tenancy”. Under clause 7(1)(a) the smoke alarms must “be fully operational and otherwise in full working order, with no faults, defects, or damage”.
The premises had a smoke alarm, but it was not within three metres of the bedroom’s entrance. The landlords breached their duties and committed an unlawful act.
The tenant and his wife were put at greater risk than they should have due to the landlords’ breach. The landlords lived in the same building, so suffered similar risk from a fire that was not detected before it took hold. Thankfully, there was no serious fire, and the tenant did not experience tangible harm consequently.
The maximum for exemplary damages is $7,200.00. The Tribunal orders the landlords to pay the tenant $1,000.00 for exemplary damages having regard to the statutory factors. The landlords’ failure to appoint an agent
A landlord who is out of New Zealand for longer than 21 consecutive days must ensure they have an agent in New Zealand. The landlords accept they have been overseas for longer than the Act permits without appointing an agent. 10
Breaching this obligation is an unlawful act, for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. 11
As the landlords did not appoint an agent, they have committed an unlawful act.
The landlords’ have more than one rental property. They are deemed to know the law and it is likely they did. The failure was intentional.
It is just to do order exemplary damages having regard to the landlord’s intent, the effect of the unlawful act, the interests of the tenant, and the public interest.
The Tribunal orders the landlords to pay exemplary damages of $500.00.

Were the premises unlawful premises?

The landlords converted the downstairs into a separate household unit. They did not obtain any consents for that conversion. Legal principles – unlawful premises
The Tribunal may declare premises to be unlawful residential premises under s 77(2)(ac) of the Residential Tenancies Act 1986 (RTA).
Under s 78A(2) of the RTA, 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: os 36 of the RTA (take all reasonable steps to ensure that, at the commencement of the tenancy, there is no legal impediment to the occupation of the premises for residential purposes); or os 45(1)(c) of the RTA (comply with all requirements in respect of buildings). 10 RTA s 16A(1). 11 RTA s 16A(6) and Schedule 1A.
Where the Tribunal declares the residential premises to be unlawful, it 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. 12
Relevantly for this case, household units may not be divided into smaller household units without fulfilling change of use rules which involve Council issuing a Certificate of Code Compliance. Section 115(1) of the Building Act 2004, provides: 115 Code compliance requirements: change of use An owner of a building must not change the use of the building,— (a) in a case where the change involves the incorporation in the building of 1 or more household units where household units did not exist before, unless the territorial authority gives the owner written notice that the territorial authority is satisfied, on reasonable grounds, that the building, in its new use, will comply, as nearly as is reasonably practicable, with the building code in all respects... Discussion – were the premises unlawful
The landlord relied on a 2016 Code Compliance Certificate. The CCC does not fully describe the detail of the work. That is not surprising. One usually needs to delve into the application for building consent and accompanying plans to unravel what was consented and signed off.
The parties have not submitted a copy of the property file for the premises which probably would have contained that detail. What can be said with confidence is that the downstairs unit which is the subject of these claims had no Council approval as required by s 115 of the Building Act. It follows, the unit was an unlawful premises.
That being so, the Tribunal must consider whether to order a rent reduction and if so in what amount. Rent reduction: legal principles
Where the Tribunal finds premises are unlawful residential premises under s 78A(4) of the RTA, it may order the landlord to (i) repay the tenant all the rent they paid; or (ii) a lesser amount of rent repayment that it finds fair having regard to the special circumstances of the case, including the nature of the premises.
I consider that s 78A(4)(ii) should apply to this case because applying s 78A(4)(i) would be unfair to the landlord. 12 RTA, s 78A(4)(a).
The Court of Appeal in Parbhu 13 disparaged a sledgehammer response of a full rent reduction in response to “relatively footling” breaches: The effect of relying on that provision is that any relatively footling breach by a landlord (for instance, the incomplete planning or building consenting of an otherwise eminently safe and sound accessory unit) ...would compel total restitution of rent paid regardless of the degree of benefit.
Consistently with these comments in Parbhu, any rent repayment the Tribunal orders should be proportionate to the seriousness of the breach. At the more serious end of the scale are premises that are virtual hovels, such as an unconsented converted garage that leaks and is infested by vermin. At the other end of the scale where there is a minor building consent irregularity, but the premises are “eminently safe and sound” a full rent reduction is not called for.
Recent District Court cases illustrate the approach that should be taken. In Chen v Kumar 14 the premises had been consented for use as a rest home (upstairs) and a residence for the past owner and family (downstairs). Originally, the rest home and residency were not physically divided, but before the tenancy began someone blocked access between the upstairs and downstairs to create two separate residential units. The landlord, Mr Chen, was convinced that he could lawfully rent the downstairs premises out. The Tribunal found however, the premises were unlawful and ordered about 30 per cent of the rent be returned to the tenant, which amounted to $45,000.00.
In the District Court, Judge DJ Clark agreed with the Tribunal that the premises were unlawful. However, he considered that on the facts as he found them, the rent reduction must be drastically reduced. Importantly, Mr Kumar very much wanted to stay in the premises and the premises were not “unsafe”: [95] Furthermore, Mr Kumar and his family enjoyed the occupancy of a premises and received the full benefit of those premises throughout the course of the tenancy. He wanted the tenancy to continue. I do not accept then the unit is necessarily “unsafe” given Mr Kumar’s enjoyment of the same. Arguably it falls into the category contemplated by the Court of Appeal as being technically in breach of planning or consenting obligations but otherwise could be safe. Certainly, until February 2021 Mr Kumar thought so as he wanted to remain there. [96] The Tribunal ordered Anemax (and now the landlord through my order) to pay Mr Kumar the sum of $45,000 (being a 30% reduction on the total rent paid). For the reasons set out I quash that order given that I find Mr Kumar had the full benefit of the premises during the tenancy, which including a discount during the period of construction. 13 Want v Parbhu & Patel as Trustees of the Impala Trust [2019] NZCA 674 at [31]. See also While v Moffitt [2026] NZHC 490. 14 Chen v Kumar [2022] NZDC 7783.
His Honour reduced the rent to be refunded to $2,000.00. That amount also took account of rent arrears of $3,165.71 (which the Tribunal had also declined to order). The District Court rent reduction of $2,000.00 amounts to about 3 per cent of the total rent paid. 15 If the $3,165.71 arrears are factored in the reduction is about 7.5 percent. 16
In Kemp v Elliot 17 the premises’ passed its final inspection which found the build to have been completed fully with the building consent. The final inspection report recorded that Council should issue the CCC upon the landlord paying the appropriate application fee. Kemp was therefore the factual exemplar of “the incomplete planning or building consenting of an otherwise eminently safe and sound accessory unit.”
The Tribunal had ordered 30 per cent rent reduction (based on findings of fact that the District Court did not adopt), which resulted in a refund rounded up to $20,000.00. 18 However, Judge D J Clark quashed the Tribunal’s order and substituted an order for a rent reduction of $2,000.00. That figure amounts to a rent refund of about 3 per cent.
In Johnson v Clement 19 Judge D J Clark heard an appeal involving a granny flat. The Tribunal found the premises became unlawful premises only after the landlord moved away from the main house so that the RTA s 5(1)(n) exclusion ceased to apply. The Tribunal ordered a rent reduction at the rate of $25.00 per week. The weekly rate was modest, but the total amount ordered for rent reduction was $10,500.00 because the tenancy had lasted 12 years.
His Honour found that the breach leading to the unlawfulness was technical. He relevantly for this decision, observed at [38] and [48] of his decision: 20 [38] [In Chen v Kumar] I agreed with the Tribunal the premises were unlawful premises, 15 however I held the Kumar’s were provided with premises which were otherwise safe and sanitary, and compliant in terms of healthy homes standards. On that basis, I found “special circumstances” existed justifying a reduction in the refund of rental which was ordered to be paid by the Tribunal. I reduced the refund of rent from an award of$45,000 down to an award of $2,000, the $2,000 reflecting the breach of s 78A of the RTA in the circumstances of that case. ... [42] The reason why these premises were “unlawful” was because Mr Johnson was no longer entitled to claim the premises were exempt under s 5(1)(n). That is a breach of the 15 The rent due to 9 March was $66,874.29. 16 The rent due to the end of the tenancy was $68,445.71. 17 [2022] NZDC 17792. 18 The total rent due to the end of the tenancy was $63,607.14. 19 [2022] NZDC 2085. 20 The High Court in While v Moffitt [2026] NZHC 490 approved of this passage at [69]. Act but is technical. The purpose of s 78A is to prevent landlords from offering premises which fail to meet the statutory and regulatory thresholds of safe and sanitary housing. However, a balance needs to be applied between premises which are safe and sanitary but are unlawful because of a technical breach. Each case will need to be determined on its own merits because clearly there will be many instances where premises will be unlawful because they are not safe and sanitary.
His Honour found that the breach was like that in Kemp v Elliot and that the Tribunal’s refund of rent should be reduced to the sum of $2,000. 21 Discussion
I must carefully weigh what amount of rent it is fair to deduct. The RTA does not specify the “special circumstances of the case” I must have regard to except for “the nature of the premises”. Other special circumstances that are relevant in this case are: 22 a. The parties’ knowledge of the breach and reasons for entering the tenancy. b. The tenant’s reasons for bringing the claim. c.The benefits the parties received. d. The seriousness of the regulatory breaches making the premises unlawful. e. Other orders the Tribunal will make and avoiding disproportional orders. f.The purposes of discouraging tenancies of unlawful premises and ensuring landlords do not unfairly profit from unlawful premises. The nature of the premises
These premises had: a. A separate entry. b. A bedroom with a walk-in wardrobe area leading to the main bedroom area (converted from the internal garage). c.An open plan living, dining, kitchenette room which included a bench going along one wall containing a sink, washing machine, and plug-in stove, and a living and dining space. d. A bathroom. e. Stairs into the open-plan living area that led upstairs but had been blocked off. 21 At [44]. 22 See Janet Robertshawe’s 2019 conference paper, The Legacy of Anderson v FM Custodians: Section 78A Tenancies.
The premises were in a renovated part of the landlord’s own home. The unauthorised conversion work included sealing the garage door internally (but not removing the garage door or its internal tilting structural elements) to create a bedroom.
The conversion work done to a fair standard. The Tribunal has not heard evidence otherwise. The tenant must have generally enjoyed living in the premises or he would not have returned. However, unlike Kumar, Chen, and Clement the original garage and the workshop were not meant to be slept in or used as a living room when approved. Although, the converted garage may have been lawfully usable as a bedroom in conjunction with the main house it is unlikely that this construction would have received a CCC for use as a separate dwelling.
The kitchenette had no oven, so it did not comply with reg 7(2) of the Housing Improvement Regulations which requires “adequate means of preparing food and of cooking food, both by boiling and by baking”.
The tenant believes that he suffered from more noise than he ought due to lack of soundproofing that the Code would have required if the unit had been properly consented and signed off. Also, the premises would not have met fireproofing separation regulations. The parties’ reasons for entering the tenancy and their knowledge of the breach
The landlords’ principal motive for renting the premises would have been to generate income for themselves.
The tenant wanted a safe and healthy place to live.
The landlords knew the premises was unconsented for use as a separate household unit. The tenant did not. The tenant’s reasons for bringing the claim
The tenant saw the landlords’ advertisement of the premises as having only three bedrooms. He later realised the extent of the landlords’ breaches.
He feels taken advantage of and believe the landlords overcharged him and seeks vindication for being the victim of the landlord’s non-compliance. The benefits the parties received from the tenancy
The landlords received rent for the tenancy.
The tenant had the benefit of a premises that were habitable and safe, but unbeknownst to him the premises were not consented as a separate household unit and would not have achieved a CCC for want of an oven, fireproofing between the different household units, and retention of the garage door and its internal structure on the bedroom ceiling. 1 The seriousness of the breaches underlying the unlawfulness
The non-compliance meant the premises were less safe and - due to the nature of the garage conversion and lack of an oven - had less amenity than they should have.
Significant building work would have been required for the premises to comply with the Building Code so that it could lawfully be used as a separate premises. The work here was done in the modern era and was not in conformity with the Code. It is not a situation where the unconsented work was historical and would have complied with the rules existing at the time of construction.
While the premises were adequate, landlords should not deliberately overlook what Council requires of them for premises to be lawfully rented out as separate premises. The premises was below the standard of the relevant Code. There is an underlying element of “cheating the system” where landlords circumvent building regulations to make profit for themselves. Other orders and factors
The rent reduction ordered must take account of other orders so that the totality of the order does not become excessive. The Tribunal often uses a percentage of the weekly rent to quantify the appropriate rent reduction, but the District Court has found that care should be taken to ensure that the reduction does not become disproportionately high simply because a tenancy’s duration is longer than another similarly unlawful tenancy. 23
The tenant abandoned a claim for the landlord failing to maintain the premises. The smoke alarm breach is of a different kind. Therefore, there is no other relevant order that must be factored in.
I have regard to the need to avoid the rent reduction order becoming disproportionately high. 23 For example, in Harding v Caroto [2023] NZDC 4981 at [45]. Unfair profit and the public interest
Section 78A addresses a concern that landlords do not unfairly profit from unlawful premises and there is a public interest in discouraging tenancies of unlawful premises.
This calls for the rent reduction to be set at a level that deters and landlords from running the risk of renting out unlawful premises by depriving them of any unfair rental profit. Conclusion
I conclude the landlords should repay the tenant 7.5 percent of the rent the tenant paid for the two tenancies during which he occupied only the downstairs unit. That amounts to $5,535.21.
I have double-checked whether that outcome is fair. I have stood back and reconsidered the factors discussed above against the final figure I have arrived at and had regard to the Courts’ decisions cited in this decision. The outcome is fair and accords with authority. I order accordingly.

Did the landlords misrepresent the premises as a five-bedroom home?

The tenant submits: 24
Unfair and Misrepresented Rent Charges The premises were advertised and represented as a fully consented dwelling, and rent of $950 per week was charged for a 5 bedroom house, however the owners agents then advertised the property for 3 bedroom only and reduced the advertised rent from $1020/ week to $750 weekly. Comparable lawful rent for the premises was $750 per week. The excess rent was charged on the basis of misrepresentation, supported by the advertisement attached (Annexure E), engaging sections 13 and 78A RTA.
Damages may be ordered for misrepresentation under s 35 of the Contract and Commercial Law Act 2017, which provides: 35 Damages for misrepresentation 24 Submission 5b Morpeth (1) If a party to a contract (A) has been induced to enter into the contract by a misrepresentation, whether innocent or fraudulent, made to A by or on behalf of another party to that contract (B),— (a) A is entitled to damages from B in the same manner and to the same extent as if the representation were a term of the contract that has been breached...
When the tenant took over the whole house, he rented out the downstairs unit (two bedrooms) for about $560.00 per week including utilities. The tenant occupied the upstairs area (three bedrooms) with his wife.
The tenant had lived in the downstairs unit for years before he took over the whole house. I am not satisfied that the landlords made any misrepresentation as to the number of rooms that were usable as bedrooms. It would not make sense for them to make any representation as to the number of bedrooms because the tenant was acquainted with the premises.
Moreover, the tenant did not suffer any loss requiring damages. He rented out the downstairs unit for more than he had paid. He has not refunded anything to his tenant.
This claim is dismissed. Filing fee
The landlords must reimburse the tenant for the filing fee because he has substantially succeeded with the claim. 25 Non-publication
The Tribunal must, on the application of a party that has wholly or substantially succeeded in proceedings, order that the party’s name or identifying particulars not be published, unless the Tribunal considers that publication is in the public interest or is justified because of the party’s conduct or any other circumstances of the case. 26
The tenant has substantially succeeded in his claim. I do not consider that despite that publication is in the public interest or is justified by the tenant’s conduct or any other circumstances of the case. 25 RTA s 102(4)(b). 26 RTA s 95A(1).
It follows, the Tribunal orders non-publication of the tenant’s name and identifying details.

Tenancy Tribunal case 5334592 — Exemplary damages at 5B Morpeth Place, Blockhouse Bay, Auckland 0600

At a glance

Tenancy Tribunal case 5334592 — Exemplary damages at 5B Morpeth Place, Blockhouse Bay, Auckland 0600

At a glance

Award balance

Claims & awards

Dismissed claims

Order

Reasons

ON RESERVED DECISION

Did the landlords fail to lodge the bond?

Did the landlord breach their smoke alarm duties?

Were the premises unlawful premises?

Did the landlords misrepresent the premises as a five-bedroom home?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Dismissed claims

Order

Reasons

ON RESERVED DECISION

Did the landlords fail to lodge the bond?

Did the landlord breach their smoke alarm duties?

Were the premises unlawful premises?

Did the landlords misrepresent the premises as a five-bedroom home?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions