Published tribunal order
Tenancy Tribunal case 5361486 — Rent arrears
Decided 24 Feb 2026 · Published 24 Feb 2026 · Application 5361486
- Rent arrears
Party names are redacted in the official published order.
Order
- An application for suppression has been made in this case, and the Tribunal orders suppression of the names and identifying details of the landlords and their representative.
- must pay [the landlord/s] immediately, as follows:
Reasons
- The landlords attended the hearing, represented by [The landlord’s representative].
- The tenant was called twice on the phone number given in the Notice of Hearing, the same number through which he attended the last hearing, but both calls went to answerphone.
- An Order was made on 9 December 2025 ending the tenancy on 16 December 2025. The tenant vacated in accordance with that Order.
- The 9 December Order notes, “It is not disputed that at 16 December 2025 there will be unpaid rent of $22,857.14.”
- The matter was adjourned to today to give the tenant an opportunity to file a cross application, which might have given him rights of set off, before the landlords’ rent arrears claim was determined.
- The tenant has filed no application.
- The landlords say they have claims resulting from the end of the tenancy. Those claims will need to be brought though a separate application. This Order is therefore only to determine what compensation should be paid to the landlord for unpaid rent.
- As flagged in the 9 December Order, there is a question abut whether the landlords met their obligation to mitigate loss under s.49 RTA which provides that, “Where any party to a tenancy agreement breaches any of the provisions of the agreement or of this Act, the other party shall take all reasonable steps to limit the damage or loss arising from that breach, in accordance with the rules of law relating to mitigation of loss or damage upon breach of contract.”
- In Huang v Ashworth 1 the Tribunal determined that the landlord should not be entitled to recover more than 3 months’ rent arrears. Here that would be $6,000.00.
- On appeal to the District Court 2 , the Court confirmed that a landlord has an obligation to mitigate rent arrears losses. In circumstances where the landlord had made several attempts to address the rent arrears directly with the tenant, the Court said at paragraph [18], “I consider that [the landlord’s] attempts to resolve the issue of rent arrears without resorting to eviction were reasonable, especially for a tenancy that had lasted close to four years. But I qualify that: it is reasonable only up to a point. Where a tenant repeatedly breaches promises to make up arrears and instead additional arrears are incurred there comes a point when it is being naive or careless to your own interests to persist giving the tenant more time to pay. For that reason I do not consider that the full arrears can be claimed. In other words I'm satisfied of balance of probabilities that there was some failure to mitigate loss but less than that assessed by the Tribunal (3 months).”
- The Tribunal must assess, in the circumstances of each case, whether the steps taken by a party to mitigate claimed losses, were reasonable. 1 Huang v Ashworth [2023] NZTT 4470826, 4599009 2 Huang v Ashworth [2024] NZDC 15726
- [The landlord’s representative] evidence is that the trustee with oversight of the tenant’s rent payments, contacted her in August to note that no rent had been paid since 13 February 2025 and querying whether the tenant was still occupying the property.
- [The landlord’s representative] contacted the tenant and discussed with him payment of the rent arrears but was essentially told that the tenant would not pay any more rent because of what he considered was the unsatisfactory condition of the property.
- [The landlord’s representative] reported back to the trustees who, around a month later issued the tenant a 90 day notice of termination, ending the tenancy on 16 December.
- There were several opportunities available to the landlords to bring the tenancy to an end sooner, limiting the claimed rent losses
- First, the landlord would have been entitled to bring an application to end the tenancy in mid-December 2024 when the rent was more than 21 days in arrears 3 , although rent continued to be paid, albeit not fully, until a last payment on 13 February 2025.
- Second, once [The landlord’s representative] had reported that there was no prospect of the arrears being paid because the tenant refused to pay rent, a decision about next steps could have been made in less than a month.
- Third, an application could have been brought to the Tribunal to end the tenancy which is likely to have resulted in the tenancy being ended sooner than through a 90 day notice.
- All those were reasonable steps for the landlord to have taken.
- The landlord seems to have overlooked the accumulating arrears up to August, when [The landlord’s representative] was asked to check what was happening.
- After that date appropriate steps were taken to try and resolve the matter with the tenant. When it became clear that would not be fruitful, around a month later the 90 day termination notice was given.
- As was found by the District Court in Huang (above) the tenant’s persistent failure to pay the arrears and to pay the rent when due with the arrears increasing, meant that it would have been reasonable for the landlords to take steps to address the problem well before they did.
- There is no reasonable explanation in the evidence for the landlords not having taken steps to address the accumulating arrears well before August, or to take a month to decide next steps when [The landlord’s representative] report made it clear there was no prospect of the arrears being paid. 3 S.55(1)(a) RTA
- In my view, when there already rent arrears owed, after 4 consecutive weeks’ failure by the tenant to pay any rent (13 March 2025), it would have been reasonable for the landlords to have then taken steps they did not take until August to address the situation.
- It is to be expected that landlords will first try to negotiate arrangements for arrears to be paid before filing termination proceedings with the Tribunal. That is reasonable. It was clear to the landlords though, once [The landlord’s representative] had approached the tenant, that there was no prospect of any agreement to have the arrears paid. The 90 day termination notice was given on 17 September.
- My assessment is that at least 5 months (20 weeks) of unpaid rent accrued as a result of the landlords not having taken reasonable and available steps to mitigate the losses arising from the tenant’s breach of his rent payment obligations. I find that apart of the arrears to be irrecoverable.
- Because [The landlord/s] has substantially succeeded with the claim I reimburse the filing fee.