What was Tenancy Tribunal case 5419028 about?

The tribunal order states: The property is a residential property, and the tenancy falls within the definition

How much money was awarded in case 5419028?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5419028?

The dispute type was not classified.

Where can I read the official tribunal order for case 5419028?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/13682858-Tribunal_Order.pdf.

What was Tenancy Tribunal case 5419028 about?

The tribunal order states: The property is a residential property, and the tenancy falls within the definition

How much money was awarded in case 5419028?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5419028?

The dispute type was not classified.

Where can I read the official tribunal order for case 5419028?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/13682858-Tribunal_Order.pdf.

59 Main Road, Tuatapere, Tuatapere 9620 Tenancy Tribunal Case 5419028 — Tenancy dispute

Order

The property is a residential property, and the tenancy falls within the definition of the Residential Tenancies Act (RTA) and therefore all of the obligations under the RTA for both landlords and tenants apply.

Reasons

Both parties attended the hearing. Mr Almud represented the Applicant, and the Respondent was represented by Mr Pundir. Background:
The parties entered into a commercial lease for a takeaway shop in Southland. It included the accommodation, a separate property, with independent access to the shop, that was three bedrooms, a separate kitchen and living area, toilet, laundry and bathroom. It was fully self contained. The access to the residence is separate from the takeaway shop, that is, the accommodation commercial business could be easily two separate entities.
The property is for sale currently and was at the time the parties entered into the commercial lease, the advertisement states “accommodation included”.
The issues arose when the tenant raised concerns regarding repairs and the landlord stated that it was not within his obligations under the commercial lease.
Whilst both parties had legal advice when they entered into the commercial lease, both chose not to enter a separate Residential Tenancy agreement. The tenant now seeks clarification as to the nature of the tenancy, is it a residential tenancy or a commercial lease. The tenant seeks the security of the Residential Tenancy Act.(RTA)
Whilst the landlord does not dispute the accommodation ‘exists’, he claims that the agreement was for a commercial lease, with significant low rent to include both. If the accommodation was deemed to fall under the RTA the rent would be higher given the obligations of a landlord under the RTA.
The applicant states that at the time they chose to have the commercial lease covering both buildings because of simplicity and because they did not understand the law in relation to giving up their rights under the RTA.
The Issue to determine is whether the tenancy falls within the RTA. The Law:
Section 5(1)(a) of the RTA states that the Act does not apply to Commercial premises.
Section 2(1) definiens ‘commercial premises” as premises that are not residential.
Section 2(3) provides that if premises are used for both residential and commercial purposes, they are deemed residential unless it is provided, they were let “principally for purposes other than residential purposes”.
The Tribunal looks to the substance of the agreement and the actual use of the premises, not just the label given by the parties.
In summary the commercial property becomes residential for the purposes of the RTA if it is used, or intended to be used, mainly as a place of residence. If there is a mix of uses, the property is deemed residential unless it is shown that the main purpose is commercial. Decision:
The landlord claims that the lease entered into was for a commercial property, it was a commercial transaction. That all parties had independent legal advice before signing. Further, that the tenant’s lawyer had accepted the terms with conditions that included “we would like it included that our clients have full tenancy of the dwelling and that they have the right to Air B n B the property if they so wish”
He claims that he himself lived at the property at the time the tenants were shown through. He states that he did not know that the tenant would be staying there and living full time, and it was ten months into the tenancy when he was advised that in fact, he and his wife, small child and mother in law were living in the accommodation. He accepted that it was going to be used by the person running the business and that it would not be full time.
The number of nights the tenant stays at the property is not a decisive factor.
The insurance policy for the commercial building includes “alternative residential accommodation”
In relation to the properties consent, the correspondence from the Council states that “the property is in the General Residential Zone with the Commercial Precinct Overlay.” The commercial activity is a permitted activity in the Commercial Precinct provided it complies with each of the performance standards” It is therefore consented for residential use.
The property remains on the market, and it is marketed as ‘accommodation being attached’.
The landlord claims that there was no discussion about the transaction being anything other than a commercial transaction. He claims that the rent is cheap to include the accommodation and if it was separate to be considered under the RTA then the rent would be higher. He claims that the agreement at the time the commercial agreement suited the tenant given it was low rent for both the business and the accommodation.
The tenant claims that the person running the business stayed in the accommodation full time, and that the landlord should have known because he helped move in a couch and mattress for the tenant.
The accommodation is a separate building to the shop. The commercial shop is able to run independent of the accommodation. There is different access, and the accommodation is three bedroom, with a separate lounge and kitchen area, and has a separate bathroom, laundry and toilet area.
The accommodation and the shop share separate electricity accounts.
The tenant claims they would never have contracted out of the RTA and allowed the landlord to use the lease as a ‘shield’ to avoid his responsibilities as a landlord.
Having considered all of the evidence and submissions by both parties, I am not satisfied on the balance of probabilities that the accommodation, was for any other purpose other than residential. It was not principally used for any part of the commercial property. Its primarily purpose was residential, to house the person operating the commercial premises. They can be separated out and the shop and residence can operate as two separate entities.
Given the above, I find that the property and tenancy does fall within the Jurisdiction of the tenancy Tribunal and RTA. All tenant and landlord obligations apply.

Reasons

Both parties attended the hearing. Mr Almud represented the Applicant, and the Respondent was represented by Mr Pundir. Background:

The parties entered into a commercial lease for a takeaway shop in Southland. It included the accommodation, a separate property, with independent access to the shop, that was three bedrooms, a separate kitchen and living area, toilet, laundry and bathroom. It was fully self contained. The access to the residence is separate from the takeaway shop, that is, the accommodation commercial business could be easily two separate entities.

The property is for sale currently and was at the time the parties entered into the commercial lease, the advertisement states “accommodation included”.

The issues arose when the tenant raised concerns regarding repairs and the landlord stated that it was not within his obligations under the commercial lease.

Whilst both parties had legal advice when they entered into the commercial lease, both chose not to enter a separate Residential Tenancy agreement. The tenant now seeks clarification as to the nature of the tenancy, is it a residential tenancy or a commercial lease. The tenant seeks the security of the Residential Tenancy Act.(RTA)

Whilst the landlord does not dispute the accommodation ‘exists’, he claims that the agreement was for a commercial lease, with significant low rent to include both. If the accommodation was deemed to fall under the RTA the rent would be higher given the obligations of a landlord under the RTA.

The applicant states that at the time they chose to have the commercial lease covering both buildings because of simplicity and because they did not understand the law in relation to giving up their rights under the RTA.

The Issue to determine is whether the tenancy falls within the RTA. The Law:

Section 5(1)(a) of the RTA states that the Act does not apply to Commercial premises.

Section 2(1) definiens ‘commercial premises” as premises that are not residential.

Section 2(3) provides that if premises are used for both residential and commercial purposes, they are deemed residential unless it is provided, they were let “principally for purposes other than residential purposes”.

The Tribunal looks to the substance of the agreement and the actual use of the premises, not just the label given by the parties.

In summary the commercial property becomes residential for the purposes of the RTA if it is used, or intended to be used, mainly as a place of residence. If there is a mix of uses, the property is deemed residential unless it is shown that the main purpose is commercial. Decision:

The landlord claims that the lease entered into was for a commercial property, it was a commercial transaction. That all parties had independent legal advice before signing. Further, that the tenant’s lawyer had accepted the terms with conditions that included “we would like it included that our clients have full tenancy of the dwelling and that they have the right to Air B n B the property if they so wish”

He claims that he himself lived at the property at the time the tenants were shown through. He states that he did not know that the tenant would be staying there and living full time, and it was ten months into the tenancy when he was advised that in fact, he and his wife, small child and mother in law were living in the accommodation. He accepted that it was going to be used by the person running the business and that it would not be full time.

The number of nights the tenant stays at the property is not a decisive factor.

The insurance policy for the commercial building includes “alternative residential accommodation”

In relation to the properties consent, the correspondence from the Council states that “the property is in the General Residential Zone with the Commercial Precinct Overlay.” The commercial activity is a permitted activity in the Commercial Precinct provided it complies with each of the performance standards” It is therefore consented for residential use.

The property remains on the market, and it is marketed as ‘accommodation being attached’.

The landlord claims that there was no discussion about the transaction being anything other than a commercial transaction. He claims that the rent is cheap to include the accommodation and if it was separate to be considered under the RTA then the rent would be higher. He claims that the agreement at the time the commercial agreement suited the tenant given it was low rent for both the business and the accommodation.

The tenant claims that the person running the business stayed in the accommodation full time, and that the landlord should have known because he helped move in a couch and mattress for the tenant.

The accommodation is a separate building to the shop. The commercial shop is able to run independent of the accommodation. There is different access, and the accommodation is three bedroom, with a separate lounge and kitchen area, and has a separate bathroom, laundry and toilet area.

The accommodation and the shop share separate electricity accounts.

The tenant claims they would never have contracted out of the RTA and allowed the landlord to use the lease as a ‘shield’ to avoid his responsibilities as a landlord.

Having considered all of the evidence and submissions by both parties, I am not satisfied on the balance of probabilities that the accommodation, was for any other purpose other than residential. It was not principally used for any part of the commercial property. Its primarily purpose was residential, to house the person operating the commercial premises. They can be separated out and the shop and residence can operate as two separate entities.

Given the above, I find that the property and tenancy does fall within the Jurisdiction of the tenancy Tribunal and RTA. All tenant and landlord obligations apply.

Tenancy Tribunal case 5419028 — Tenancy dispute at 59 Main Road, Tuatapere, Tuatapere 9620

At a glance

Claims & awards

Tenancy Tribunal case 5419028 — Tenancy dispute at 59 Main Road, Tuatapere, Tuatapere 9620

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Property management

Frequently asked questions

Reduce avoidable tribunal risk with proper tenant checks.

Order

Reasons

Topics & place

Residential Tenancies Act sections

Property management

Frequently asked questions

Reduce avoidable tribunal risk with proper tenant checks.