What was the outcome of Tenancy Tribunal case 4584614?

The tribunal order states: No suppression orders apply around publication of this decision.

How much money was awarded in case 4584614?

Verified claim lines are listed on this page.

Where can I read the official tribunal order for case 4584614?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9342726-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4584614?

The tribunal order states: No suppression orders apply around publication of this decision.

How much money was awarded in case 4584614?

Verified claim lines are listed on this page.

Where can I read the official tribunal order for case 4584614?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9342726-Tribunal_Order.pdf.

Unit/Flat 1, 14 Woodside Avenue, Northcote, Auckland 0627 Tenancy Tribunal Case 4584614 — Leaks

Order

No suppression orders apply around publication of this decision.
The tenant’s application is dismissed.

Reasons

Both parties attended the telephone hearings on 7 and 21 August 2023.
On 24 May 2023 the tenant applied for an order reducing his weekly rent to an amount reflecting the market rent. The tenant sought an order that his rent be decreased to $750.00 per week following a rent increase from $850.00 to $950.00 per week. Background
A summary of the background to the dispute is as follows: • Prior to the tenancy, the property had been rented out for a fixed term from 16 May 2021 to 15 May 2022 at a weekly rent of $950.00. • The parties signed a residential tenancy agreement for a fixed term from 27 May 2022 to 26 May 2023 at a weekly rent of $850.00. The tenancy agreement provided that the rent could be increased in accordance with section 24 of the Residential Tenancies Act 1986 (the Act) but could not be increased within 12 months after the date of commencement of the tenancy. In the agreement, the tenant acknowledged that rent could be increased during the fixed term. • The property comprises 3 bedrooms and 2 bathrooms upstairs with a separate unit underneath. The downstairs studio has a kitchenette with stove top, a dishwasher, washing machine and bathroom. The property was built in 1959 and was renovated 5 years ago. • Pursuant to the special conditions, the tenant was permitted to have boarders/flatmates in the downstairs unit. At times the tenant has been able to sublet the studio at a rent of about $385.00 per week. There was also permission for the tenant to have a “small breed dog”. • On 5 March 2023 the landlord issued a notice to increase the rent to $1,090.00 per week from 1 June 2023. • On 11 May 2023 the landlord issued a notice to increase the rent to $950.00 per week from 1 June 2023.
The Tenancy Services website indicates that the median rent for a 4-bedroom house in Northcote is $900.00 per week. The lower quartile is $825.00 and the upper quartile is $960.00 per week. Relevant law
Section 25 of the Act provides (in part): (1) On an application made to it at any time by the tenant, the Tribunal may, in accordance with the succeeding provisions of this section, on being satisfied that the rent payable or to become payable for the tenancy exceeds the market rent by a substantial amount, make an order reducing the rent to an amount, to be specified in the order, that is in line with the market rent. (2) Notwithstanding anything in subsection (1), no application may be made under that subsection in respect of the rent payable under a fixed-term tenancy later than 3 months after - (a) The date of commencement of the tenancy or (in the case of a tenancy that was subsisting immediately before commencement of this Act) the date of commencement of this Act; or (b) The date of the last review of rent, - whichever is the later. (3) For the purposes of this Act, the market rent for any tenancy shall be the rent that, without regard to the personal circumstances of the landlord or the tenant, a willing landlord might reasonably expect to receive and a willing tenant might reasonably expect to pay for the tenancy, taking into consideration the general level of rents (other than income-related rents within the meaning of section 2(1) of the Public and Community Housing Management Act 1992) for comparable tenancies of comparable premises in the locality or in similar localities and such other matters as the Tribunal considers relevant.
The tenant must prove on the balance of probabilities that the rent exceeds market rent by a “substantial amount”. The term “substantial” is not defined in the Act but is the opposite of “minor” or “insignificant”. Some earlier Tribunal cases suggested a “rule of thumb” of 10% over market rent. However, a rule of thumb based on a specific percentage has no legal status.
The test for market rent is the amount a willing landlord might reasonably expect to receive, and a willing tenant might reasonably expect to pay for the tenancy, taking into consideration the general level of rents for comparable tenancies of comparable premises in the locality or in similar localities. The Tribunal can also take into consideration such other matters as it considers relevant.
Section 24(1) of the Act provides that the rent may be increased by the landlord provided the landlord gives the tenant notice in writing, the notice specifies the amount of the increased rent and the day on which the increased rent shall become payable, and that day must be not less than 60 days after the date on which the notice is given. The rent must not be increased within 12 months after the date of commencement of the tenancy or within 12 months after the date on which the last increase took effect. A landlord under a fixed term tenancy may not increase the rent during the term of the tenancy unless permitted by the provisions of the tenancy agreement to do so.
Section 24(4) provides that, where a landlord has given notice to increase the rent and subsequently realises that, because of an error in calculating the day on which the increased rent is to become payable, or some delay in serving the notice, the day fixed for the increased rent to become payable is in contravention of section 24(1), the landlord may with the agreement of the tenant or the consent of the Tribunal, give to the tenant a further notice varying the original notice so that it complies with section 24(1). Evidence about market rent
The tenant provided information for various properties, placing emphasis on the following: • 95 Ocean View Road, Hillcrest, for rent at $690.00 per week. The website www.propertyvalue.co.nz states that this is a 4-bedroom, 250m2 property built in 1957 that was listed for rent at $690.00 per week on 26 July 2023. The property is double storey. • 34 Raymond Terrace, Northcote, for rent at $850.00 per week. This is a 4 bedroom, 173m2 property built in 1969 that was listed for rent at $850.00 per week on 13 July 2023. Listing information publicly available through Ray White describes the property as having 3 bedrooms, kitchen, lounge, and a bathroom upstairs, with a rumpus room, bedroom, and laundry downstairs. • 33 James Evans Drive, Northcote, for rent at $1,000.00 per week. The publicly available listing through Harcourts says that this is a 4 bedroom, 210m2 property built in the 1970’s. On the ground floor there is a lounge and kitchen with several living areas and a small office, separate laundry, and toilet. Upstairs there are 3 bedrooms and a master bedroom with ensuite. The property also has a swimming pool. The www.propertyvalue.co.nz website states that this property was built in 1978 and was listed for rent at $1,000.00 per week on 8 August 2023. Analysis Market rent
Hillcrest is a suburb bordering Northcote, slightly further away from the CBD. It is a slightly cheaper suburb in rental terms. The median rent for a 4-bedroom property in Hillcrest, according to the Tenancy Services website, is $818.00 and the upper quartile rent is $878.00. This compares to Northcote, where the lower quartile rent is $825.00. Therefore, even a lower quartile property in Northcote attracts a higher rent than the median rent for a 4-bedroom property in Hillcrest.
I conclude that 95 Ocean View Road, Hillcrest, is not a comparable property for the purposes of section 25 of the Act. The two suburbs attract different market rents.
The property at 34 Raymond Terrace is in the same suburb and in some respects is a comparable property. Both the tenancy address and the property at Raymond Terrace have two levels and 4 bedrooms and were built at the same time. However, it is not clear that the tenancies are comparable. As pointed out by the landlord, the tenant is able to rent out the bottom apartment, which is self-contained and has its own separate entrance. There is no indication that the tenancy at 34 Raymond Terrace has these features. After allowance is made for the rent the tenant can obtain through sub-letting, the tenant is paying a net weekly rent of about $565.00.
The landlord’s agent, Barfoot & Thompson, provided written submissions stating that the upstairs portion of the tenancy address would attract a market rent of between $680.00 and $700.00 per week if rented on its own. The tenant is also able to sub-let the downstairs apartment for $385.00 per week, so that the combined weekly rental from both dwellings would be above $1,100.00 per week.
I consider this is a relevant matter which the Tribunal is entitled to consider when determining the market rent for the tenancy address. The tenant is able to sub-let the bottom apartment while renting the entire building from the landlord. In my view, the potential rental yield available to the landlord if he decided to rent the upstairs and downstairs areas separately is a relevant factor.
The property at 33 James Evans Drive was built nearly 10 years after the other two properties. It presents as a high-quality home and has features, such as a swimming pool, which the tenancy address does not have. It is clearly in the upper quartile, sitting on a quarter acre of land, and the rent reflects that. As with 34 Raymond Terrace, however, the property layout does not suggest either level could be rented out separately, which is the defining feature of the tenancy address. The property is not designed for separate households.
The tenant said the condition of the tenancy address justified a lower rent. He referred to “very old facilities”, a sink master with a tendency to break down, a roof leak, an internal door that was swollen and not able to close, old locks and handles, paint peeling from the ceiling (there were no photographs to support this) an old gutter that had not been cleaned or repaired, and repairs were being performed to the downstairs unit due to Cyclone Gabrielle. The tenant referred to the condition of the driveway and provided pictures of potholes.
The owner of the property attended the second hearing and said that the maintenance identified by the tenant covered a 15-month period and the issues had all been dealt with. A brand-new kitchen was installed 5 years ago, and they were disappointed to find the insinkerator was faulty. As to the roof leak, the landlord said that there was a minor leak during Cyclone Gabrielle. The gutters were cleared afterwards, and the roof inspected. The owner said that it had not been possible to pin-point the leak. The evidence does not establish that this has been a recurring problem and the tenant acknowledged that he had not noticed any leaking since.
The marketing photographs of the property provided by the landlord, taken about a year ago, in my opinion show a well-maintained, modern, and comfortable living environment.
The rent summary provided by the landlord shows that the rent was $620.00 per week until 25 May 2023 (when it increased to $850.00 for one week) and this is consistent with the landlord’s evidence that the rent was reduced during remediation to the downstairs studio following flooding in Auckland.
As to the potholes in the driveway, the landlord said this had not changed significantly since the start of the tenancy. There is a shared driveway, and three owners of neighbouring dwellings hold easements to use it. The co-owners need to agree jointly on repairs to the driveway. I do not find the condition of the shared driveway to be a relevant factor when considering the market rent for the property. Notice of rent increase
In March 2023 the landlord increased the rent to $1,090.00 per week from 1 June 2023. In May 2023 the landlord issued a notice increasing the rent to $950.00 per week from the same date.
Both rent increase notices were to take effect more than 12 months after the commencement of the tenancy. The rent was not being increased during the fixed term (although this was permitted by the tenancy agreement). So, in these respects the notices complied with the requirements in section 24(1) of the Act.
The first notice complied with the requirement that the rent increase not take effect for at least 60 days after the notice. Indeed, more than the required notice was given. The second notice, which amended the first, did not give 60 days’ notice.
I do not consider that section 24(4) of the Act (variation of invalid original notice) applies. There was no error in the notice period or delay in service as required by that section. The first notice was lawfully given and increased the rent to $1,090.00 per week from 1 June 2023 in accordance with its terms and section 24(3) of the Act. This notice was not subsequently withdrawn but was varied in the tenant’s favour. Effectively, the landlord waived his right to insist on the full extent of the notified rent increase.
I find that the rent increase was effective, notwithstanding that the May notice did not give 60 days’ notice of a rent increase. The rent increase had already been notified in accordance with the Act. Conclusion
Assessing the market rent of a property is not an exact science. It is a matter of judgment and to some degree of subjective opinion, and the Tribunal is unlikely to have comprehensive information. Real estate listings and advertisements have an inherent limitation, as they only cover houses currently on the market and may not reflect the overall level of rents for existing similar tenancies in the area. And there is the difficulty of finding comparable tenancies as well as comparable premises.
In this case, while there are properties comparable in a broad sense, as being in the same locality and of the same age and general configuration, there is no evidence relating to comparable tenancies, because the tenancy address is comprised of two dwellings or households and the tenant is able to benefit from subletting one of them. Permission to have pets may also be a relevant factor in some instances, as suggested by the landlord, although I do not find it material here.
On the information available, I consider that the weekly rent reflects the median market rent for a 4-bedroom property in Northcote. The rent being charged may be towards the upper end of this range, but it is not at the upper quartile starting from $960.00 per week. The property was able to attract tenants who were willing to pay $950.00 per week in May 2021, which suggests the current pricing broadly reflects the current market. I doubt whether rents have fallen since, given the economic climate. Even if the market rent were to be assessed at around $900.00- $925.00 per week, I would not be prepared to hold that a rent of $950.00 per week engages section 25(1) of the Act.
For the reasons given, I am not satisfied that the rent payable for the tenancy exceeds the market rent by a substantial amount. Name suppression
The tenant requested suppression, but the application has not been “wholly or substantially” successful. I decline to grant suppression.

Tenancy Tribunal case 4584614 — Leaks at Unit/Flat 1, 14 Woodside Avenue, Northcote, Auckland 0627

At a glance

Tenancy Tribunal case 4584614 — Leaks at Unit/Flat 1, 14 Woodside Avenue, Northcote, Auckland 0627

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions