What was the outcome of Tenancy Tribunal case 4645931?

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

How much money was awarded in case 4645931?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4645931?

The dispute type was not classified.

Where can I read the official tribunal order for case 4645931?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9534254-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4645931?

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

How much money was awarded in case 4645931?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4645931?

The dispute type was not classified.

Where can I read the official tribunal order for case 4645931?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9534254-Tenancy_Tribunal_Order.pdf.

100 Wynyard Crescent, Fernhill, Queenstown 9300 Tenancy Tribunal Case 4645931 — Tenancy dispute

Order

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

Reasons

Both parties attended the hearing on 12 October 2023. The tenant attended by teleconference.
The tenant had applied to the Tribunal to have the rent reduced as it exceeds the market rent by a substantial amount (see s.25 Residential Tenancies Act 1986 (“RTA”) ). Rent increase during fixed term
During the course of the hearing, evidence was heard relating to the rent increase.
The tenancy commenced on 10 September 2022. It was a fixed term tenancy to run through until 11 September 2023. The rent shown in the tenancy agreement (“the existing agreement”) was $950.00 per week.
During the course of the tenancy the parties agreed to reduce the rent to $900.00 to take into account the inconvenience to the tenants of having to share use of their driveway with a large adjoining construction site.
On 19 March 2023 the parties signed a document titled “Extension of a fixed term tenancy Agreement” (“the extension agreement”). The extension agreement provided that the fixed term of the tenancy was to be extended to 25 February 2024.
The extension agreement records that “If the terms and conditions of the existing agreement are staying the same, the landlord and tenant agree to the extension of the existing tenancy agreement, that all other provisions of the existing agreement remain the same except for the change in term.”
No term of the existing agreement was changed, with the exception of the extension of the term of the tenancy.
In July 2023, the landlord proposed an increase to the rent to $1,200.00 per week, with the increase taking effect at the end of September 2023.
Section 24 RTA sets out provisions relating to rent increases. Section 25 (1)(g) RTA provides that: “ (g) a landlord under a fixed term tenancy – (i)May not increase the rent during the term of a fixed term tenancy unless permitted by the provisions of the tenancy agreement to do so.”
I did not have sufficient time during the course of the hearing to review the existing agreement. I have now had the opportunity to do so.
Clause 26 of the existing agreement does allow the landlord to review the rent from “time to time” in accordance with s.24 RTA. No increase may take effect within 12 months of the commencement of the tenancy. I find that the landlord was entitled to increase the rent in September 2023. Market Rent
The tenant has applied for a market rent assessment. Sections 25(1) and (3) RTA provide: (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. (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.
In the case of a fixed term tenancy, any application must be filed no later than 3 months after the start of the tenancy or the last rent review (see s 25(2) RTA).
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 RTA, but it 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 and is not appropriate where rents rise at a rate significantly above income inflation.
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”.
The concept of the 'market' is constrained by the requirement that both parties be 'willing', and that the rent meets their 'reasonable' expectations. These terms are not defined by the Act. The Oxford English dictionary defines willing as: "having a ready will; disposed to consent or comply; ready to do (what is specified or implied) without reluctance"; and reasonable as "having sound judgement; sensible ... not asking for too much ... not extravagant or excessive; moderate".
The factors the Tribunal may have regard to are “the general level of rents ... for comparable tenancies of comparable premises in the locality or in similar localities and such other matters as the Tribunal considers relevant”.
The evidence for comparable rents is usually based on advertisements for similar premises in the locality. This evidence has its limitations. Although advertisements usually list the essential features of the property advertised, there is often limited qualitative information available for comparison. Also, advertisements only cover houses currently on the market and do not necessarily reflect the overall level of rents charged for existing similar tenancies in the area.
It is also common for parties to refer to the 'market rent' statistics published by Tenancy Services. These statistics cover the rents charged for tenancies where bonds have been lodged over the preceding 6 months. The statistics include median rent as well as upper and lower quartile.
The Tribunal may also consider “such other matters as [it] considers relevant” to market rent. In Housing New Zealand v Hobman (DC Lower Hutt, TT89/97, 27 November 1997) the Court said the other factors to be considered must be of the same kind as the preceding specified factors. It is arguable however that the term ‘other matters’ is broad enough to cover any anything relevant to the ‘reasonable’ expectations of a ‘willing’ landlord or tenant.
Section 25(4) RTA provides that a market rent order may not take effect any earlier than the date of the application or any later than 30 days after the date of the order. The order may last for up to 6 months in the case of a periodic tenancy, or for such shorter period the Tribunal specifies. In the case of a fixed term tenancy, the order remains in force for the period specified in the order.
The tenant evidence consisted of reference to other properties which the tenant says should considered as “benchmark properties”, with submissions that the properties were generally better than that of the tenant. The tenant also referred to the market rent statistics provided by Tenancy Services.
The landlord provided comparative market analysis, a rental assessment prepared by the landlord company and comparative market rent examples.
Obviously, none of the examples provided by either party are a precise comparison. They provide general indicative evidence only.
The two issues that I must consider are what a willing tenant would be prepared to pay and a willing landlord be prepared to accept for the property. I must ignore the personal circumstances of the parties. Secondly, I may only make an order decreasing the rent if I consider the rent to be substantially greater than the market rent. That assessment is to take place as of the date of the hearing. I may take into account any other factor that I consider to be relevant.
During the course of the hearing, the tenant explained the difficulty that they experienced living at the premises. The landlord has agreed with a neighbouring developer to allow construction vehicles to share the driveway of the premises so as to allow the construction contractors access to their site. The adjoining development site is substantial, with a proposed 140 units. Photos were provided by the tenant of the difficulties this presents. In particular, concrete trucks using the driveway between 3.45 am and 5.30 am and tenant cars being blocked in by contractor vehicles.
I consider that any prospective tenant of the premises would consider the issues raised by the tenant to be highly relevant in deciding whether they would willingly pay $1,200.00 per week to rent the premises. None of the comparative properties put before the Tribunal in evidence had a similar issue.
The landlord said that he had not been involved in the driveway access issue and had understood that the arrangement for the developers contractors to use the driveway had come to an end. The tenant was adamant that it had not and provided photos in support.
But for the driveway issue, based on the rental comparative evidence provided by the respective parties, I would not have been able to say that an increase to $1,200.00 was substantially above market rent.
The reality is that the neighbour to these premises is a large property development. The access arrangement entered into by the landlord has reduced the value of the premises to any tenant. The landlord’s action in initially reducing the rental by $50.00 per week supports that conclusion. I consider that the appropriate market rent in all of the circumstances above and taking into account that property analysis provided by both parties is $1,050.00. Having come to that finding, does $1,200.00 exceed that figure by a substantial amount? Given that the undisputed evidence is that Queenstown rents have been rising at a rate substantially above income inflation, I do not consider that the 10% rule of thumb is appropriate.
Having considered the evidence as to rental prices in Queenstown provided by both parties, I find that the market rent for this property would be $1,050.00, but that the rental of $1,200.00 (the equivalent of 12.5%) does not substantially exceed the market rent. The application is dismissed.
The tenant has not been wholly or substantially successful in this matter and the application for name suppression by the tenant is dismissed.

Tenancy Tribunal case 4645931 — Tenancy dispute at 100 Wynyard Crescent, Fernhill, Queenstown 9300

At a glance

Claims & awards

Tenancy Tribunal case 4645931 — Tenancy dispute at 100 Wynyard Crescent, Fernhill, Queenstown 9300

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Property management

Frequently asked questions

Order

Reasons

Topics & place

Residential Tenancies Act sections

Property management

Frequently asked questions