What was the outcome of Tenancy Tribunal case 4657420?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 4657420?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4657420?

The primary dispute was Healthy homes.

Where can I read the official tribunal order for case 4657420?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9562146-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4657420?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 4657420?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4657420?

The primary dispute was Healthy homes.

Where can I read the official tribunal order for case 4657420?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9562146-Tenancy_Tribunal_Order.pdf.

Unit/Flat 115, 9 Madeira Lane, Grafton, Auckland 1023, Neo Tenancy Tribunal Case 4657420 — Healthy homes

Order

An application for suppression has been made in this case, and the Tribunal declines suppression of the Tenant’s name and identifying details.
The Tenant’s application is dismissed.

Reasons

Both parties attended the hearing by teleconference.
On 22 June 2023, the Landlord notified the Tenant that they were increasing the rent from $400.00 to $430.00 per week effective from 28 August 2023.
On 16 August 2023, the Tenant applied for an Order reducing the weekly rent from $430.00 to the market rate.
This was a one-bedroom studio apartment that was 33sqm in size with a 4sqm balcony. It was in a brand-new building and equipped with high quality furnishings including a fridge, stove, oven and washing machine. There was no car park included in the rent and it was not furnished.
The Tenant submitted that comparable one-bedroom studios rent between $360.00 to $410.00 and were either furnished, had utilities included or had a car park. He sought to reduce the rent to $380.00 per week and provided listings from the website ‘Trademe’ that showed one-bedroom properties typically renting for $400.00 per week and included carparks, furnishings, other amenities or utilities.
The Tenant submitted this property was small and the bedroom doors were glass so there was no privacy like a proper bedroom. The doors also hampered airflow. There was no car park, it was not fully furnished and utilities were not included in the rent. The Tenant was aware of other Tenants in the same building paying $390.00 per week and water was included in the rent.
The Landlord submitted the listings provided by the Tenant were mainly in the Auckland CBD area which was not as appealing as the suburb of Grafton. This is why they were cheaper. They considered the rent of $430.00 was low compared to other rentals in the same area. They also referred to the Tenancy Services website, which indicated the median rent in Grafton for one-bedroom properties between 1 February 2023 and 31 July 2023 was $440.00 per week. The lower quartile was $400.00 and upper quartile was $500.00 per week.
The Landlord submitted they could rent out a similar apartment for $480.00 so the amount they were requesting of $430.00 was reasonable. This apartment was much higher quality than the listings provided by the Tenant in that it had double glazing, heating in the bathroom and a heat pump. There was also a storage locker for the Tenant to use. The Landlord submitted that on average rent had increased 15% in the last two years.
The Landlord also presented listings of a one bedroom apartment in Grafton renting out for $595.00 per week which came with storage locker and car park and a one bedroom studio on Customs St, Auckland city renting for 575.00 per week. The law
Sections 25(1) and (3) Residential Tenancies Act 1986 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. Application
Grafton is a suburb within the CBD area where the median rent according to the Tenancy Services website, for a one bedroom apartment at the time the Tenant submitted their application, is $440.00. The Tenant has provided samples of one-bedroom apartments and studio apartments in the CBD and surrounding areas which were lower in rent but notably older than the current property.
In considering the evidence, I consider the market rent is $400.00 for this property taking into account the modern furnishings, quality appliances, locality in a prime school zone and accessibility to public amenities. The listings provided by the Tenant demonstrated many studio apartments in nearby areas which were cheaper to rent and included some extra feature however in comparison, they were not as modern or possess high quality furnishings. Some of the listings also did not show all of the photographs of the property, so it was difficult to compare their quality and age. I also find that if the Tenancy Services data collected was for one-bedroom apartments, the lower quartile rent of $400.00 is a fair comparison for a studio. The Tenant also did not submit evidence of the Tenants in the same building paying less rent. I am therefore satisfied that the rent payable for the tenancy does not exceed the market rent by a substantial amount.
The increase in rent to $430.00 is not substantial and will take effect as of 28 August 2023.
The application is dismissed.
As the Tenant has not been successful, name suppression is not granted.

Order

An application for suppression has been made in this case, and the Tribunal declines suppression of the Tenant’s name and identifying details.
The Tenant’s application is dismissed.

Reasons

Both parties attended the hearing by teleconference.
On 22 June 2023, the Landlord notified the Tenant that they were increasing the rent from $400.00 to $430.00 per week effective from 28 August 2023.
On 16 August 2023, the Tenant applied for an Order reducing the weekly rent from $430.00 to the market rate.
This was a one-bedroom studio apartment that was 33sqm in size with a 4sqm balcony. It was in a brand-new building and equipped with high quality furnishings including a fridge, stove, oven and washing machine. There was no car park included in the rent and it was not furnished.
The Tenant submitted that comparable one-bedroom studios rent between $360.00 to $410.00 and were either furnished, had utilities included or had a car park. He sought to reduce the rent to $380.00 per week and provided listings from the website ‘Trademe’ that showed one-bedroom properties typically renting for $400.00 per week and included carparks, furnishings, other amenities or utilities.
The Tenant submitted this property was small and the bedroom doors were glass so there was no privacy like a proper bedroom. The doors also hampered airflow. There was no car park, it was not fully furnished and utilities were not included in the rent. The Tenant was aware of other Tenants in the same building paying $390.00 per week and water was included in the rent.
The Landlord submitted the listings provided by the Tenant were mainly in the Auckland CBD area which was not as appealing as the suburb of Grafton. This is why they were cheaper. They considered the rent of $430.00 was low compared to other rentals in the same area. They also referred to the Tenancy Services website, which indicated the median rent in Grafton for one-bedroom properties between 1 February 2023 and 31 July 2023 was $440.00 per week. The lower quartile was $400.00 and upper quartile was $500.00 per week.
The Landlord submitted they could rent out a similar apartment for $480.00 so the amount they were requesting of $430.00 was reasonable. This apartment was much higher quality than the listings provided by the Tenant in that it had double glazing, heating in the bathroom and a heat pump. There was also a storage locker for the Tenant to use. The Landlord submitted that on average rent had increased 15% in the last two years.
The Landlord also presented listings of a one bedroom apartment in Grafton renting out for $595.00 per week which came with storage locker and car park and a one bedroom studio on Customs St, Auckland city renting for 575.00 per week. The law
Sections 25(1) and (3) Residential Tenancies Act 1986 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. Application
Grafton is a suburb within the CBD area where the median rent according to the Tenancy Services website, for a one bedroom apartment at the time the Tenant submitted their application, is $440.00. The Tenant has provided samples of one-bedroom apartments and studio apartments in the CBD and surrounding areas which were lower in rent but notably older than the current property.
In considering the evidence, I consider the market rent is $400.00 for this property taking into account the modern furnishings, quality appliances, locality in a prime school zone and accessibility to public amenities. The listings provided by the Tenant demonstrated many studio apartments in nearby areas which were cheaper to rent and included some extra feature however in comparison, they were not as modern or possess high quality furnishings. Some of the listings also did not show all of the photographs of the property, so it was difficult to compare their quality and age. I also find that if the Tenancy Services data collected was for one-bedroom apartments, the lower quartile rent of $400.00 is a fair comparison for a studio. The Tenant also did not submit evidence of the Tenants in the same building paying less rent. I am therefore satisfied that the rent payable for the tenancy does not exceed the market rent by a substantial amount.
The increase in rent to $430.00 is not substantial and will take effect as of 28 August 2023.
The application is dismissed.
As the Tenant has not been successful, name suppression is not granted.

Tenancy Tribunal case 4657420 — Healthy homes at Unit/Flat 115, 9 Madeira Lane, Grafton, Auckland 1023, Neo

At a glance

Tenancy Tribunal case 4657420 — Healthy homes at Unit/Flat 115, 9 Madeira Lane, Grafton, Auckland 1023, Neo

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