What was the outcome of Tenancy Tribunal case 4661350?

The tribunal order states: Barfoot & Thompson Ltd (as agent for Frank Wei & Berry Liu) must pay Jeremia

How much money was awarded in case 4661350?

Compensation: Hot Water: $126.67 awarded to tenant; Compensation: Termination without gr…: $1,500.00 awarded to tenant; Property Damage: $1,200.00 awarded to tenant; Filing Fee: $20.44 awarded to tenant

What type of tenancy dispute was case 4661350?

The primary dispute was Healthy homes.

Where can I read the official tribunal order for case 4661350?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9907781-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4661350?

The tribunal order states: Barfoot & Thompson Ltd (as agent for Frank Wei & Berry Liu) must pay Jeremia

How much money was awarded in case 4661350?

Compensation: Hot Water: $126.67 awarded to tenant; Compensation: Termination without gr…: $1,500.00 awarded to tenant; Property Damage: $1,200.00 awarded to tenant; Filing Fee: $20.44 awarded to tenant

What type of tenancy dispute was case 4661350?

The primary dispute was Healthy homes.

Where can I read the official tribunal order for case 4661350?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9907781-Tenancy_Tribunal_Order.pdf.

2412A State Highway 10, RD 2, Waipapa 0295, Cottage Tenancy Tribunal Case 4661350 — Healthy homes

Claims and awards in Tenancy Tribunal application 4661350 — net $2,847.11 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages: Failure to meet healthy homes standards	$1,200.00	Failure to meet healthy homes standards
Compensation: Termination without grounds	$1,500.00	Termination without grounds
Compensation: Hot water	$126.67	Hot water
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$2,847.11
Total payable by Landlord to Tenant	$2,847.11

Claims and awards in Tenancy Tribunal application 4661350 — net $2,847.11 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages: Failure to meet healthy homes standards	$1,200.00	Failure to meet healthy homes standards
Compensation: Termination without grounds	$1,500.00	Termination without grounds
Compensation: Hot water	$126.67	Hot water
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$2,847.11
Total payable by Landlord to Tenant	$2,847.11

Order

Barfoot & Thompson Ltd (as agent for Frank Wei & Berry Liu) must pay Jeremia Pritchard and Dakota Mullin $2,847.11 immediately, calculated as shown in table below.

Reasons

Background

The tenanted premises is a minor dwelling at 2412A State Highway 10, known as the cottage. There is a main dwelling on the same site, which was also tenanted during this tenancy.
Ms Pritchard and Mr Mullin moved into the premises on 17 February 2023. The start date of the tenancy was delayed by one week by the landlord. This forms part of the tenants’ claim, and is discussed in more detail below.
On 17 August 2023 the landlord issued a 7-day notice to terminate the tenancy. The tenants vacated pursuant to that notice.
The tenants’ application seeks compensation / exemplary damages in respect of the following issues: a. Failure to grant possession at the commencement of the tenancy. b. Failure to meet the healthy homes standards. c. Termination of the tenancy without grounds. d. No hot water for two weeks.
The landlord filed a cross-application seeking reimbursement of the cost of an electrician inspecting the stove. The landlord withdrew this claim at the hearing.
The hearing took place in Kaikohe on 1 February 2024. Ms Pritchard represented herself and Mr Mullin. Ms Easterbrook, who was the property manager throughout the tenancy, was unable to attend the hearing. She provided a detailed written statement. Ms Leane represented Barfoot & Thompson. Mr Wei attended the hearing. The previous owners of the property were also present. Failure to grant possession at the commencement of the tenancy
Ms Pritchard viewed the property with Ms Easterbrook. At that viewing they discussed the outstanding healthy homes issues, and the fact that there was no stove. Ms Easterbrook confirmed that a stove was going to be installed.
The parties entered into a written tenancy agreement on 27 January 2023. The agreement states that the commencement date of the tenancy is 10 February 2023.
Several days before the commencement date, Ms Easterbrook contacted Ms Pritchard and told her that the start date was going to be delayed to 17 February 2023, because of a delay with installing the stove.
Ms Pritchard submitted that this was presented to her a ‘fait accompli’ – there was no discussion with her about her options.
A tenancy agreement is a contract. It is a fundamental principle of contract law that one party cannot unilaterally change the terms of a concluded contract.
The landlord’s act of changing the commencement date without Ms Pritchard’s consent was a breach of the agreement, irrespective of whether there were good reasons for the delay.
Ms Pritchard submitted that she would have been happy to move in and ‘make do’ for one week until the stove was installed. It is puzzling why this option was not put to her.
The impact on Ms Pritchard and Mr Mullin was mitigated by the fact that their existing tenancy was not due to end until 17 February. They had allowed themselves a buffer of one week to move without stress.
The landlord’s decision to delay the start date did not leave the tenants homeless, but it did take away that buffer.
The tenants are entitled to compensation for this.
At the hearing there was a complicated and confusing conversation about rent in credit and compensation. I address this question in more detail below. At the hearing I understood that Barfoot & Thompson were arguing that they had given the tenants compensation for the delayed start by not charging them rent for the week of 10–16 February. I commented to Ms Leane that this is not giving the tenants compensation – the tenants had no obligation to pay rent until they got possession of the premises on 17 February.
However, having carefully read Ms Easterbrook’s submission and reviewed Barfoot & Thompson’s rent record, I am satisfied that Barfoot & Thompson did give the tenants compensation by giving a credit for rent for the following week, being the week of 17-23 February. This credit carried through the tenancy and was part of the $1,020.00 that was refunded to the tenants at the end of the tenancy.
The amount of $340.00 is reasonable and adequate compensation to the tenants for the inconvenience caused by the delayed commencement of the tenancy. I will not make an award of additional compensation. Healthy homes compliance
The owners obtained a healthy homes report in December 2022.
The report, dated 19 December 2022, identified that the property was compliant in respect of the insulation standard, but non-compliant in respect of the heating, ventilation, draught stopping, and moisture ingress & drainage standards.
This remained the case when Ms Pritchard and Mr Mullin moved in on 17 February 2023.
The healthy homes compliance date for this tenancy is 120-days after the commencement date. There is scope for argument about whether the commencement date remains 10 February 2023, given that the ‘delay’ to 17 February was, as discussed above, unlawful. However, for the sake of this analysis I will assume that the commencement date was 17 February 2023. This means that the compliance date was 17 June 2023.
The property was not compliant with the healthy homes standards in respect of heating, ventilation, draught stopping, and moisture ingress & drainage standards as at 17 June 2023.
The property had a panel heater in the main living area. The capacity of that heater was not sufficient to meet the heating standard. A compliant heat pump was installed in July 2023.
The rangehood in the kitchen did not work and did not vent to the exterior. A compliant rangehood was installed in July 2023.
There were gaps in the ranchslider in the lounge, and in the frame of the bathroom window (due to rot). The tenants of the larger dwelling operate a business trading as Sunset Maintenance. They provided a quote for various repairs including the ranchslider and bathroom window, on 12 June 2023. I understand that Sunset Maintenance carried out the work in July, but the date is not clear on the information provided to me. Wilkinson Glass re-glazed the ranchslider on or around 21 July 2023.
The gutters leaked in several places, there were sections of missing gutter, and the overflow pipe from the water tank was not connected. Repairs to the guttering and connection of the pipe is included in the quote from Sunset Maintenance.
It is an unlawful act for a landlord to fail to comply with the healthy homes standards 1 . Exemplary damages of up to $7,200.00 can apply.
The Tribunal may award exemplary damages if it is satisfied that an unlawful act was committed intentionally. In considering an award of exemplary damages the Tribunal must have regard to 2 : a. The intention of the person who committed the unlawful act; and b. The effect of the unlawful act; and c. The interests of the person against whom the act was committed; and d. The public interest.
Ms Easterbrook and Ms Leane submitted that: a. They received the healthy homes report in January 2023. b. They obtained quotes for the work required to bring the property to compliance, and they forwarded the quotes to the owners. They followed up with the owners regularly. 1 Sections 45(1)(bb) and 45(1A) Residential Tenancies Act 1986 (“RTA”) 2 Section 109 RTA c. Once the quotes were approved, they issued work orders to the contractors. d. At the beginning the tenancy the priority was getting a stove in the property.
Mr Wei submitted that he wanted to get the property compliant, and he was willing to pay for the necessary work.
The landlords were aware that, at the time of entering into a tenancy agreement, the property was not compliant in respect of four out of the five healthy homes standards. In entering into the agreement, the landlords assumed a risk that they might not be able to complete all of the necessary work within the 120-day period.
The landlords did not ignore their healthy homes obligations, but they failed to meet them.
My finding is that it is appropriate to make an award of exemplary damages.
The usual approach of the Tribunal with exemplary damages is to begin with a figure that is one-third of the maximum, and then consider aggravating or mitigating factors 3 .
There relevant factors in this instance are: a. The property did not meet the standards in multiple respects. b. The non-compliance issues were not severe. There was heating in the lounge, although it was not sufficient to meet the standards. The holes in the ranchslider and bathroom window frame were correctly identified as non-compliant, but were relatively minor. The rangehood did not work, but there is a window next to it in the kitchen. c. The remedial work was done within 4-6 weeks of the compliance date.
Having regard to those factors, I will award exemplary damages of $1,200.00. Termination without grounds
In June 2023 the tenant of the main house complained of a septic smell. The landlord arranged for the tank to be emptied, but the smell returned.
In August 2023 the tenant of the main house notified Ms Easterbrook of liquid pooling around the ‘mushroom’ on the septic system.
Ms Easterbrook visited the property. While she was there, she also opened the cap on the system on the cottage’s side, and noted that the liquid level was high, indicating a possible issue with the soakage field. 3 Wellington Property Management Ltd v Hardie [2022] NZTT 4399281 4374781
Ms Easterbrook contacted J S Drainage (Mr Spruit) to investigate further.
Mr Spruit went to site. He sent Ms Easterbrook a text message on 8 August 2023 stating “give me a bell when you free I had a look it’s poked”.
Ms Easterbrook then spoke with Mr Spruit. In her statement she details that conversation as follows: I asked him if that septic system was connected to the cottage. He advised it was a separate system and that he had installed a baby septic tank for the previous owners which was connected to the cottage but it was also getting old and on the way out. He also confirmed the soakage field for the cottage was failing.
Ms Easterbrook discussed the problem with Mr Wei. Mr Spruit had given Ms Easterbrook a rough verbal estimate of $30,000 to replace the septic systems. Mr Wei suggested giving both tenants four weeks’ notice of termination, and waiving the rent.
On 17 August 2023, Barfoot & Thompson issued 7-day notices to both tenants on the grounds that the premises were uninhabitable 4 .
After the tenants vacated, a friend of Mr Wei moved into the main house. That person subsequently advertised the cottage for rent on a local website. Mr Wei was not aware of this, and he had not consented to it. The listing was subsequently withdrawn.
Mr Wei submitted that the Far North District Council has not taken any steps, or issued any notices to him, in respect of the septic systems.
In September 2023 Mr Wei arranged for another drainlayer (Pipe It Drain It) to inspect the systems and provide him with a quote. Pipe It Drain It inspected the system and provided a brief report. Their comments in respect of the septic system for the cottage were as follows: NO fresh air intake on tank and no filter The tank has a scum level of about 100mm indicating that it could do with a pump out soon. Otherwise system appeared to be working fine at time of visit.
Section 59 RTA states that either the landlord or the tenant may give 7 days’ notice to terminate a tenancy if “the premises are destroyed or are so seriously damaged as to be uninhabitable”.
The type of circumstance contemplated in section 59 is where the premises are physically destroyed or damaged. However, other types of non-physical ‘damage’ could also be grounds for termination under section 59, provided that the premises are uninhabitable. An example of this in recent years is 4 Section 59 RTA methamphetamine contamination to a level that renders the premises not safely habitable 5 .
I accept that, in principle, a septic tank failure could provide grounds for termination under section 59.
However, a 7-day termination notice is a drastic measure that has an extreme impact on tenants.
This was a one-year fixed term tenancy. Ms Pritchard and Mr Mullin reasonably expected security of tenure until at least February 2024. Instead, they were required to vacate the premises and find alternative accommodation within 7 days.
A landlord must be sure of their ground before issuing a 7-day notice.
In this instance, there was simply not enough information available to Barfoot & Thompson for them to reasonably conclude that the cottage was uninhabitable.
Barfoot & Thompson had received brief verbal advice from one drainlayer. The drainlayer’s advice about the cottage’s septic system was limited to about two sentences. Aspects of that advice were puzzling. Mr Spruit told Ms Easterbrook that the cottage tank was “getting old and on the way out”, but Mr Spruit had installed that tank himself in 2020.
Mr Wei’s own evidence shows that the premises are not uninhabitable. His friend moved into the main house shortly after the end of that tenancy. The Council has taken no action. Mr Wei did what should have been done before the 7-day notice was issued - he obtained a second opinion and a written report. The view of that second contractor contradicts Mr Spruit’s.
It is an unlawful act for a landlord to issue a notice of termination knowing that there are not grounds for termination 6 . Exemplary damages of up to $6,500 can apply.
It is not appropriate to make an award of exemplary damages in this instance. I accept that Barfoot & Thompson acted in good faith, based on genuine (and reasonable) concerns about the tenants’ health and safety.
However, I will make an award of compensation. The notice was not justified on the information available at the time. Having to move within a very short timeframe and losing the benefit of the balance of the fixed term tenancy caused significant disruption, inconvenience, and stress for the tenants.
I will award compensation of $1,500.00. 5 Before section 59(5) was added in January 2021 6 Section 60AA RTA Hot water
Ms Pritchard submitted that the property was without hot water from 17 April until 1 May.
The property uses gas for water heating and there was a leak from a gas pipe.
Ms Leane did not have evidence to contradict Ms Pritchard’s timeframe.
I accept that Barfoot & Thompson acted promptly to get the gas problem fixed as soon as possible when it was brought to their attention.
However, hot water is clearly an important amenity and the tenants are entitled to compensation for being without this amenity for two weeks.
The landlords gave the tenants $100.00 compensation for this, but in my view this is insufficient.
An appropriate amount of compensation is one third of the rent for that two week period. This totals $226.67. The landlords must pay a further $126.67. Overpaid rent and compensation
The obligation to pay rent began on 17 February 2023 and ended on 17 August 2023 7 .
This is 26 weeks. The tenants were given a waiver of one weeks’ rent due to an issue with the lawns. This is not disputed by either part
This means that the tenants should have paid 25 weeks of rent at $340.00 week. This is $8,500.00.
The amount of rent that the tenant did pay was $9,520.00. This includes the credit given by the landlord due to the delayed start of the tenancy.
At the end of the tenancy the tenants were refunded $1,020.00.
Therefore, that refund includes compensation for the delayed start but it does not include any other compensation.
The only other compensation given to the tenants is $100.00 for hot water. Outcome
The tenants have been successful in this application, and I must also award the tenants the filing fee 8 . 7 Section 59 RTA 8 Section 102(4) RTA
The tenancy agreement states that Barfoot & Thompson acted “as agents for and on behalf of Frank Wei & Berry Liu”.
In general contract law, agents are not liable on a contract that they enter into for and on behalf of a named principal.
Tenancy law allows for a broader definition of “landlord”, which can include an agent “where appropriate” 9 .
In this instance, Barfoot & Thompson acted as landlord in respect of the tenancy. It received rent, carried out inspections, arranged for maintenance, and it issued notice (in its own name) to terminate the tenancy.
My finding is that Barfoot & Thompson was the landlord and it is appropriate to make the order against them.

Tenancy Tribunal case 4661350 — Healthy homes at 2412A State Highway 10, RD 2, Waipapa 0295, Cottage

At a glance

Tenancy Tribunal case 4661350 — Healthy homes at 2412A State Highway 10, RD 2, Waipapa 0295, Cottage

At a glance

Award balance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions