What was the outcome of Tenancy Tribunal case 4806657?

The tribunal order states: The landlord and tenant applications are dismissed.

How much money was awarded in case 4806657?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4806657?

The primary dispute was Healthy homes. Related themes: Property damage, Exemplary damages, Boarding House.

Where can I read the official tribunal order for case 4806657?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10143187-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4806657?

The tribunal order states: The landlord and tenant applications are dismissed.

How much money was awarded in case 4806657?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4806657?

The primary dispute was Healthy homes. Related themes: Property damage, Exemplary damages, Boarding House.

Where can I read the official tribunal order for case 4806657?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10143187-Tenancy_Tribunal_Order.pdf.

32 Horsefields Drive, Flat Bush, Auckland 2019 Tenancy Tribunal Case 4806657 — Healthy homes

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Reasons

Both parties attended the hearing on 27 March 2024.

On 13 February 2024, the tenants applied for refund of the bond, exemplary damages for non-lodgement of the bond, and compensation for breach of the Healthy Homes Standards.

On 3 March 2024, the landlords applied for compensation for damage to a benchtop. Background

The parties signed a document entitled “Rental Agreement” for the period 22 March 2021 for a year to 22 March 2022, “then take it year by year basis giving 1 months notice to vacate the unit”. The agreement was dated 22 March 2021.

There is a further signed but undated version of this document. The wording is very similar, with the same start-date for the tenancy. The agreement was for the period to 22 September 2023, continuing on a “year by year” basis with 1 month notice to vacate.

The weekly rent of $420.00 included water, power, and internet.

The “Rental Agreement” did not use the Tenancy Services standard form and did not include all the information required to be included in tenancy agreements by the Residential Tenancies Act 1986 (the Act).

A bond of $840.00 was paid at the start of the tenancy but was not lodged with the Bond Centre.

The tenancy ended on 22 January 2024. The tenants requested refund of the bond on 2 February 2024, at which point the landlords were overseas. Following several further inquiries from the tenants, on 11 February 2024 the landlords referred to a mark on the wall in a bedroom and a burn mark on the kitchen bench. The landlords said they were happy to refund $640.00 from the bond. The tenants responded that the damage was fair wear and tear.

On 17 February 2024 the landlord paid $590.00 to the tenants. On 8 March 2024 the landlord paid a further $250.00. It follows that the bond was reimbursed. Relevant Law

Section 5(1)(n) provides that the Act does not apply: “Where the premises, not being a boarding house, continue to be used, during the tenancy, principally as a place of residence by the landlord or the owner of the premises or by any member of the landlord’s or owner’s family”.

In Harding v Schellevis [2021] NZHC 1265, the High Court considered whether the occupants of a “granny flat” situated within a larger dwelling were boarders or tenants. The upper level of the dwelling had 4 bedrooms, a kitchen, bathrooms, and a living area. The family also used a living room, garage, and laundry downstairs. The ground floor had a separate granny flat comprising 2 bedrooms, a kitchenette, bathroom, laundry and living room.

The granny flat had a separate entrance, a dedicated parking area, and an area outside for the occupants’ exclusive use. Water and power were included in the rent and the occupants arranged their own internet. The landlord could only enter the granny flat for inspections, repairs, and viewings for new tenants. The occupants of the granny flat had no right of entry to the rest of the house.

The High Court said the critical issue was whether the “premises” referred to in section 5(1)(n) were just the granny flat, or the dwelling as a whole including the granny flat. It found that the relevant premises were the granny flat and not the entire dwelling. It gave several reasons: a. The natural meaning of premises contemplates more than one premises within larger premises. b. The definition of premises in the Act includes “any part of any premises”. c. The Act supports a generous approach to jurisdiction and a strict approach to exceptions. d. The right to occupy did not include any areas used by the landlord or her family. There were no shared or common use areas. The landlord could only enter the flat with notice and for the limited purposes in the agreement.

A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received (section 19(1) of the Act).

A breach of the obligation to lodge the bond is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00 (section 19(2) and Schedule 1A of the Act).

Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest (section 109(3) of the Act).

Section 45(1)(bb) of the Act requires compliance with the Residential Tenancies (Healthy Homes Standards) 2019 (the Regulations).

The dates for compliance with the Healthy Homes Standards vary depending on the tenancy (see clause 2(2) of the Regulations). Where a tenancy starts before 1 July 2021, if the tenancy is renewed after 1 July 2021 but before 28 August 2022, the Healthy Homes Standards must be complied with by the 90 th day after renewal. Jurisdiction

The landlord submitted that this was a boarding situation because the premises were attached to the house where the landlords lived and was part of the same physical building.

However, it is clear the downstairs area occupied by the tenants was entirely separate from the area occupied by the landlords. As well as 2 bedrooms, the tenants had a lounge, a bathroom with a shower and washing machine, and a kitchen. They had their own separate entrance.

Both parties confirmed that they had exclusive possession of their respective areas – they were not sharing any rooms and were not permitted to enter the space occupied by the other. There were no common-use areas. They were sharing some facilities, such as the gardens, but this does not change the fact that essentially there were 2 self-contained dwellings.

I find that there were separate premises rather than single premises shared by the landlords and the tenants. I am satisfied that this was not a boarding arrangement and section 5(1)(n) of the Act does not apply to exclude jurisdiction. Lodgement of Bond

The tenancy was subject to the Act and therefore the bond should have been lodged. Not doing so was an unlawful act.

I am not satisfied that it would be just to award exemplary damages against the landlord on this occasion. The failure to lodge the bond followed from the landlord’s misunderstanding about the nature of the tenancy. The informality of the tenancy agreement suggests the landlords were not well versed in the rights and obligations of residential landlords. The effect on the tenants has been ameliorated by the repayment of the bond following the end of the tenancy, although by this time they had applied to the Tribunal.

There was nonetheless a breach of the Act, and lodgement of the bond is an important feature of the statutory regime. It provides protection to tenants and helps ensure that their bonds will not be wrongly retained or misapplied. The tenants had the anxiety of not knowing whether they could recover their bond. It was not refunded until about 7 weeks after the end of the tenancy, and after some negotiation. I award general damages of $250.00 to the tenants for the breach of their legal rights and as compensation for emotional distress. Healthy Homes Standards

The Healthy Homes Standards require the living room of the premises to have a qualifying heater, installed as a fixture, that provides the required heating capacity.

I am not satisfied that the Healthy Homes Standards applied to the premises during the tenancy. The tenancy commenced on 22 March 2021, i.e., prior to 1 July 2021 (clause 2(2)(a) in the Regulations). There was a fixed term from commencement to 22 March 2022 or 22 September 2023, depending on which “Rental Agreement” was intended to be operative. In my view, the original tenancy for a fixed term then continued as a periodic tenancy and was not extended or renewed. If the landlord were now to rent the property to someone else, the Healthy Homes Standards would apply from the 120 th day after the start of the tenancy (clause 2(2)(c) in the Regulations).

The Housing Improvement Regulations 1947 provide that every living room must be fitted with a fireplace or other approved form of heating. In Complete Property Management Ltd v White (District Court Christchurch, CIV-2010-009-3562, 3 February 2011, Judge Macaskill) the Court indicated that the landlord could comply with the requirement to provide a form of hearing by providing a cheap electric heater.

In this case, the landlord said there was a duct providing heating into a room downstairs. They provided a photograph of the outdoor Daikin unit. Further, the property was only a few years old, was not cold, and there was underfloor heating in the downstairs bathroom. The landlords had paid the power charges for 3 winters because this was included in the rent.

It seems that the heating was controlled from the landlord’s premises but there was nonetheless a form of heating. I am not satisfied that there has been a breach of the Housing Improvement Regulations, or if there has, that it would be appropriate to award compensation.

The tenants did ask the landlord if a heat pump was going to be installed in a text on 1 May 2022, based on their understanding of the Healthy Homes Standards. There is no written evidence that the tenants complained about the premises being cold or about a lack of sufficient heating, and they resided through several winters at the property. Damage to Benchtop

A landlord must prove that damage to the premises occurred during the tenancy and is more than fair wear and tear. If this is established, to avoid liability, the tenant must prove they did not carelessly or intentionally cause or permit the damage. Tenants are liable for the actions of people at the premises with their permission.

Where the damage is caused carelessly, and is covered by the landlord's insurance, the tenant's liability is limited to the lesser of the insurance excess or 4 weeks' rent. The landlord said the property was insured with an excess of $500.00.

Tenants are liable for the cost of repairing damage that is intentional or which results from any activity at the premises that is an imprisonable offence. This applies to anything the tenant does and anything done by a person they are responsible for.

The benchtop was damaged during the tenancy. There is no suggestion it was deliberate. The landlord’s photographs show white blemishes on the surface of the benchtop, which was made from engineered stone. The photographs also show a circular mark, most probably from a pot or pan.

The tenants said they had spoken to Tenancy Services who advised this was wear and tear. They also suggested that the marks were caused by sun damage.

It is difficult to know what caused the blemishes on the benchtop. There is no blind over the kitchen window in the landlord’s photographs, although the landlord argued that only a small area of the benchtop would get afternoon sun. The blemishes could have been caused by use, from the sun, or they could conceivably be a defect inherent in the product. I am unable to find that the tenants carelessly caused the blemishes.

The burn mark is different in my view. I consider it would be careless to place a hot pan directly onto the benchtop. There was only 1 burn mark, and the benchtop could still be used without repairs, but this did at least result in a loss of aesthetics and therefore value. The burn is more than fair wear and tear.

The landlord provided a quote for repairs to the benchtop for $517.50 which suggested trying a deep clean to remove the blemishes and the burn mark. I award $250.00 on the basis that the burn mark was caused by the tenants, but the blemishes were not. Conclusion

The outcome in the proceedings is that both parties have been awarded the same compensation. Setting off the amounts awarded means that neither party owes the other anything.

To give effect to this outcome, the appropriate order is to dismiss both applications. Filing fee and suppression

Both parties have had some success. I consider it is appropriate that they bear their own costs.

Both parties requested suppression. Neither party was “wholly or substantially” successful (section 95A(1) of the Act). I therefore decline suppression.