What was the outcome of Tenancy Tribunal case 4836580?

The tribunal order states: The Bond Centre is to pay the bond of $3,600.00 (6138490-001) immediately

How much money was awarded in case 4836580?

Break Lease Expenses: $1,380.00 awarded to landlord

What type of tenancy dispute was case 4836580?

The dispute type was not classified.

Where can I read the official tribunal order for case 4836580?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10433623-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4836580?

The tribunal order states: The Bond Centre is to pay the bond of $3,600.00 (6138490-001) immediately

How much money was awarded in case 4836580?

Break Lease Expenses: $1,380.00 awarded to landlord

What type of tenancy dispute was case 4836580?

The dispute type was not classified.

Where can I read the official tribunal order for case 4836580?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10433623-Tenancy_Tribunal_Order.pdf.

18 Milano Boulevard, Karaka, Papakura 2113 Tenancy Tribunal Case 4836580 — Tenancy dispute

Claims and awards in Tenancy Tribunal application 4836580 — net $1,380.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Break lease expenses	$1,380.00	Break lease expenses
Net award	$1,380.00
Total payable by Tenant to Landlord	$1,380.00

Claims and awards in Tenancy Tribunal application 4836580 — net $1,380.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Break lease expenses	$1,380.00	Break lease expenses
Net award	$1,380.00
Total payable by Tenant to Landlord	$1,380.00

Order

The Bond Centre is to pay the bond of $3,600.00 (6138490-001) immediately apportioned as follows: Executive Property Management Limited - As Agent For Taha And Anam Mohsin, Taha Mohsin and Anam Mohsin: $1,380.00 Georgia Dijkstra and Lisa Dekker: $2,220.00

Reasons

The landlord and tenant attended the hearing on 6 June 2024 by telephone. The property manager did not attend.
The parties signed a residential tenancy agreement for a fixed term from 18 May 2023 to 17 May 2024. The rent was $1,200.00 per week with a bond of $3,600.00. The tenancy agreement provided that the tenants would not part with possession of the premises during the tenancy. There was permission for a small dog.
The tenant applied to the Tribunal on 14 March 2024, claiming refund of the bond. The application was subsequently amended to include an application for exemplary damages for failing to provide an itemised account.
The landlord applied to the Tribunal on 20 May 2024, claiming payment from the bond for the cost of finding new tenants ($1,380.00). There was also a claim for cleaning outside ($200.00). Background Facts
A summary of the background facts is set out below: • On 14 January 2024, the tenants advised the landlord that they were looking to move back to Auckland. They proposed finding new tenants to take over the tenancy. • The tenants notified the landlord on 18 January 2024 that they had managed to find a new home from 16 February 2024. • The landlord and tenants attended a phone call on 18 January 2024. The tenants emailed following the call, setting out their understanding of what had been discussed. They said there were two possible solutions, either they would find a replacement tenant to take over the fixed term, or the landlord would hire a property agent to find a new tenant: “...if you decide to go with this option as we mentioned...we will pay actual and reasonable costs. Accompanied with an itemised receipt only”. The tenants referred to the landlord advising that it would cost $1,200.00 to hire a property agent. The tenants said they were “taken aback” by this amount. • The landlord responded later on 18 January 2024. The landlord said they wanted to appoint their property manager, Ms M, as this would enable background, reference, and credit checks to be performed. The letting fee Ms M would charge was one week’s rent. The landlord would agree to the tenants engaging their own property agent instead, if this was less expensive. • The tenants emailed again on 21 January 2024. They said it was unreasonable for the landlord to stipulate that engaging their own property agent was the only alternative to going ahead with Ms M. The tenants said the landlord had previously been open to their finding a replacement tenant. The tenants expected “exceptional marketing” from Ms M if they did indeed have to pay a $1,200.00 fee. They again requested an itemised list of the expenses explaining how the $1,200.00 was being spent. The tenants said they should not be expected to pay compensation if the landlord was “too selective” about the replacement tenant. The tenants consented to using the landlord’s property manager but expressed reservations about the flat fee. • On 23 January 2024 the landlord responded. The landlord disputed agreeing to the tenants finding replacement tenants without an agent. The landlord noted that the property had already been advertised by Ms M and had visitors on the first day of being online. The landlord confirmed that an “itemised receipt” would be provided. • The tenants replied later on 23 January 2024. They said they had contacted Ms M to start the advertising and had re-written some of the marketing information which was incorrect or insufficient. They were collaborating with Ms M and making themselves available for viewings. They had conducted a viewing themselves when Ms M was too busy to attend. • The landlord responded in an email on 25 January 2024. The landlord expressed irritation that the tenants had instructed Ms M when there was still an issue over the letting fee. The landlord said they had been aware of errors in the advertising and requested that the tenants leave marketing issues to them. • On 26 January 2024 the property manager advised the tenants that new tenants would be moving in on 24 February 2024 and attached her invoice. When the tenants requested an itemised list, the property manager responded that she always charged one week’s rent plus GST to find suitable replacement tenants. (I note that this tenancy did not proceed). • On 18 February 2024 the landlord advised that new tenants had been found and the last day of the tenancy would be 1 March 2024. • A final inspection and key handover were conducted on 1 March 2024. • The landlord provided the tenants with an invoice from the property manager on 4 March 2024. The tenants objected that the invoice was not itemised, and a further invoice was provided on 18 March 2024. The landlord also raised an issue with dog faeces not having been cleaned up in the garden in several places. Relevant Law
Landlords may include a provision in a tenancy agreement unconditionally prohibiting the tenant from parting with possession of the premises during the tenancy (section 44(1) of the Residential Tenancies Act 1986 (the Act)).
In the absence of such a provision, the tenant may part with possession with the prior written consent of the landlord (section 44(2) of the Act). The landlord must not withhold consent unreasonably or attach any unreasonable conditions to that consent (section 44(3)).
Where the landlord consents to a subletting or parting with possession, the landlord is entitled to recover from the tenant “...any expenses reasonably incurred by the landlord in respect of the...parting with possession...” (section 44A(2)).
A landlord who seeks to recover expenses from the tenant must first provide “an itemised account of the expenses” to the tenant. A landlord who takes any step to recover expenses without providing an itemised account of the expenses commits an “unlawful act” (section 44A(3)).
Exemplary damages up to a maximum of $750.00 may be awarded if the Tribunal is satisfied that the unlawful act was committed intentionally and that, having regard to the prescribed factors, it would be just to require the payment of exemplary damages (section 109(3) of the Act). Recovery of Expenses
The landlord did not have to consent to the early end of the fixed term tenancy. Although badly worded, the “assignment” clause in the general conditions of the tenancy agreement is best viewed as an unconditional prohibition on parting with possession. However, having effectively waived compliance with this clause, in my view the landlord was then under an obligation to not unreasonably withhold consent to parting with possession and not to attach any unreasonable conditions.
The condition the landlord imposed was that the marketing be performed through a property manager they had used in the past. Alternatively, it is clear the landlord wished to reserve the right to decline as unacceptable any proposed replacements suggested by the tenants.
In my view, neither condition was unreasonable. A landlord may decline an assignment to new tenants on grounds relating to their suitability as tenants, for example, their ability to pay the rent. The engagement of the previous property manager meant that the property could be marketed quickly, and proposed replacement tenants could be properly checked for suitability.
The tenants’ overriding concern stands out clearly in text messages to the property manager. They were anticipating they would pay “actual and reasonable expenses” itemised in an account, including receipts and timesheets to calculate the time taken to undertake all tasks at an hourly rate. This was a concern the tenants also expressed repeatedly to the landlord, and it was not an unreasonable view.
In my opinion, however, section 44A of the Act does not preclude a landlord from recovering expenses that have been incurred as part of a fixed (or flat) fee.
The provision enables the landlord to recover “any expenses” reasonably incurred in respect of the assignment. There was evidence before the Tribunal that charging one week’s rent to find replacement tenants where a fixed term is ending early is still common industry practice, even if some property managers charge on an hourly basis. The “actual” expense incurred (and paid by the landlord) was the fixed fee.
I acknowledge the tenants’ view that the invoice ultimately provided was somewhat artificial, because it attempted to provide a breakdown of a fixed fee. Ultimately though, the issue is whether the fee constitutes “expenses” incurred in respect of the parting with possession. I note that section 17A of the Act prohibits letting fees. However, the section specifically excludes section 44A from its ambit, so that a letting fee is not prohibited where a landlord consents to assigning, subletting, or parting with possession. The legislature envisaged that landlords might incur a letting fee as an expense, when consenting to a tenant parting with possession.
I find as a matter of law that the “expenses” recoverable under section 44A of the Act can include a fixed fee in the nature of a letting fee for finding replacement tenants.
The next issue is whether the expenses were reasonably incurred. The invoice dated 14 March 2024 (for $1,380.00) included the following costs: • Property advertising on Trade Me and monitoring ($395.00 plus GST). • Background, reference, and/or credit checks as applicable for prospective tenants ($260.00 plus GST). • Agency fee for processing applications from prospective tenants, organising viewings, liaising with landlords and tenants during the advertising period, and preparing the tenancy agreement and processing of bond lodgement ($545.00 plus GST).
I understand that the advertising charges reflect the typical cost of advertising on Trade Me. I was told that there were at least 4 applications from prospective tenants that had to be processed, including appropriate checks. This also appears to reflect standard charges. There were 6 viewings on separate days although the tenants said they (not the property manager) showed the prospective tenants through the property. It is also noteworthy that advertising started promptly on 23 January 2024. A new tenant was secured on 19 February 2024, with a move in date of 4 March 2024 (I understood the new tenants were allowed to move in over the weekend of 2-3 March).
Having reviewed these charges, which all appear to have been necessary, having had regard to the common practice of charging one week’s rent for such services, and given the need for the property manager to act quickly to secure new tenants, I am satisfied that the expenses were reasonably incurred.
The final issue on this topic is whether the tenants were provided with an “itemised account”. This expression is not defined in the Act. The tenants provided an internet definition of “itemised statement” as meaning a detailed breakdown of charges or expenses presented in a clear and organized manner The tenants submitted the account was not itemised because it did not give a breakdown for the hours worked and corresponding tasks. The Oxford English Dictionary identifies “itemise” as a verb, meaning: “To set down by items or enter as an item, to specify the items of (an account, etc)”.
In my view, the landlord provided the tenant with an “itemised account”. They were provided with a breakdown of the expenses grouped by categories of activity with the corresponding cost.
Even if I am wrong about that, this is not an appropriate case for an award of exemplary damages. The landlord was clearly willing to provide an itemised account, and endeavoured to do so, providing a further invoice when the tenants objected (rightly) that the first attempt at itemisation was inadequate (the first invoice listed the work performed but without itemising the corresponding expenses). Cleaning Outside
The landlord raised the issue of dog droppings after the tenants had left and the new tenants had moved in. It was not an issue noticed at the final inspection on 1 March 2024. There were no photographs taken to support the claim for the cost of cleaning up. The tenants were adamant that they would not have left the property in that condition, and they explained they spent the last several weeks of the tenancy cleaning and tidying. I find that this claim has not been proved to the civil standard of proof. Filing Fee and Suppression
Both parties have had some success in the sense that the outcome is an order for a split bond. I consider the parties should bear their own costs.
The tenants requested name suppression. In my view, they have not been “wholly or substantially” successful as required by section 95A(1) of the Act. I decline to grant suppression.

Tenancy Tribunal case 4836580 — Tenancy dispute at 18 Milano Boulevard, Karaka, Papakura 2113

At a glance

Tenancy Tribunal case 4836580 — Tenancy dispute at 18 Milano Boulevard, Karaka, Papakura 2113

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