What was the outcome of Tenancy Tribunal case 4892800?

The tribunal order states: The application is dismissed.

How much money was awarded in case 4892800?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4892800?

The dispute type was not classified.

Where can I read the official tribunal order for case 4892800?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10430725-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4892800?

The tribunal order states: The application is dismissed.

How much money was awarded in case 4892800?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4892800?

The dispute type was not classified.

Where can I read the official tribunal order for case 4892800?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10430725-Tenancy_Tribunal_Order.pdf.

14 Frye Crescent, Albert Town, Wanaka 9305 Tenancy Tribunal Case 4892800 — Tenancy dispute

Order

The application is dismissed.

Reasons

Both parties attended the hearing on 7 June 2024.
The premises are at 14 Frye Crescent, Albert Town (“the premises”).
The weekly rent on the premises increased from $925.00 to $1,100.00 on 22 May 2024.
The tenant has applied for a market rent assessment. 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.
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.
It is essentially a 2-stage process. The Tribunal must first determine what the market rent is and then decide if the current rent would substantially exceed it. Evidence
The tenant says that the rent should be assessed on this being a four- bedroom house. The landlord says that it should be assessed as a five- bedroom house, although the landlord accepts that the lounge area is small when the house is configured as 5 bedrooms.
The house was constructed in 1997 and has subsequently been added to. The house is between 160 and 190 sqm. Neither party was able to be absolutely precise as to this detail. The section size is 800sqm according to the tenant with the landlord indicting that it is larger at 1,000sqm.
The premises are rented on a fully furnished basis.
Recent renovations have been carried out including the installation of double glazing and repainting.
The tenant makes reference to the Tenancy Services market rent information. That information is updated monthly and contains information from the previous six months excluding the most recent month. The information is not determinative of the rental market and the Tenancy Services website records that it is a guide and should not be used alone to determine the market rent of any property. The market rent for Albert Town records the rent for 4-bedroom houses in Albert Town as having a lower quartile of $850, a median of $950.00 and an upper quartile of $1,100.00.
The tenant has also provided information gathered from Trade Me relating to rental properties in both Wanaka, Albert Town and surrounding suburbs. It difficult to say how applicable those properties are in determining a market rent as the pool of properties in Albert Town which could be said to be very similar to the premises is very small. Wanaka is close by but cannot be said to be an identical market.
Possibly the most relevant property as a comparison is at 24 Frye Crescent, Albert Town. It is a newer build, is smaller, has 3 bedrooms and a sleep out, has single glazing and is rented fully furnished. The weekly rent for that property is $1,050.00.
The other 4 bed Albert Town properties are both on Sherwin Ave and are rented at $1,000.00 and $900.00 per week respectively.
Having reviewed the available evidence of comparable premises in the locality, I consider that the market rent for the premises configured as either a four bedroom plus lounge or 5 bedroom plus very small lounge in Albert Town is $1,050.00.
Having reached that decision, I must consider if $1,100.00 per week exceeds $1,050.00 by a substantial amount. The difference is less than 5 % and at that level can be described as minor. I find that the rent at $1,100.00 per week whilst more than the market rate, does not exceed the market rate by a substantial amount and the application is dismissed.

Order

The application is dismissed.

Reasons

Both parties attended the hearing on 7 June 2024.
The premises are at 14 Frye Crescent, Albert Town (“the premises”).
The weekly rent on the premises increased from $925.00 to $1,100.00 on 22 May 2024.
The tenant has applied for a market rent assessment. 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.
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.
It is essentially a 2-stage process. The Tribunal must first determine what the market rent is and then decide if the current rent would substantially exceed it. Evidence
The tenant says that the rent should be assessed on this being a four- bedroom house. The landlord says that it should be assessed as a five- bedroom house, although the landlord accepts that the lounge area is small when the house is configured as 5 bedrooms.
The house was constructed in 1997 and has subsequently been added to. The house is between 160 and 190 sqm. Neither party was able to be absolutely precise as to this detail. The section size is 800sqm according to the tenant with the landlord indicting that it is larger at 1,000sqm.
The premises are rented on a fully furnished basis.
Recent renovations have been carried out including the installation of double glazing and repainting.
The tenant makes reference to the Tenancy Services market rent information. That information is updated monthly and contains information from the previous six months excluding the most recent month. The information is not determinative of the rental market and the Tenancy Services website records that it is a guide and should not be used alone to determine the market rent of any property. The market rent for Albert Town records the rent for 4-bedroom houses in Albert Town as having a lower quartile of $850, a median of $950.00 and an upper quartile of $1,100.00.
The tenant has also provided information gathered from Trade Me relating to rental properties in both Wanaka, Albert Town and surrounding suburbs. It difficult to say how applicable those properties are in determining a market rent as the pool of properties in Albert Town which could be said to be very similar to the premises is very small. Wanaka is close by but cannot be said to be an identical market.
Possibly the most relevant property as a comparison is at 24 Frye Crescent, Albert Town. It is a newer build, is smaller, has 3 bedrooms and a sleep out, has single glazing and is rented fully furnished. The weekly rent for that property is $1,050.00.
The other 4 bed Albert Town properties are both on Sherwin Ave and are rented at $1,000.00 and $900.00 per week respectively.
Having reviewed the available evidence of comparable premises in the locality, I consider that the market rent for the premises configured as either a four bedroom plus lounge or 5 bedroom plus very small lounge in Albert Town is $1,050.00.
Having reached that decision, I must consider if $1,100.00 per week exceeds $1,050.00 by a substantial amount. The difference is less than 5 % and at that level can be described as minor. I find that the rent at $1,100.00 per week whilst more than the market rate, does not exceed the market rate by a substantial amount and the application is dismissed.

Tenancy Tribunal case 4892800 — Tenancy dispute at 14 Frye Crescent, Albert Town, Wanaka 9305

At a glance

Claims & awards

Tenancy Tribunal case 4892800 — Tenancy dispute at 14 Frye Crescent, Albert Town, Wanaka 9305

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