What was the outcome of Tenancy Tribunal case 4937274?

The tribunal order states: Main Real Estate Limited must pay The Chief Executive, Ministry of Business,

How much money was awarded in case 4937274?

Property Damage: $1,000.00 awarded to tenant; Filing Fee: $27.00 awarded to tenant

What type of tenancy dispute was case 4937274?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4937274?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/12330380-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4937274?

The tribunal order states: Main Real Estate Limited must pay The Chief Executive, Ministry of Business,

How much money was awarded in case 4937274?

Property Damage: $1,000.00 awarded to tenant; Filing Fee: $27.00 awarded to tenant

What type of tenancy dispute was case 4937274?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4937274?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/12330380-Tribunal_Order.pdf.

Unit/Flat 2, 17 Hauiti Road, Otahuhu, Auckland 1062 and Tenancy Tribunal Case 4937274 — Exemplary damages

Claims and awards in Tenancy Tribunal application 4937274 — net $1,027.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages (failure to comply with an improvement notice	$1,000.00	Exemplary damages (failure to comply with an improvement notice
Filing fee reimbursement	$27.00	Filing fee reimbursement
Net award	$1,027.00
Total payable by Landlord to Tenant	$1,027.00

Claims and awards in Tenancy Tribunal application 4937274 — net $1,027.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages (failure to comply with an improvement notice	$1,000.00	Exemplary damages (failure to comply with an improvement notice
Filing fee reimbursement	$27.00	Filing fee reimbursement
Net award	$1,027.00
Total payable by Landlord to Tenant	$1,027.00

Order

Main Real Estate Limited must pay The Chief Executive, Ministry of Business, Innovation, and Employment on behalf of the Tenant(s) $1,027.00 immediately, calculated as shown in table below:

Reasons

Both parties attended the hearing, and both were represented by Counsel.
The Chief Executive (the Chief Executive), Ministry of Business, Innovation, and Employment (MBIE) has filed a claim against Main Real Estate Ltd as landlord of 12 specific tenancies and in relation to its rental portfolio generally (listed as “Annex A” to the Chief Executive’s Statement of Facts).
The application is made by the Chief Executive pursuant to s109(1)(c) of the Residential Tenancies Act (RTA) as the person responsible for the general administration of the RTA.
The Chief Executive claims that Main Real Estate Limited committed an unlawful act under s 126J(1) of the RTA, in that it failed to comply with an improvement notice.
The Chief Executive seeks an order for exemplary damages not exceeding $3,000. See ss 109 &126J(1) RTA. Procedural Background
The parties attended a Case Management Conference by telephone in February 2025. Main Real Estate Ltd was not represented at that time.
The purpose of the Case Management Conference was to understand the claims and make any directions required prior to a substantive hearing.
Following the Case Management Conference, I issued a directions order noting: a. MBIE has applied for exemplary damages. It says that the Respondent has breached its obligations under s126J(1) Residential Tenancies Act 1986 (RTA) by failing to comply with an improvement notice issued on 28 August 2024. b. The details of MBIE’s application are set out in its Statement of Facts document. MBIE has also provided three witness statements, and exhibit list and 131 pages of exhibits. The Tribunal file records that the documentation was sent to the Respondent by Courier on 15 January 2025. c. The Respondent submitted documents before the Case Management Conference which suggest that it either had not read the full documentation or did not understand the nature of this claim and the allegations in it. d. The Respondent indicated that it wanted to obtain legal advice.
I then directed Main Real Estate Ltd to provide a Response to the Statement of Facts. That document was to set out brief responses (bullet point) to each of the numbered paragraphs in the Statement of Facts.
After obtaining legal advice Main Real Estate Ltd provided its response to the statement of facts.
It accepted all the facts alleged by the Chief Executive, except it said that some of the Tenancy Agreements were between property owners and the respective tenants. Main Real Estate Ltd did not specify which of the agreements it was referring to. Accepted Facts
It is not necessary to set out the Statement of Facts (SoF) in full. The critical agreed facts are as follows: a. Main Real Estate Ltd is a landlord as defined in s2 RTA (para 4 SoF). b. Main Real Estate Ltd rents properties to residential tenants, s4 RTA (para 5 SoF). c. Main Real Estate Ltd entered into residential tenancy agreements with tenants (para 6 SoF). d. The Tenancy Compliance & Investigations Team (TCIT) of MBIE issued an Improvement Notice under the RTA because of the reasonable belief that Main Real Estate Ltd has contravened or is likely to contravene the RTA (para 8 SoF). e. TCIT undertook a proactive review of Main Real Estate’s business practices in March 2023. Following that review, MBIE requested certain documentation by 5 April 2023. Main Real Estate provided some of the requested documentation between 15 and 30 June 2023 (paras 10 to 16 SoF). f. MBIE requested further information as part of their investigation on 5 July 2023. Some information was provided and MBIE’s investigation was completed on 28 August 2023 (paras 17 to 22 SoF). g. MBIE identified that several clauses within tenancy agreements provided during the investigation contravened or were likely to contravene the RTA, in the following respects (paras 21 & 29 SoF): i. Section 13A(1)(h) – Contents of Tenancy Agreement – No provision to confirm whether the tenant is under 18. ii. Section 13A(1A) – Contents of Tenancy Agreements – No insulation statement. iii. Section 13A(2) – Contents of Tenancy Agreements – No insurance statement. iv. Section 13A(1CA) – Contents of Tenancy Agreements – No intent to comply with Healthy Homes Standards. v. Section 13A(1CB) – Contents of Tenancy Agreements – No Healthy Homes Compliance Statement. vi. Section 45(1)(bb) – Comply with Healthy Homes Standards. vii. Section 137 – Prohibited Transactions – Adding clauses to Tenancy Agreements which go beyond the statutory obligations of tenants. h. MBIE issued an Improvement Notice on 28 September 2023. The date for providing evidence to show compliance with the Notice was 26 October 2023 (para 22 SoF). i. On 26 October 2023 Main Real Estate had failed to supply evidence to show compliance with the Improvement Notice (para 23 SoF).
In addtion to the agreed facts, I note that the Improvement Notice clearly sets out the affected tenancies, the nature and exent of the alleged contraventions, recommendations for compliance and the time period for remedying the contrvention or providing evidence of compliance. The Law
The relevant provisions of the RTA are set out below.
Section 126H provides the Chief Executive with the ability to issue improvement notices. It states:
Section 126I sets out the content required in an improvement notice, as follows:
Section 126J then addresses the situation of the party failing to comply with an improvement notice:
The RTA also sets out a process upon which a landlord can object to an improvement notice, as follows: Decision
Notwithstanding the agreed statement of facts, Main Real Estate Ltd disputed liability. So, I must decide whether exemplary damages can be ordered for a claimed failure to comply with the improvement notice.
The RTA sets out specific provisions that apply for improvement notices, and they must be complied with strictly. I am satisfied that the notice issued on 28 September 2023 did comply with the requirements for the notice under section 126I. That provision in broad requires that the notice set out the nature of the breach, but the notice can set out non-mandatory recommendations to remedy the breach, which it did.
It is important to recognise that while recommendations were made in this case, it is not an unlawful act if the Landlord elected not to follow those recommendations, the Landlord could take some other course in order to remedy the breach. So, when I consider this application, I am not considering whether the Landlord failed to implement the recommendations, but whether the Landlord failed to address the specific breaches (set out at 12g above).
Main Real Estate Ltd provided sparse evidence in relation to the issues for determination. It, belatedly, provided a lot of evidence if attempts to comply with the improvement notice. It argued that some (unspecified) tenancy agreements in its portfolio were between property owners and tenants directly.
The statutory scheme anticipates that unless the landlord files an objection to the notice within 28 days under section 126M, that the breaches are deemed to have occurred. In this case the Landlord has not objected to the notice, so it is now too late for the Landlord to attempt to argue that there has not been any breach.
The tenancy agreement provided by the Chief Executive in evidence were between Main Real Estate and tenants. Where Main Real Estate was acting as agent, it had prepared and signed the tenancy agreement.
It is apparent that Main Real Estate Ltd were using an out-of-date template agreement which did not comply with the current requirements of the RTA (as set out in 12g above). The agreements also purported to impose greater obligation on tenants than imposed by the RTA.
The evidence to be provided under the improvement notice includes; a. Copies of the tenancy agreements showing the relevant changes to the terms including insulation, insurance, healthy homes compliance, and healthy homes intent to comply statements. b. Copies of correspondence sent to affected tenants advising of the updated terms and the provision of insulation, insurance, healthy homes compliance, and healthy homes intent to comply statements. c. Evidence of all affected properties meeting the healthy homes standards (heating, ventilation, draught stopping and moisture ingress and drainage).
Main Real Estate took no steps to address these issues or to demonstrate compliance by the date specified in the improvement notice; by 26 October 2023. Put simply, Main Real Estate Ltd, failed to act on the Improvement Notice at all by the due date. That failure to comply with the improvement notice amounts to an unlawful act under the RTA.
I must then consider whether to award exemplary damages.
Exemplary damages are intended to be punitive rather than compensatory. Moreover, the quantum of any exemplary damages awarded may not exceed the maximum prescribed in the Act which in this case amounts to $3,000.
Based on the agreed facts, the Chief Executive submitted that the respondent ought to be made to pay exemplary damages because, in respect of the factors under s 109(3): a. Intent of the person committing the unlawful act — the respondent acknowledged receipt of the improvement notice. It was aware of the contents of the improvement notice, including the requirement for the respondent to provide evidence by the stated due date. b. Effect of the unlawful act — the principal effect of the respondent’s unlawful act was that the tenants of the premises in question were deprived of the benefit of having insurance statements, insulation statements, healthy homes compliance statements, etc., included in their respective tenancy agreements. The respondent’s unlawful act also undermined, in a general sense, the legal obligation of landlords to provide those statements to the tenants upon commencing their respective tenancies. c. Interest of the tenants against whom the unlawful act was committed — the tenants’ collective interest is the vindication of their rights under the Act. d. Public interest — the public interest requires that the respondent (and other landlords) be penalised for, and discouraged from, committing breaches of the Act—particularly in regard to providing essential documentation in tenancy agreements.
The applicant submits that the respondent’s failure to comply with the improvement notice is moderately serious and affected a significant number of tenancies. Therefore, a starting point in the midpoint of the maximum awardable sum may be appropriate, e.g. $1,500. The Chief Executive also acknowledged that Main Real Estate’s belated attempts (in 2025) to demonstrate compliance may justify a small discount.
Main Real Estate argued that it had been affected by illness of the director, had been let down by staff and by owners not provided the correct information. It provided limited evidence in respect of any of those matters.
Further, it should know what is required from its owners and require that information before accepting management of each of the premises. While not clearly articulated, and contrary to the agreed statement of facts, Main Real Estate Ltd seemed to suggest that it was not a “landlord”. I do not accept that argument, I apply the agreed statement of facts and (alternatively) adopt the rationale in Abdulla Moussa Ragab Hamouda v Gralin Property Management (Auckland Central) Limited [2024] NZDC 16642 to find that Main Real Estate Ltd is a “landlord”.
Main Real Estate Ltd were aware of the improvement notice when it was served. Even at the time of hearing, some 18 months later, the Notice still had not been completely complied with.
I am satisfied that the Landlord has acted intentionally in failing to comply with the improvement notice. The effect of the unlawful act is that tenants have not had the benefit of mandatory information regarding their tenancies. There are strong interests for tenants to have any defect with the agreement corrected without delay. There is a very strong public interest that landlords comply with improvement notices when they are issued, given the role TCIT have in protecting the public. See The Chief Executive, Ministry of Business, Innovation and Employment v Property Management Wellington Ltd [2023] NZTT 4453805 regarding a property manager’s failure to comply with an improvement notice.
The maximum levels of exemplary damages are set out in Schedule 1A RTA, which for a breach of s126J is $3,000.00. In this case, I have decided an Order of $1,000, or one third of the maximum. In setting that level, I have taken account of a range of factors: a. Including the approach the landlord as taken with TCIT throughout its investigation and following. b. The lengthy delay in even attempting to demonstrate compliance with the RTA. c. Health issues experienced by the director and principal of Main Real Estate.

Tenancy Tribunal case 4937274 — Exemplary damages at Unit/Flat 2, 17 Hauiti Road, Otahuhu, Auckland 1062 and

At a glance

Tenancy Tribunal case 4937274 — Exemplary damages at Unit/Flat 2, 17 Hauiti Road, Otahuhu, Auckland 1062 and

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