What was the outcome of Tenancy Tribunal case 5031048?

The tribunal order states: The Tribunal declares that the fixed-term tenancy between Qihong Cai

How much money was awarded in case 5031048?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5031048?

The primary dispute was Rent arrears. Related themes: State of repair, Cleanliness, Healthy homes, Exemplary damages, Mould & damp, Leaks.

Where can I read the official tribunal order for case 5031048?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11404623-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 5031048?

The tribunal order states: The Tribunal declares that the fixed-term tenancy between Qihong Cai

How much money was awarded in case 5031048?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5031048?

The primary dispute was Rent arrears. Related themes: State of repair, Cleanliness, Healthy homes, Exemplary damages, Mould & damp, Leaks.

Where can I read the official tribunal order for case 5031048?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11404623-Tribunal_Order.pdf.

21 Welland Place, Hillcrest, Auckland 0627 Tenancy Tribunal Case 5031048 — Rent arrears

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Order

Claims and awards in Tenancy Tribunal application 5031048. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
to Eriin Grancia Investment Limited at the end of 5 February 2025. 3. The Bond Centre is directed to immediately pay the	$2,520.00		to Eriin Grancia Investment Limited at the end of 5 February 2025. 3. The Bond Centre is directed to immediately pay the

The Tribunal declares that the fixed-term tenancy between Qihong Cai and Eriin Grancia Investment Limited for 21 Welland Place, Hillcrest, Auckland has ended. 1

Possession is granted to Eriin Grancia Investment Limited at the end of 5 February 2025.

The Bond Centre is directed to immediately pay the bond of $2,520.00 (Bond number 5933082-004) to Eriin Grancia Investment Limited.

The Tribunal declares that Qihong Cai is not liable to pay the landlord any more rent than he has already paid.

All other claims are dismissed. 1 The Tribunal made this declaration in its interim order, dated 5 February 2025.

Reasons

I heard this claim at the Auckland District Court on 5 February 2025.

Qihong Cai was represented by Tim Cai. A Cantonese interpreter also assisted him.

Eric Liu, Eriin Grancia’s director attended for the landlord. The premises is Eriin Grancia’s only significant asset.

The tenant seeks orders: that the tenancy agreement be declared void and that all rent he has paid is refunded to him, and that he is not liable to pay any more rent than he has paid. Background

The premises has a three-bedroom, 1970s brick and tile house with a floor area of about 120m 2 . It is situated on a landscaped 600m 2 section.

From the photographs, the house is structurally sound. However, the walls, internal window frames and ceilings need refreshing. The wallpaper is old, stained, and peeling off. The kitchen’s window frame needed sanding and painting. The bathroom’s ceiling has mould-type stains. The ceiling and walls, in general, are in poor condition. The walls and ceilings need cleaning, sanding, repainting, and re-wallpapering. One of the bedroom doors has a big dent in it. It needs repair. The carpet in the living room and a bedroom have some badly stained areas. They should be patched.

The tenant is a newly arrived immigrant to New Zealand. He speaks Cantonese but little English. He had little understanding of New Zealand’s residential tenancy laws when he viewed the premises and signed the tenancy agreement.

The tenant viewed the premises on 7 September 2024. When the previous tenants were still in occupation. The tenant says he told Mr Liu he was concern about the cleanliness of the premises and Mr Liu assured him that the premises would be cleaned prior to his tenancy commencing.

On 12 September 2024, the tenant signed a tenancy agreement which committed him to a fixed-term tenancy commencing 1 October 2025 and ending 30 September 2025.

The rent was set at $630.00 per week. That amount is at the lower level of the general market rent for a three-bedroom house for this area. 2 The relatively low rental reflects the house’s interior’s worn condition. 2 Tenancy Services bond data for 1 June – 30 November 2024. The average lowest quartile rent for a three-bedroom house in Hillcrest is $679.00 per week.

Despite committing to rent the premises, did not move in on 1 October 2024 as intended. In fact, he has never moved in.

The tenant in his version of events, explains that when he went to the premises on 29 September 2024, two days before the tenancy commencement date: [He]...noticed signs of water damaged, mould in multiple locations with the house, there was also a scent of animal urine and defecation where the house is vacant. Mr Cai asked whether it is possible to cover the mould with new paint, he was told int would cost another $100 per week because ‘a fully renovated house wouldn’t be at this price...’

The next day, the landlord confirmed that the carpet had been cleaned. However, the tenant says that when he inspected the premises he found, “most of the issues are not resolved”.

The tenant says that he doubted the house complied with the HHS. He claims the landlord refused to accept the house did not comply and refused to have any work done to ensure compliance. The landlord refutes that. He says he was aware that the house needed a heater, and might need other issues attended to, but he had 120 days to comply, and he would comply within that time.

The landlord had self-assessed the premises for compliance with the HHS, finding the only HHS standard that the house did not comply with was the heating standard because the premises did not have a heater.

The tenant commissioned his own HHS report. A contract conduced the HHS inspection on 6 October 2024. The assessor’s report states the house did not comply for insulation (the ceiling insulation needed topping up), ventilation (the extractor fans did not vent to the outside), heating (there was no heater), draught-stopping (there was a minor gap and a broken window), nor moisture ingress (guttering needed cleaning, two gutters had disconnected, a ground cover was needed).

The landlord addressed all of the issues within the statutory period, albeit the tenant has never moved in so cannot enjoy the improvements. He says the previous tenant never had a pet inside, so the alleged animals odours did not exist. The carpets, he says, were thoroughly cleaned.

The landlord submits the tenant got cold feet on the tenancy for some reason. He considers the house was sound. He attended to the HHS issues within the statutory period. He would have dealt with any other issues the tenants reasonably raised. However, the tenant had made a unilateral decision not to move in and was not open to discussing alternatives.

Regrettably, the parties could not resolve this matter earlier. It has dragged on longer than they both would have liked.

Is the tenancy agreement void due to misrepresentation?

The tenant’s principal argument was that the tenancy agreement should be found void due to the landlord making misrepresentations about the premises. Legal principles

If there was a misrepresentation of a term of the contract that was essential to the agreement, or would substantially reduce the benefit of the contract, the affected party may be entitled to cancel the contract. 3

If that term induced the innocent party to enter the agreement, then damages may also be available under s 35 of the Contract and Commercial Law Act 2017.

A misrepresentation occurs when one party makes a representation to another party that the subject of the representation has a certain quality. For example, saying that a dishwasher was brand new, when it was second-hand. Discussion

The tenancy agreement records that the premises complied with the HHS for insulation, ventilation, draught-stopping, and drainage/water ingress. That information is evidence that the landlord represented to the premises as already met those standards.

The tenant’s HHS report shows that the house did not currently meet any of those standards. The ventilation standard required that the extractor fans be ducted to the outside, not the ceiling cavity. The insulation needed to be topped up. The draught-stopping standard required one door gap to be sealed and a broken window to be repaired. The drainage standard required some minor guttering repairs, for the guttering to be cleaned, and a ground cover installed.

The work required to meet the standards was modest and achievable, and the landlord met the standards within the requisite period.

Although, several standards were not met (despite the landlord representing that they were), the unmet standards here were caused by things that did not seriously detract from the premises’ habitability. The tenant submitted the walls had high moisture readings. 3 Section 37 of the Contract and Commercial Law Act 2017.

However, there are no signs of actual water ingress. The tenant took photographs of the bathroom ceiling on 22 December 2024 that show mould- type stains, but the house had not been lived in for over two months, so it is probable that any mould (or more likely staining from mould) appeared much worse than on 1 October 2024, almost three months earlier. Although the extractor fans did not vent to the outside, they did vent to the ceiling cavity, and the insulation was not damp or mouldy. Nor was it proven that damp was getting into the ceiling itself. The cracked window does not appear to have any gaps, albeit it needed fixing. The house needed a heater, but the tenant could have used a temporary heater if he had actually moved in. Only one door needed a draught seal, which was an easy fix. The ground cover was also a straightforward fix.

In summary, the photographs show that the interior was tatty and in need of refurbishment, not that poor insulation, ventilation and the like was causing pervasive mould, cold or other problems made the house unhealthy or uninhabitable.

On 30 September 2024, the day before he was supposed to move in the tenant We-chatted the landlord: Mr Liu, I talked to a colleague today. Rental property needs to provide a healthy home report certificate. My child has skin allergies.

The landlord responded: This was included in the rental agreement we signed.

At the time of the declining to move in, the tenant did not identify what particular HHS-related problem he had with the premises that meant he could not move in. He only referred to his son having “skin allergies”.

Nor was the tenant even aware that the house did not meet the HHS then. He only found that out after his HHS report was completed a week later. Although, the interior was tatty, the photographs do not show the premises must be substantially in breach of the HHS standards.

Once the tenant received the HHS report, he did not forward it to the landlord to give the landlord the opportunity to discuss the finding and address them. Instead, he filed a claim in the Tribunal with the objective of being released from the tenancy.

I do not accept that the tenant did not move into the premises because the landlord refused meet the HHS standards, or that the landlord had misrepresented the premises compliance with the HHS.

Nor did the landlord have to provide the tenant with a professional HHS assessment (although that would have been desirable). Landlords are permitted to carry out their own assessments.

I do not consider the tenant has given the Tribunal a complete account of the reasons he did not move into the premises. The reasons he has given do not explain it.

The tenant has not proven that the landlord misrepresented a term of the contract that was essential to the agreement, or that would substantially reduce the benefit of the contract.

The landlord’s misrepresentations were innocent, not essential, and did not substantially reduce the contract’s benefit. I am not satisfied that the misrepresentations were logically linked to the tenant deciding not to move into the premises.

In the tenancy agreement, the landlord contracted to meet the HHS. It had 120 days to do so. The compliance date was by 28 January 2025. The landlord has provided evidence that it complied with the HHS by then. Conclusion

The tenant’s claim that the tenancy agreement was induced by a material misrepresentation is dismissed.

Was the premises provided in a reasonable standard of repair?

Whilst the tenant’s misrepresentation claim is not substantiated, the photographs showed that the landlord did not provide the premises in a reasonable standard of repair.

The tenant’s recollection of a telephone conversation included that he asked the landlord “whether it is possible to cover the mould with new paint, he was told int would cost another $100 per week because ‘a fully renovated house wouldn’t be at this price...’”. Legal principles

Under s 45(1)(b) of the Residential Tenancies Act 1969 (RTA), landlords must provide the premises in a reasonable state of repair. That provision provides: 45 Landlord’s responsibilities (1) The landlord shall— (a) ... (b) provide and maintain the premises in a reasonable state of repair having regard to the age and character of the premises and the period during which the premises are likely to remain habitable and available for residential purposes...

Landlords are liable for defects that they have knowledge of. They must repair defects within a reasonable time once they acquire such knowledge. 4

Tenants have a duty to notify the landlord, as soon as possible after discovery, of any damage to the premises, or of the need for any repair. 5 However, Landlords also have an obligation to repair things that are apparent from observation: 6 However, notice from the tenant is not needed if the landlords knew of the need for repair or the need for repair is apparent from observation... Discussion

In this case, the need for repair is apparent from observation.

It is expensive to rent in Auckland. Tenants may benefit from renting homes that are not in a freshly renovated condition if the weekly rent it less as a result. However, a landlord’s deliberately renting out a lower standard premises at an attractively lower rent can only go so far.

Obviously, a landlord cannot rent out a home that is leaking and mouldy cannot no matter how reasonable the rent may be. But even if the house is fundamentally sound, there is a point at which even cosmetic issues such as stained and old wall coverings and ceilings will mean that the premises fall below a standard of reasonable repair as required by the RTA.

Nor can a landlord contract out of their duty to provide the premises in a reasonable state of repair by seeking a waiver from their tenant. 7

I am satisfied that the photographs prove that the landlord was in breach of its duty to provide the premises in a reasonable state of repair.

Mr Liu operated the rental business of the landlord company. He is not a professional property manager. Due to his relative inexperience, he erred in assessing the premises as being in a reasonable state or repair. It was not. The wallpaper was stained and peeling. The ceilings in general and especially the bathroom ceiling needed repainting. The premises should not have been let in that condition. 4 Stewart Benson Residential Tenancy Law in New Zealand (2018) Thomson Reuters at 6.18. 5 RTA, s 40(1)(d). 6 See n 2. 7 Residential Tenancies Act 1986 (RTA), s 11.

Similarly, Mr Liu also erroneously assessed the home’s ventilation, insulation, draught-stopping, and drainage and water ingress standards. Those matters also go to whether the home was in a reasonable standard or repair. Manner the Tribunal must exercise its jurisdiction

The Tribunal must decide cases before it according to the “general principles of law...and the substantial merits and justice of the case”. Section 85 of the RTA provides 85 Manner in which jurisdiction is to be exercised (1) Subject to the provisions of this Act and of any regulations made under this Act, the Tribunal shall exercise its jurisdiction in a manner that is most likely to ensure the fair and expeditious resolution of disputes between landlords and tenants of residential premises to which this Act applies. (2) The Tribunal shall determine each dispute according to the general principles of the law relating to the matter and the substantial merits and justice of the case, but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities. Bond

If the tenant applies to the Tribunal, the landlord should file an application with the Tribunal that sets out the landlord’s counterclaim in respect to the bond. 8

In this case, the landlord did not file a formal application. However, Mr Liu set out a detailed counterclaim before me supported by carefully complied documents. The landlord also attended mediation and presented its case there. The landlord therefore complied with his duty to file a counterclaim in substance.

I consider that is fair that the bond is paid out to the landlord. The tenant bound himself to a fixed term tenancy. He got cold feet. I do not consider that cancellation of the contract or damages for misrepresentation are warranted. Rent arrears

The Tribunal ordered the tenancy to be terminated and possession to the landlord at the end of 5 February 2024.

On that basis, the tenant still owes the landlord rent arrears of $1,440. 8 RTA, s 22B(2).

It was my intention at the hearing to make an order that the tenant pay those arrears. However, upon reflection, I consider the Tribunal needs to take more account of the landlord’s contribution to what occurred in addition to ending the tenancy early.

The landlord provided the house below an acceptable standard. The landlord incorrectly assessed the home’s compliance with the HHS.

If the tenant had brought a claim for exemplary damages for the landlord failing to provide the premises in a reasonable state of repair, the Tribunal would likely have been inclined to have awarded exemplary damages. 9

The tenant was a new arrival to New Zealand and did not understand his rights and did not progress his claim as effectively as he could have due to inexperience.

Having regard to the need to ensure fairness and the substantial merits of the case, I have decided it is just to order that the tenant be forgiven the $1,440.00 rent arrears. Filing fee

Each party has had a degree of success in their respective applications.

Therefore, no orders are made for reimbursement of the filing fees.

Order

Claims and awards in Tenancy Tribunal application 5031048. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
to Eriin Grancia Investment Limited at the end of 5 February 2025. 3. The Bond Centre is directed to immediately pay the	$2,520.00		to Eriin Grancia Investment Limited at the end of 5 February 2025. 3. The Bond Centre is directed to immediately pay the