What was the outcome of Tenancy Tribunal case 5192454?

The tribunal order states: The Tribunal makes the following declarations:

How much money was awarded in case 5192454?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5192454?

The primary dispute was Rent arrears. Related themes: Cleanliness, Exemplary damages.

Where can I read the official tribunal order for case 5192454?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11698983-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 5192454?

The tribunal order states: The Tribunal makes the following declarations:

How much money was awarded in case 5192454?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5192454?

The primary dispute was Rent arrears. Related themes: Cleanliness, Exemplary damages.

Where can I read the official tribunal order for case 5192454?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11698983-Tenancy_Tribunal_Order.pdf.

Unit/Flat 3, 54 Kelburn Parade, Kelburn, Wellington 6012 Tenancy Tribunal Case 5192454 — Rent arrears

Claims and awards in Tenancy Tribunal application 5192454. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
Act 1986 by failing to lodge Mr Jackson’s bond within 23 working days after payment was received. 2. The landlord must p	$27.00		Act 1986 by failing to lodge Mr Jackson’s bond within 23 working days after payment was received. 2. The landlord must p

Order

The Tribunal makes the following declarations: a. That the landlord was permitted to seek payment of Mr Jackson’s portion of the bond prior to the effective date of the change of tenancy when Mr Jackson replaced a departing tenant under the tenancy agreement. This is subject to the proviso that the amount received would not have the effect of topping up the bond held at the Bond Centre to an amount in excess of the maximum that can be demanded under s18(1) Residential Tenancies Act 1986 after the departing tenant’s share of the bond was refunded. b. That the landlord breached section 19(1) Residential Tenancies Act 1986 by failing to lodge Mr Jackson’s bond within 23 working days after payment was received.
The landlord must pay the tenant $27.00 immediately being the filing fee on the application.

Reasons

Both parties attended the hearing.
The tenant, Mr Jackson, claims the landlord, Mr Gu, did not lodge his bond with the Bond Centre within the required time and also effectively held two bonds at once pending a change of tenant and bond transfer. Mr Jackson brought this application to the Tribunal for clarification as to whether the landlord’s process for lodging the bond was correct. He does not seek compensation or exemplary damages for any breach. The purpose of the application is to clarify the process and ensure the landlord knows what is required in future.
The relevant sections of the Residential Tenancies Act 1986 (RTA) provide: a landlord shall not require payment by way of bond of an amount greater than 4 weeks’ rent lawfully payable under the tenancy agreement (see section 18(1) RTA); and a landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received (see section 19(1) RTA. Background facts
The tenancy for the premises was a fixed term commencing on 1 February 2024 and ending on 31 January 2025. The bond of $2,400, equivalent to four weeks’ rent, was lodged with the Bond Centre and there is no complaint about lodgement of that bond.
One of the original tenants decided to move overseas and found Mr Jackson to replace him as a tenant for the remainder of the term with effect from 17 th June 2024.
The landlord prepared two agreements to document the variation signed by the parties on 11 and 12 May 2024. A variation of tenancy agreement was signed by the landlord, the departing tenant, and the continuing tenants to record the departing tenant’s release from the tenancy on 17 June 2024. A second variation of tenancy agreement was signed contemporaneously by the landlord, Mr Jackson as the new tenant, and the continuing tenants to record that Mr Jackson would become a joint tenant responsible for the obligations of the tenants under the existing tenancy agreement from 17 June 2024.
After signing the variation, the landlord required Mr Jackson to pay $720 for his share of the bond. Mr Gu held this bond money and did not send it to the Bond Centre until 18 June 2024, the day after the change of tenancy came into effect. At the same time, he refunded the departing tenant’s bond on 19 June 2024.
As Mr Jackson’s bond was received by the landlord on 13 May 2024. He was obliged to lodge it with the Bond Centre by 13 June 2024. It was not submitted until 18 June 2024, which is 3 working days late.
There are two issues raised by Mr Jackson: a. Is the landlord entitled to demand and hold bond money for the same tenancy from an incoming tenant when the maximum bond required under the tenancy agreement is already held at the Bond Centre? b. Is the landlord permitted to hold onto the bond for more than 23 working days for a bond transfer process because it is not a new bond lodgement? Discussion
The landlord explained in written submissions that ideally, from Mr Jackson’s perspective, the bond transfer should occur directly between the departing and incoming tenants without landlord involvement. In that case, all parties sign the Tenancy Services standard form Change of Tenancy Agreement (the COT form) to document the change. This is then lodged with the Bond Centre and enables the name of the departing tenant to be removed from the bond, with the bond transferred into the incoming and continuing tenants’ names. The incoming tenant then pays the departing tenant their share of the bond directly.
Mr Gu explained that in his experience he has encountered difficulties with this process. For example, sometimes departing tenants have taken the bond payment from the incoming tenant but refused to sign the COT form. This means the new tenant has been unable to easily claim their rightful bond refund because it is still in the departing tenant’s name. Another problem is where the departing tenant receives the bond payment from the incoming tenant before a final inspection has been completed, it is difficult to recover compensation from the departing tenant because the bond is no longer under the landlord’s control.
Mr Gu says that he had an in-depth discussion with Tenancy Services (TS) as to how he could address the problem. He says that TS confirmed that to facilitate the bond transfer process he could collect the new tenant’s payment and refund the outgoing tenant directly. This ensures a smooth transition, prevents disputes, and allows for necessary negotiations if there are damages to the premises for which the incoming tenant should not be responsible.
Mr Gu says he explored other ways to handle bond transfers with TS. He asked if he could top up the existing bond with the payment collected from the incoming tenant and request the Bond Centre to refund the departing tenant’s portion. However he was informed that this was not possible, as it could breach the legal maximum bond that can be demanded under s18 RTA (4 weeks rent). He also asked if he could lodge a separate bond and later transfer it to the original bond after refunding the departing tenant. However, he was advised that bond transfers are only permitted between different landlords not within the same tenancy.
Mr Gu says that TS advised that his role in temporarily holding the new tenant’s payment was a practical approach to ensure a smooth bond transition. The law does not explicitly outline the process for handling bond transfers within the same tenancy, and he followed TS guidance to prevent disputes and ensure fairness for all parties concerned.
Mr Gu’s concerns are well-founded with this Tribunal frequently dealing with the types of difficulties he has highlighted. It is not uncommon for disputes to arise at the end of tenancy for rent arrears, cleaning and damages with the bond registered in the names of “long-lost” tenants who departed before the tenancy ended. This creates significant problems for landlords and tenants. Findings
Mr Gu is correct when he says that the RTA does not specifically address the process that should be followed for a bond transfer when there is a change of tenant. Technically, it might be argued that requesting an incoming tenant to pay a share of the bond to the landlord, when the maximum bond amount that can be demanded for the tenancy is still lodged at the Bond Centre, is a breach of section 18(1) RTA. However, I consider that there is no breach.
Section 18(1) specifically says a landlord shall not require payment by way of bond of an amount greater than 4 weeks’ rent lawfully payable under the tenancy agreement. In this case, I consider that the landlord is not requiring an overall bond payment of more than 4 weeks rent for the tenancy. The intention is that the incoming tenant’s share of the bond will top up the bond held for the tenancy to no more than the maximum amount that can be demanded under s18(1). In that regard, I accept that Mr Gu collecting a share of the bond money from the incoming tenant is a practical approach. Provided the sum received will not result in the maximum bond amount held at the Bond Centre being exceeded once the departing tenant’s bond is refunded, then I consider there is no breach of s18(1).
However, when a landlord collects bond money from an incoming tenant in the above circumstances, I consider that the landlord is obliged to ensure that it is lodged with the Bond Centre in accordance with s19(1) within 23 working days of receiving the funds. Section 19 explicitly provides that the time starts running from the date of the payment. Therefore, where a tenancy is not due to start for several weeks, the landlord needs to take care around the timing of the payment to ensure it can be lodged within the 23 working day period. For that reason, I find that the landlord breached his obligations under s19(1) RTA.
In summary, I am satisfied that Mr Gu was permitted to seek payment of Mr Jackson’s portion of the bond prior to the effective date of the change of tenancy. This is subject to the proviso that the amount received would not have the effect of topping up the bond held at the Bond Centre to an amount in excess of the maximum that can be demanded under s18(1) after the departing tenant’s share of the bond was refunded. However, any such payment must be lodged at the Bond Centre within 23 working days of the payment in accordance with s19(1). This of course means that any bond dispute with an outgoing tenant will need to be settled swiftly, but I can see no leeway provided by s19(1) in that situation.
Because Mr Jackson has substantially succeeded with the claim, I must reimburse the filing fee. Mr Gu indicated that he was happy to arrange payment of the filing fee straight away and indicated that he may voluntarily make an extra payment to Mr Jackson for the time and trouble of the application.

Claims and awards in Tenancy Tribunal application 5192454. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
Act 1986 by failing to lodge Mr Jackson’s bond within 23 working days after payment was received. 2. The landlord must p	$27.00		Act 1986 by failing to lodge Mr Jackson’s bond within 23 working days after payment was received. 2. The landlord must p

Order

The Tribunal makes the following declarations: a. That the landlord was permitted to seek payment of Mr Jackson’s portion of the bond prior to the effective date of the change of tenancy when Mr Jackson replaced a departing tenant under the tenancy agreement. This is subject to the proviso that the amount received would not have the effect of topping up the bond held at the Bond Centre to an amount in excess of the maximum that can be demanded under s18(1) Residential Tenancies Act 1986 after the departing tenant’s share of the bond was refunded. b. That the landlord breached section 19(1) Residential Tenancies Act 1986 by failing to lodge Mr Jackson’s bond within 23 working days after payment was received.
The landlord must pay the tenant $27.00 immediately being the filing fee on the application.

Reasons

Both parties attended the hearing.
The tenant, Mr Jackson, claims the landlord, Mr Gu, did not lodge his bond with the Bond Centre within the required time and also effectively held two bonds at once pending a change of tenant and bond transfer. Mr Jackson brought this application to the Tribunal for clarification as to whether the landlord’s process for lodging the bond was correct. He does not seek compensation or exemplary damages for any breach. The purpose of the application is to clarify the process and ensure the landlord knows what is required in future.
The relevant sections of the Residential Tenancies Act 1986 (RTA) provide: a landlord shall not require payment by way of bond of an amount greater than 4 weeks’ rent lawfully payable under the tenancy agreement (see section 18(1) RTA); and a landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received (see section 19(1) RTA. Background facts
The tenancy for the premises was a fixed term commencing on 1 February 2024 and ending on 31 January 2025. The bond of $2,400, equivalent to four weeks’ rent, was lodged with the Bond Centre and there is no complaint about lodgement of that bond.
One of the original tenants decided to move overseas and found Mr Jackson to replace him as a tenant for the remainder of the term with effect from 17 th June 2024.
The landlord prepared two agreements to document the variation signed by the parties on 11 and 12 May 2024. A variation of tenancy agreement was signed by the landlord, the departing tenant, and the continuing tenants to record the departing tenant’s release from the tenancy on 17 June 2024. A second variation of tenancy agreement was signed contemporaneously by the landlord, Mr Jackson as the new tenant, and the continuing tenants to record that Mr Jackson would become a joint tenant responsible for the obligations of the tenants under the existing tenancy agreement from 17 June 2024.
After signing the variation, the landlord required Mr Jackson to pay $720 for his share of the bond. Mr Gu held this bond money and did not send it to the Bond Centre until 18 June 2024, the day after the change of tenancy came into effect. At the same time, he refunded the departing tenant’s bond on 19 June 2024.
As Mr Jackson’s bond was received by the landlord on 13 May 2024. He was obliged to lodge it with the Bond Centre by 13 June 2024. It was not submitted until 18 June 2024, which is 3 working days late.
There are two issues raised by Mr Jackson: a. Is the landlord entitled to demand and hold bond money for the same tenancy from an incoming tenant when the maximum bond required under the tenancy agreement is already held at the Bond Centre? b. Is the landlord permitted to hold onto the bond for more than 23 working days for a bond transfer process because it is not a new bond lodgement? Discussion
The landlord explained in written submissions that ideally, from Mr Jackson’s perspective, the bond transfer should occur directly between the departing and incoming tenants without landlord involvement. In that case, all parties sign the Tenancy Services standard form Change of Tenancy Agreement (the COT form) to document the change. This is then lodged with the Bond Centre and enables the name of the departing tenant to be removed from the bond, with the bond transferred into the incoming and continuing tenants’ names. The incoming tenant then pays the departing tenant their share of the bond directly.
Mr Gu explained that in his experience he has encountered difficulties with this process. For example, sometimes departing tenants have taken the bond payment from the incoming tenant but refused to sign the COT form. This means the new tenant has been unable to easily claim their rightful bond refund because it is still in the departing tenant’s name. Another problem is where the departing tenant receives the bond payment from the incoming tenant before a final inspection has been completed, it is difficult to recover compensation from the departing tenant because the bond is no longer under the landlord’s control.
Mr Gu says that he had an in-depth discussion with Tenancy Services (TS) as to how he could address the problem. He says that TS confirmed that to facilitate the bond transfer process he could collect the new tenant’s payment and refund the outgoing tenant directly. This ensures a smooth transition, prevents disputes, and allows for necessary negotiations if there are damages to the premises for which the incoming tenant should not be responsible.
Mr Gu says he explored other ways to handle bond transfers with TS. He asked if he could top up the existing bond with the payment collected from the incoming tenant and request the Bond Centre to refund the departing tenant’s portion. However he was informed that this was not possible, as it could breach the legal maximum bond that can be demanded under s18 RTA (4 weeks rent). He also asked if he could lodge a separate bond and later transfer it to the original bond after refunding the departing tenant. However, he was advised that bond transfers are only permitted between different landlords not within the same tenancy.
Mr Gu says that TS advised that his role in temporarily holding the new tenant’s payment was a practical approach to ensure a smooth bond transition. The law does not explicitly outline the process for handling bond transfers within the same tenancy, and he followed TS guidance to prevent disputes and ensure fairness for all parties concerned.
Mr Gu’s concerns are well-founded with this Tribunal frequently dealing with the types of difficulties he has highlighted. It is not uncommon for disputes to arise at the end of tenancy for rent arrears, cleaning and damages with the bond registered in the names of “long-lost” tenants who departed before the tenancy ended. This creates significant problems for landlords and tenants. Findings
Mr Gu is correct when he says that the RTA does not specifically address the process that should be followed for a bond transfer when there is a change of tenant. Technically, it might be argued that requesting an incoming tenant to pay a share of the bond to the landlord, when the maximum bond amount that can be demanded for the tenancy is still lodged at the Bond Centre, is a breach of section 18(1) RTA. However, I consider that there is no breach.
Section 18(1) specifically says a landlord shall not require payment by way of bond of an amount greater than 4 weeks’ rent lawfully payable under the tenancy agreement. In this case, I consider that the landlord is not requiring an overall bond payment of more than 4 weeks rent for the tenancy. The intention is that the incoming tenant’s share of the bond will top up the bond held for the tenancy to no more than the maximum amount that can be demanded under s18(1). In that regard, I accept that Mr Gu collecting a share of the bond money from the incoming tenant is a practical approach. Provided the sum received will not result in the maximum bond amount held at the Bond Centre being exceeded once the departing tenant’s bond is refunded, then I consider there is no breach of s18(1).
However, when a landlord collects bond money from an incoming tenant in the above circumstances, I consider that the landlord is obliged to ensure that it is lodged with the Bond Centre in accordance with s19(1) within 23 working days of receiving the funds. Section 19 explicitly provides that the time starts running from the date of the payment. Therefore, where a tenancy is not due to start for several weeks, the landlord needs to take care around the timing of the payment to ensure it can be lodged within the 23 working day period. For that reason, I find that the landlord breached his obligations under s19(1) RTA.
In summary, I am satisfied that Mr Gu was permitted to seek payment of Mr Jackson’s portion of the bond prior to the effective date of the change of tenancy. This is subject to the proviso that the amount received would not have the effect of topping up the bond held at the Bond Centre to an amount in excess of the maximum that can be demanded under s18(1) after the departing tenant’s share of the bond was refunded. However, any such payment must be lodged at the Bond Centre within 23 working days of the payment in accordance with s19(1). This of course means that any bond dispute with an outgoing tenant will need to be settled swiftly, but I can see no leeway provided by s19(1) in that situation.
Because Mr Jackson has substantially succeeded with the claim, I must reimburse the filing fee. Mr Gu indicated that he was happy to arrange payment of the filing fee straight away and indicated that he may voluntarily make an extra payment to Mr Jackson for the time and trouble of the application.

Tenancy Tribunal case 5192454 — Rent arrears at Unit/Flat 3, 54 Kelburn Parade, Kelburn, Wellington 6012

At a glance

Tenancy Tribunal case 5192454 — Rent arrears at Unit/Flat 3, 54 Kelburn Parade, Kelburn, Wellington 6012

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions