Published tribunal order
Tenancy Tribunal case 5343684 — Rent arrears at 53B Tawhai Street, Stokes Valley, Lower Hutt 5019
Published 10 February 2026 · Application 5343684
Landlord favoured
- Rent arrears
Order
- Montana Shirley Asovale and Trace Wiremu-Hemi Hohipa must pay Stella Investments Limited $3,357.56 immediately, calculated as shown in table below:
- All other claims are dismissed.
Reasons
- Both parties attended the hearing with Ms Pham and Mr Lim appearing for the landlords and Ms Asovale appearing for both tenants.
- The landlord has applied for rent arrears, loss of rent, other compensation and the filing fee on the application following the end of the tenancy. Background
- This was a fixed term tenancy that commenced on 16 April 2025 and was due to expire on 15 April 2026. Weekly rent was $620.
- By previous Tribunal orders dated 7 August 2025 under applications 5300259 and 5302984, the Tribunal found that the tenants abandoned the premises on 19 July 2025 and at that time rent was in arrears. In the same proceedings, the Tribunal dismissed the tenants’ application for a reduction of the fixed term tenancy and declared that the tenancy remain in place until the landlord consented to a reduction of the fixed term, or a new tenancy starts before the end of the fixed term. Orders were also made for refund of the bond to the landlord to cover rent arrears and exemplary damages were awarded to the landlord for the abandonment.
- The landlord took steps to find a new tenant to let the premises and a new tenancy started on 29 August 2025. Rent arrears
- The landlord seeks rent arrears owed until the new tenancy commenced.
- The landlord has provided rent records which prove the amount owing as at 28 August 2025, which is accepted by the tenants. The amount ordered is proved. Loss of rent
- The landlord seeks to recover loss of rent due to re-letting the premises at a lower weekly rent to attract a tenant and mitigate further potential loss. Law
- Section 49 RTA provides that where any party to a tenancy agreement breaches any of the provisions of the agreement or the RTA, the other party shall take all reasonable steps to limit the damage or loss arising from that breach, in accordance with the rules of law relating to mitigation of loss or damage upon breach of contract.
- In relation to situations where a tenant abandons a fixed term tenancy (as was ruled in this case) Section 61 (4) RTA provides that nothing in section 49 shall impose upon the landlord any obligation, on finding that the tenant has abandoned the premises, to make an application to terminate the tenancy for abandonment or to grant a new tenancy of the premises.
- However, where a landlord decides to relet the premises that have been abandoned (even though there is no obligation to do so under s61(4)), the effect of s49 is that any ongoing loss suffered is subject to the mitigation principles under s49.
- The generally accepted principles are: a. the steps taken to mitigate loss must be reasonable in the circumstances. The party is not required to take extraordinary or costly steps, just what a reasonable person would do in the same situation; b. the party alleging a failure to mitigate must prove that the other party failed to take reasonable steps to mitigate their loss; c. failure to mitigate can reduce the amount of compensation or damages that may be awarded. Facts
- The weekly rent charged for this tenancy was $620. Following the tenants’ decision to abandon and vacate the premises prior to the end of the fixed term, the landlord engaged a professional property management company (Mark Real Estate Limited trading as Professionals) to re-let the premises. The property manager advised, based on their market expertise, that achieving market rent of $620 in the current market would be unlikely. They advised that re-letting the premises at $620 in mid-winter and at a time when the market had declined would be difficult. They suggested that a more realistic and achievable weekly rent would be $580. The property manager also advised that holding out for the higher rent of $620 could significantly delay re-letting and result in additional loss.
- During the hearing, the Tribunal reviewed the market rent data available on the Tenancy Services website for 2-bedroom homes rented in Stokes Valley. The rent paid for those properties as shown on the bond information lodged in the six months from 1 July to 31 December 2025 is analysed to provide a market rent guideline. There were 150 active bonds lodged for 2-bedroom houses in Stokes Valley and the data shows: Lower quartile rent is $550—this is the weekly rent at 25% of all market rents when all are placed in order of value; Median rent is $570—this is the middle value of all the weekly rents when placed in order of value; Upper quartile rent is $585—this is the weekly rent at 75% of all market rents when all are placed in order of value.
- The market rent data is consistent with the advice provided by the landlord’s property manager that the landlord would be unlikely to find a tenant for the premises willing to pay weekly rent of $620, as it exceeds the upper quartile figure.
- The landlord followed the property manager’s advice and the premises were advertised at weekly rent of $580. The premises were first listed on Trade Me on 23 July 2025 only a few days after the tenant vacated. The property manager found a tenant renting another property they managed who agreed on 5 August 2025 to let this property for a one year fixed term starting on 29 August 2025. The effect of the new tenancy is the landlord is earning $40 less rent each week than they would have earned had the tenants not breached the tenancy agreement and remained there until the fixed term ended on 15 April 2026. They seek $1320, being the loss of rent from 29 August 2025 to 15 April 2026.
- The tenant accepts that the landlord advertised the property for let and found a new tenant reasonably quickly. However, she considers that the tenants should not be required to pay the rent shortfall because it is simply market rent, which is all the landlord is entitled to recover. She says that the property manager’s assessment and the market rent data on the Tenancy Services website is evidence that the tenants were overcharged for rent in the first place. Discussion and findings
- As I explained at the hearing, the tenant cannot question the rent they agreed to pay when the tenancy started in April 2025. Section 25 RTA provides that on an application made by the tenant, the Tribunal may, on being satisfied that the rent 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. However, no such application may be made in respect of the rent payable under a fixed-term tenancy later than 3 months after the date of the commencement of the tenancy. So, the tenant cannot raise an issue now that the rent they were charged in April 2025 substantially exceeded market rent.
- The whole purpose of a fixed term tenancy is to provide certainty for both tenants and landlords in terms of the length of the tenancy and the rent payable. Where the tenancy term is broken, and the market rent obtainable has dropped, the landlord will be entitled to recover the shortfall in rent where they can show that they have acted reasonably in reducing the rent to mitigate loss.
- After carefully considering all the available evidence, I find that the landlord has taken reasonable steps in lowering the rent for the premises on the professional advice of their property manager. The advice is also consistent with the market rent data on the Tenancy Services website. I also accept, and the tenant has not proved otherwise, that by lowering the rent they found a tenant reasonably quickly. Had the landlord not lowered the rent, it may have taken longer to find a replacement tenant, in which case rent at $620/week would have continued to accrue and been payable by the tenants.
- The previous Tribunal decision found that the tenants had abandoned the premises under s61 RTA. Had the landlords exercised their right under s61(4) not to find a replacement tenant for the premises, the tenants would have continued to be liable for the rent at $620/week and would have been forced to try and find replacement tenants themselves.
- Overall, I find that the steps taken by the landlord to relet the premises at lower rent were reasonable and they have mitigated their loss to a reasonable extent. Therefore, they are entitled to recover the loss of rent accruing at $40 per week. I award that sum to the date of today’s hearing only. As discussed, I cannot award loss of rent up to 15 April 2026, because the loss has not yet been incurred. Property management fee
- The landlord seeks reimbursement of the property manager’s costs for finding a replacement tenant of $343.85. I accept that the costs are reasonable and are a loss suffered by the landlord as a direct result of the tenants abandoning the tenancy. The amount ordered is proved. Electricity charges
- Section 39(3) RTA provides that the tenant is responsible for all outgoings in respect of the premises that are exclusively attributable to the tenant’s occupation of the premises or to the tenant’s use of the facilities.
- On vacating the premises, the tenants obtained a final electricity reading and had their supplier transfer the line to their new property.
- The landlords subsequently received a notice addressed to “the New Occupier” from the supplier warning that the line would be disconnected by 18 August 2025 unless the new occupier contacted them. The landlord contacted the supplier (Mercury) and asked that the electricity remain connected. They argue that was essential to prevent disruption of supply, and avoid higher costs and inconvenience if the power had to be reconnected. They also say that electricity was required for essential activities, including potential tenant viewings, ongoing maintenance and cleaning, and to ensure the new tenant could move in as scheduled. They claim that without power, these activities would have been disrupted, delaying the re-letting process, the new tenant’s move-in and directly increasing the landlord’s losses.
- The landlord received electricity bills for the period from 20 July to 29 August 2025 which mostly comprise the fixed daily charge and a small amount of power usage in August 2025. The total of the bills is $100.99.
- The landlords argue that these costs were unavoidable and were a direct result of the tenants breaching their tenancy agreement and abandoning the premises. They seek recovery of the amount from the tenants.
- The tenants say they did not ask for the power to be disconnected, only that their account be transferred to their new property after the final reading was done. Mercury closed the account at the premises which ensures that the tenants were not charged for any usage after they vacated. However, a disconnection notice is standard procedure and means that the energy supply will be cut off if there is no active account holder. The bills supplied by the landlord show no power was used by the tenants from 20-31 July. There is a small amount of power used in August, well after they vacated.
- The tenants say that the new tenants had already signed a tenancy agreement on 5 August 2025, and the landlords could have easily advised them to arrange for power connection by 18 August 2025 (the date specified in the notice from Mercury) to ensure it did not disconnect. There was no need for the landlords to connect the power and incur daily charges which they are now trying to pass on to the tenants. Had the power disconnected, it is also standard practice that new tenants are responsible for having the power connected.
- The tenants also do not accept that it was necessary to have the power connected for viewings. Furthermore, there was no claim against the tenants for cleaning or maintenance work. Therefore, there is no basis for charging the electricity costs associated with that work.
- After considering s39 and all the circumstances, I consider the tenants are not liable to compensate the landlords for electricity charges after they arranged a final reading and transfer of the account to their new property. I accept that the landlord could have advised the new tenants on 5 August to arrange a power connection from the tenancy commencement date so that the daily fixed charge would not accrue and the power would not be disconnected, in the meantime. The landlord has also not established that power was necessary for cleaning, maintenance or viewings between 20 July and 5 August 2025. The claim for the electricity costs is dismissed.
- Because Stella Investments Limited has substantially succeeded with the claim I have reimbursed the filing fee. K Stirling, 10 February 2026