What was the outcome of Tenancy Tribunal case 9044324?

The tribunal order states: The application is dismissed.

How much money was awarded in case 9044324?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9044324?

The primary dispute was Leaks. Related themes: Unit Titles.

Where can I read the official tribunal order for case 9044324?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9754277-UTA_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9044324?

The tribunal order states: The application is dismissed.

How much money was awarded in case 9044324?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9044324?

The primary dispute was Leaks. Related themes: Unit Titles.

Where can I read the official tribunal order for case 9044324?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9754277-UTA_Tribunal_Order.pdf.

auckland, Auckland Tenancy Tribunal Case 9044324 — Leaks

Order

The application is dismissed.

Reasons

Both parties attended the hearing. Mr Zhu is the sole director of the applicant company, which is the registered owner of Unit 1B, 74 Wyndham Street Auckland. Ms Sinnecker from Boutique Body Corporates Limited appeared for the body corporate as its authorised agent.
I will refer to the applicant as Mr Zhu rather than the company.
Mr Zhu seeks relief from penalties and costs including legal costs charged to him due to the late payment of his body corporate levies.
After numerous letters of demand and the threat of liquidation proceedings following the issuing of a statutory demand, Mr Zhu paid his outstanding levies on 19 July 2023. The applicant’s submissions
Mr Zhu spoke to a written submission. In summary he submitted: • Due to the Covid lockdowns and other restrictions his business suffered a dramatic loss of income between 2020 and 2022. As a result, 60% of his reduced earnings went to body corporate fees. • Of the 11 units in the body corporate development his unit was the second largest. The largest unit owner has a sub-lease which he did not. Therefore, he paid the highest amount of levies. • The levies charged by the body corporate were too high and it failed to undertake work repairing a leaking canopy. • Unlike other bodies corporate he had heard of, this body corporate provided no relief in the form of delayed payments or a payment plan. • Even when the levy debt was less than $50,000.00 the body corporate started liquidation proceedings rather than make an application to the Tenancy Tribunal. That meant that every unit owner faced liquidation proceedings. • It was unfair that he was charged legal costs for that action. He did his best in difficult times. He was unable to draw any salary from his business. The body corporate’s submissions
Ms Sinnecker made the following submissions: • The levies for all unit owners based on their utility interests were raised and approved at each Annual General Meeting (AGM). • The body corporate approved a debt collection procedure at its AGM held on 14 May 2014. • The body corporate acknowledged the difficulties businesses faced due to Covid restrictions. However, it still had to collect levies to maintain the common property. Every other unit owner paid their levies. • Mr Zhu had a history of late levy payments since 2014. • No owners were offered any payment plans or delayed payment terms. • The costs and legal fees were only incurred because the levies were not paid. The body corporate clearly communicated with Mr Zhu. He was informed of the payments required and the consequences of non-payment. • The body corporate elected to issue a statutory demand because the levies were not contested and that was the most effective way to collect them. • The body corporate had had contractors assess and repair the canopy. There was a plan to replace the canopy membrane since the repairs had not solved the leak. Legal considerations
A unit owner must pay all body corporate levies and outgoings payable for the unit - see sections 80(1)(f) and 121(1) Unit Titles Act 2010 (UTA).
The body corporate determined the levies payable at each AGM and each unit owner's share was calculated according to their utility interest.
The body corporate fixed the due dates for the levies to be paid - see section 124(1) UTA.
If a unit owner fails to pay levies by the due date, interest accrues on the unpaid balance. A body corporate may charge interest up to 10% per annum - see section 128 UTA.
Pursuant to section 124 UTA, and as resolved at meetings of the body corporate, the body corporate is entitled to recover any reasonable costs incurred by it in collecting unpaid levies as a debt due by the owner to the body corporate.

Has Mr Zhu proved a case for levy relief?

Ms Sinnecker provided a timeline of communications with Mr Zhu concerning his unpaid levies and the consequences of non-payment or late payment.
The body corporate was required to take legal action to order to collect the outstanding levies.
The levies were properly set by the body corporate at each of its AGMs.
Mr Zhu’s case is based on what he perceives as unfairness. Due to the Covid lockdowns and restrictions, his business income fell dramatically, and he faced financial pressure.
The Tribunal has no power to set levies; that is solely for the body corporate. Nor does the Tribunal have a discretion to lower the levies once set or to impose a time-framed payment plan.
The Tribunal acknowledges the difficulties Mr Zhu faced (as did many business owners, especially in Auckland) due to the Covid restrictions.
That penalties and costs, including legal costs, accrued to him was solely because of his failure to pay his levies when due.
And, as Ms Sinnecker noted, Mr Zhu’s failure to pay his levies on time dates to 2014; it was not solely confined to the period of Covid restrictions.
That the body corporate chose to initiate liquidation proceedings is possibly questionable. The Tribunal has sole originating jurisdiction for body corporate disputes up to $50,000.00. Possibly the District Court might have declined jurisdiction on that basis. But the point is moot because Mr Zhu eventually paid his levies without the need for the liquidation proceedings to progress.
He is, however, liable for the costs of collection and for interest. The Tribunal would have awarded those costs on an application for unpaid levies. The interest costs were set by body corporate resolution. The legal costs have been detailed and are not of an amount the Tribunal would consider unreasonable given Mr Zhu’s on-going failure to pay his levies.
The body corporate’s agent acted reasonably and kept Mr Zhu well informed of the consequences of his failure to pay the outstanding levies. His actions resulted in the interest and costs being charged to him. He eventually paid the levies to stop the legal action the body corporate had initiated. Had he acted sooner the costs would have been less. Had he paid when he was required to there would have been no costs (nor interest) at all.
Mr Zhu appears not to have considered that the body corporate is simply the sum of all the owners in a unit title development. In this development there are 11 unit owners. All but Mr Zhu paid their levies when due. It matters not that his levies were the highest, or second highest.
If he were granted the relief he seeks, the other 10 unit owners would bear the additional cost of the that relief; it would have to be levied pro-rata among them.

How could that be fair?

The Covid pandemic disrupted life for many people, not just business owners. Yes, it was hard for Mr Zhu, but his hardship cannot justify an order relieving him of levies, interest, and costs where the levies were lawfully set, and the interest and costs accrued because of his decision not to pay the levies when due.
The Tribunal does not have the statutory authority to make the orders Mr Zhu seeks. Nor does it have a general discretion to waive levies, interest and costs based on a perception of unfairness.
Finally, the Tribunal notes Mr Zhu’s concern about the repair of the canopy. Ms Sinnecker said that repairs had been done and a plan was in place to replace the canopy membrane. That issue does not justify levy relief. If it remains an issue, Mr Zhu can apply for a work order. Result
The application is dismissed.

Order

The application is dismissed.

Reasons

Both parties attended the hearing. Mr Zhu is the sole director of the applicant company, which is the registered owner of Unit 1B, 74 Wyndham Street Auckland. Ms Sinnecker from Boutique Body Corporates Limited appeared for the body corporate as its authorised agent.
I will refer to the applicant as Mr Zhu rather than the company.
Mr Zhu seeks relief from penalties and costs including legal costs charged to him due to the late payment of his body corporate levies.
After numerous letters of demand and the threat of liquidation proceedings following the issuing of a statutory demand, Mr Zhu paid his outstanding levies on 19 July 2023. The applicant’s submissions
Mr Zhu spoke to a written submission. In summary he submitted: • Due to the Covid lockdowns and other restrictions his business suffered a dramatic loss of income between 2020 and 2022. As a result, 60% of his reduced earnings went to body corporate fees. • Of the 11 units in the body corporate development his unit was the second largest. The largest unit owner has a sub-lease which he did not. Therefore, he paid the highest amount of levies. • The levies charged by the body corporate were too high and it failed to undertake work repairing a leaking canopy. • Unlike other bodies corporate he had heard of, this body corporate provided no relief in the form of delayed payments or a payment plan. • Even when the levy debt was less than $50,000.00 the body corporate started liquidation proceedings rather than make an application to the Tenancy Tribunal. That meant that every unit owner faced liquidation proceedings. • It was unfair that he was charged legal costs for that action. He did his best in difficult times. He was unable to draw any salary from his business. The body corporate’s submissions
Ms Sinnecker made the following submissions: • The levies for all unit owners based on their utility interests were raised and approved at each Annual General Meeting (AGM). • The body corporate approved a debt collection procedure at its AGM held on 14 May 2014. • The body corporate acknowledged the difficulties businesses faced due to Covid restrictions. However, it still had to collect levies to maintain the common property. Every other unit owner paid their levies. • Mr Zhu had a history of late levy payments since 2014. • No owners were offered any payment plans or delayed payment terms. • The costs and legal fees were only incurred because the levies were not paid. The body corporate clearly communicated with Mr Zhu. He was informed of the payments required and the consequences of non-payment. • The body corporate elected to issue a statutory demand because the levies were not contested and that was the most effective way to collect them. • The body corporate had had contractors assess and repair the canopy. There was a plan to replace the canopy membrane since the repairs had not solved the leak. Legal considerations
A unit owner must pay all body corporate levies and outgoings payable for the unit - see sections 80(1)(f) and 121(1) Unit Titles Act 2010 (UTA).
The body corporate determined the levies payable at each AGM and each unit owner's share was calculated according to their utility interest.
The body corporate fixed the due dates for the levies to be paid - see section 124(1) UTA.
If a unit owner fails to pay levies by the due date, interest accrues on the unpaid balance. A body corporate may charge interest up to 10% per annum - see section 128 UTA.
Pursuant to section 124 UTA, and as resolved at meetings of the body corporate, the body corporate is entitled to recover any reasonable costs incurred by it in collecting unpaid levies as a debt due by the owner to the body corporate.

Has Mr Zhu proved a case for levy relief?

Ms Sinnecker provided a timeline of communications with Mr Zhu concerning his unpaid levies and the consequences of non-payment or late payment.
The body corporate was required to take legal action to order to collect the outstanding levies.
The levies were properly set by the body corporate at each of its AGMs.
Mr Zhu’s case is based on what he perceives as unfairness. Due to the Covid lockdowns and restrictions, his business income fell dramatically, and he faced financial pressure.
The Tribunal has no power to set levies; that is solely for the body corporate. Nor does the Tribunal have a discretion to lower the levies once set or to impose a time-framed payment plan.
The Tribunal acknowledges the difficulties Mr Zhu faced (as did many business owners, especially in Auckland) due to the Covid restrictions.
That penalties and costs, including legal costs, accrued to him was solely because of his failure to pay his levies when due.
And, as Ms Sinnecker noted, Mr Zhu’s failure to pay his levies on time dates to 2014; it was not solely confined to the period of Covid restrictions.
That the body corporate chose to initiate liquidation proceedings is possibly questionable. The Tribunal has sole originating jurisdiction for body corporate disputes up to $50,000.00. Possibly the District Court might have declined jurisdiction on that basis. But the point is moot because Mr Zhu eventually paid his levies without the need for the liquidation proceedings to progress.
He is, however, liable for the costs of collection and for interest. The Tribunal would have awarded those costs on an application for unpaid levies. The interest costs were set by body corporate resolution. The legal costs have been detailed and are not of an amount the Tribunal would consider unreasonable given Mr Zhu’s on-going failure to pay his levies.
The body corporate’s agent acted reasonably and kept Mr Zhu well informed of the consequences of his failure to pay the outstanding levies. His actions resulted in the interest and costs being charged to him. He eventually paid the levies to stop the legal action the body corporate had initiated. Had he acted sooner the costs would have been less. Had he paid when he was required to there would have been no costs (nor interest) at all.
Mr Zhu appears not to have considered that the body corporate is simply the sum of all the owners in a unit title development. In this development there are 11 unit owners. All but Mr Zhu paid their levies when due. It matters not that his levies were the highest, or second highest.
If he were granted the relief he seeks, the other 10 unit owners would bear the additional cost of the that relief; it would have to be levied pro-rata among them.

How could that be fair?

The Covid pandemic disrupted life for many people, not just business owners. Yes, it was hard for Mr Zhu, but his hardship cannot justify an order relieving him of levies, interest, and costs where the levies were lawfully set, and the interest and costs accrued because of his decision not to pay the levies when due.
The Tribunal does not have the statutory authority to make the orders Mr Zhu seeks. Nor does it have a general discretion to waive levies, interest and costs based on a perception of unfairness.
Finally, the Tribunal notes Mr Zhu’s concern about the repair of the canopy. Ms Sinnecker said that repairs had been done and a plan was in place to replace the canopy membrane. That issue does not justify levy relief. If it remains an issue, Mr Zhu can apply for a work order. Result
The application is dismissed.

Tenancy Tribunal case 9044324 — Leaks in auckland, Auckland

At a glance

Tenancy Tribunal case 9044324 — Leaks in auckland, Auckland

At a glance

Claims & awards

Order

Reasons

Has Mr Zhu proved a case for levy relief?

How could that be fair?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Claims & awards

Order

Reasons

Has Mr Zhu proved a case for levy relief?

How could that be fair?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions