A ruling that left a Dunedin landlord $10,000 out of pocket over a legal technicality has been overturned.

Vic Inglis and his wife appealed a Tenancy Tribunal decision that found Natalie Parry's tenancy of their Luke St property was unlawful - and therefore she was entitled to a refund of all rent paid - because unpermitted alterations had been made to the two-storey home's downstairs area.

Unbeknown to the couple when they bought the property, alterations had been made to the house thst deviated from the plans submitted to the Dunedin City Council during its build.

Their appeal to the Dunedin District Court has now been successful.

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Dunedin District Court Judge Kevin Phillips ruled the Tenancy Tribunal was wrong to say the tenancy was "unlawful".

The lack of consent was instead "no more than a technical breach" and Parry "could not argue she had suffered detriment" as a result.

"There is no evidence that the tenant made complaints concerning the health of the tenants, dampness, mould or any issues relating to the sanitary operation of the area in question.

"There was no ingress of dampness or mould.

"The overall situation therefore, is that the premises were deficient only in regard to a formal certification."

There was photographic evidence the work in question had been done to a "high standard" and it was certified only days after Inglis became aware of the issue and applied.

This certification rectified the "technical breach".

Parry was ordered to repay Inglis $10,960.44.