Rotorua landlords have lost their bid to have a rehearing with the Tenancy Tribunal that ruled they had to pay a tenant more than $3500.

Stephen Chiman Bhana, Ashok Dennis Bhana and Jasu Bhana applied to the Tenancy Tribunal for a rehearing arguing the tribunal's original finding they had to pay the tenant.

The tribunal has again ruled in favour of the tenant but now the matter is heading to an appeal in the Rotorua District Court.

The dispute relating to the flat at 90d Ranolf St was heard in July and the tribunal's order has recently been made public online.

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In June, Mr Bhana, as agent of the property, and Ashok Dennis Bhana and Jasu Bhana as trustees of Ranolf Trust, which is the landlord, were ordered by adjudicator Dafydd Malcolm to pay the tenant, Mohan Kaki, $2700 for unlodged bond and refunded rent in advance and letting fee.

The trio were also ordered to pay $450 for exemplary damages for breach of duties on receipt of bond, $400 exemplary damages for failing to provide and maintain the flat in a reasonable state of repair and cleanliness, and a $20.44 filing fee.

Mr Kaki signed a tenancy agreement with Stephen Bhana for the flat but when he went to move in, he found deficiencies in cleaning and repairs. He immediately raised them with Mr Bhana and didn't move in.

He tried to contact Mr Bhana to ask they be dealt with. When the tenant went to the flat, he found a "Dangerous and Insanitary Building Notice" on it from the Rotorua Lakes Council saying it was "insanitary" under the Building Act 2004.

Mr Malcolm said in his order that despite signing the tenancy agreement, the parties had agreed the tenancy would not start until the repair work at the premises had been finished.

The tenant sought exemplary damages for the landlords' failure to lodge or return the bond.

A few weeks later, the landlord has retaken possession of the flat and re-let it.

Mr Malcolm noted in his order his concern that the landlord did not appear to have complied with the council's notice and could therefore be committing an offence under the Building Act 2004.

On June 16, Stephen Bhana applied for a rehearing. Adjudicator Ruth Lee said Mr Bhana was "essentially saying the adjudicator got it wrong and he wants another go at it".

She ruled there was no procedural irregularity to justify a rehearing.

"Mr Bhana may not like the finding made to dismiss his application but it was considered and determined."

The Bhanas have appealed the order, which will be heard in the Rotorua District Court on October 11.