Landlords are businesspeople: they understand that times can get tough. Photo / 123rf
By Susan Edmunds of RNZ
Thousands of people apply to the Tenancy Tribunal every year to have it sort disputes between landlords and tenants.
Nationwide, several key themes surfaced in the 7000 applications in the September quarter. An application can be about several types of disputes.
Some of the applications may have been resolved between the parties or via mediation without resulting in a tribunal hearing.
Rent arrears was the clear leader in terms of generating applications to the tribunal. There were 4484 applications including this reason in the most recent quarter. That was 61.46% of all applications.
In a recent case, one tenant with her address suppressed was told she needed to pay $10,790 in rent arrears by the middle of October, otherwise she would have her tenancy terminated. In another, a tenant was told to pay $4100 in rent arrears for a tenancy that had already finished. Another was told to pay the landlord $3095.05 immediately, and the remaining balance of rent arrears owing would be covered by the bond of $2800.
Auckland Property Investors Association general manager Sarina Gibbon said it could be difficult to collect large sums of money when the tribunal ordered it – for both landlords and tenants.
“It is as much a reflection of the general state of cashflow across the sector as well as the ineffectiveness of civil enforcement in this country. If the disputed sum is moderate, many of our members would simply forgo enforcing their rights through the tribunal because the potential payoff pales in comparison with the cost and time involved with participating in the tribunal process.
“My tips for landlords are to keep a sharp eye on arrears and work with the tenant on an agreeable payment plan that would support their tenure and your cashflow.
“For tenants, I recommend that they front-foot their cashflow challenges with their landlords as soon as possible.
“Landlords are businesspeople: they understand that times can get tough and sometimes it is literally a choice between paying rent and putting food on the table. If tenants act with transparency, good faith and personal accountability, they may very well find their landlords would come to the party and help work something out without involving the tribunal.”
Almost 3000 applications were made for a bond refund in the quarter. It was the most common reason tenants applied to the tribunal and the third most common reason landlords applied.
When a tenancy ends, the tenant and landlord are meant to inspect the property together. If everything is in order, they complete a bond refund form and have Tenancy Services refund the bond. If there are problems, they can agree to have part or all of the bond refunded to the landlord.
But if the parties cannot agree, the tribunal can be called upon to decide.
In one case this year, the landlord had refused a refund because of unpaid rent on another property the tenant had signed an agreement for but not moved into.
The tribunal adjudicator said the claims for that new tenancy would be dealt with under another application and the bond should be refunded on the initial tenancy.
More than 2500 applications were made for termination of a tenancy and/or possession of a rental property in the September quarter.
In a recent case, a landlord of a five-bedroom Kohimarama property sought possession after the end of a fixed-term tenancy.
The tenant had given notice that she would move out at the end of the fixed term, but then changed her mind and sought to withdraw the notice. The landlord refused to accept this and applied to the tribunal for a possession order.
The adjudicator said the tenant’s notice was valid and binding and had been accepted by the landlord. “I appreciate that the tenant’s personal circumstances are such that moving out will be difficult. While I empathise with the tenant’s situation, these personal factors cannot be considered by the tribunal.”
In that case, the fixed term was due to end on May 10 and the tribunal hearing was held on August 20, which is longer than the 90 days normally allowed after the termination of a tenancy for a possession order to be issued.
More than 2000 applications sought compensation or damages.
In one case heard in September, a tenant had a dispute with his landlord over access to his room to inspect it for ventilation. He was not given sufficient notice of the inspection and was asleep because of working nights. He had changed the pin number for the lock on his door; the landlord said that could only be done with the master code, which tenants should not have for safety reasons.
The tenant told the landlord he would take him to court because it was not the first time he had not been given notice.
The landlord gave a 28-day notice to terminate the tenancy; the tenant said this was retaliatory.
The adjudicator said where there was a short time between a tenant raising an issue about the tenancy and the landlord serving notice, it might lead to a “strong inference” that the landlord was “at least partly motivated” by the tenant exercising their rights.
The tenant had to find somewhere new to live after nine years. He was awarded $2000 in exemplary damages.
More than 1160 applications sought outgoings.
Under the Residential Tenancies Act, tenants are generally responsible for all outgoings that are exclusively attributable to them.
In one case, a tenant was paying $110 a week. His landlord went to the Tenancy Tribunal over outgoings including a Watercare invoice, a Spark invoice and a Mercury power invoice.
All were in the landlord’s name. The tenant said the agreement was that all would be covered by the rent. The adjudicator said it was not clear on the balance of probabilities that the tenant had agreed to pay outgoings in addition to rent payments.
Landlords are responsible for outgoings that are incurred whether or not the premises are occupied, or for common facilities.
Renters United president Zac Thomas said it could be tough for tenants to go to the tribunal when it was something they might do once or twice in a lifetime, but they were usually up against property managers experienced in the process and paid to be there.
It could take a lot of time and resources for tenants to prepare their cases and then take leave from work to turn up for the hearing, he said.
“There’s a lot to be desired on the accessibility side.”
Decisions were not consistent either, because it was not a court situation where a decision would set a precedent, he said.
“We have seen decisions that could be a totally different decision elsewhere, which can frustrate both sides.”
Sometimes landlords would simply ignore a ruling, he said.
Property investor representatives said the biggest problem for them was the length of time it was taking to have a dispute heard.
“The tribunal isn’t working for anyone,” said Matt Ball, advocacy manager at the NZ Property Investors Federation.
“Neither landlords nor tenants, neither side has access to a quick resolution of their problems.”
One investor had contacted him about a property a tenant left in March. The property was “trashed”, he said. A tribunal date had still not been set after five months.
“It’s the single biggest frustration for our members. It takes too long to get a hearing, there are too many delays and the outcomes don’t reflect the financial losses incurred.”
The system was “underfunded and riddled with inefficiency”, Gibbon said.
“As a result, applicants and respondents are experiencing significant delays in getting their disputes resolved, which is ironic really, considering the whole idea of a tribunal is to expedite and increase access to justice.
“The more complex tenancy laws are, the more disputes we can expect and the continued resourcing of the tribunal’s capacity and processes should be in lockstep with this trend.
“What worries me more is that some of our members are simply walking away from legitimate claims because they’ve done the maths on the opportunity cost. When you factor in the time investment, the uncertainty and the lengthy delays, many landlords tell us they’d rather absorb the loss and move on with their business than pursue what they’re legally entitled to through the tribunal.
“This is a clear signal that the system isn’t working as intended – when people start forfeiting their legal rights because the process of enforcing them is too burdensome, we have a serious access-to-justice problem.
“The tribunal needs resources that match both its mandate and the modern reality of rental disputes. Without proper investment in technology, staff and processes, we risk having a system that exists in name only – technically available, but practically inaccessible to many who need it.”
Other jurisdictions had opted for online options to make the process more accessible and clear backlogs, Thomas said.
If 90-day, no-cause evictions returned, it would make tenants more reluctant to go to the tribunal, he said. “They will be worried about being kicked out as a result.”
– RNZ
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