A Tauranga property management business has been fined for withholding $136,000 of tenants' money from Tenancy Services' bond centre.

Bay City Rentals Tga was fined more than $16,000 after it failed to lodge bonds paid by tenants and also neglected to provide statements about insulation in properties it was managing.

The chief executive of the Ministry of Business, Innovation and Employment took the case against the company and shareholder and director Nigel David Walker, although his name was subsequently removed as a part of the claim.

The Tenancy Tribunal said: "There is a strong public interest in maintaining the integrity of the bond system. Therefore, deterring other landlords from bypassing the system is a legitimate consideration in calculating exemplary damages. Here the bond money totalled $136,328. That is a substantial amount of money withheld from the bond centre for a substantial period of time."

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Under the Residential Tenancies Act, landlords must lodge bonds within 23 working days of receiving them from tenants.

The business was fined $10,950 for not lodging the bonds, $3975 over insulation issues and costs of $1492, bringing the total to $16,417.

A hearing was held in January, where Bay City was represented by Walker.

The ministry withdrew all the claims against him but pursued claims against the business he owns, filing 73 claims for bond breaches and 53 claims for insulation breaches.

Walker had been an employee of the company until last year, when he became the director and shareholder, the decision noted. Last January, the ministry became aware of allegations that Bay City was not lodging tenants' bonds, so, in February, it asked for all documents. Last June, it interviewed Walker.

He accepted the management business failed to lodge the 73 bonds within the statutory 23 working days but said 68 bonds were lodged after that timeframe.

"Bay City was fully aware bonds were continually not being lodged. Walker says there was an issue with money being transferred between accounts and an incident where a cheque was dishonoured because of a delay in transferring the money. He also referred to an incident where a bond had to be paid out where it was lodged to the wrong name. However, this provides neither an excuse nor a reasonable explanation for the administrative processes not being corrected," the tribunal said.

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Walker said the process for handling bonds had now been corrected so they were lodged immediately. The tribunal accepted that.

Bay City also provided numerous other references from past and present tenants about Walker's honesty and integrity and his commendable qualities as a landlord.