Property management: Landlord's dilemma - who pays the rent when the tenant is in prison?

What happens when a tenant is remanded in custody? Photo / 123RF

What happens when a tenant is arrested? Who pays the rent? Can a landlord keep the tenant's possessions until matters are resolved?

Those were some of the issues the Tenancy Tribunal heard in a dispute between a landlord and tenant over renting in an upmarket Auckland area.

In the case subject to no suppression orders, tenant Peter Trevor Wilson Malloch disputed landlord Simon Muirhead's right to keep his possessions after Malloch was arrested and held on remand for two-and-a-half months.

There were no issues with the tenancy which started in 2020, the tribunal said. No formal tenancy agreement was put in writing when Malloch rented the Elizabeth St home in Freemans Bay for $600/week.

Police arrested Malloch in August last year, searched his apartment but found nothing, he said.

"He was in remand for two and a half months. He claims Muirhead unlawfully terminated his tenancy before speaking with his family and had disposed of some of his belongings while putting some in storage. He wanted to collect his belongings but says this has been refused by Muirhead who indicated he will only allow collection once outstanding rent arrears, compensation and other associated costs are paid in full," the decision said.

So Malloch filed an application with the tribunal for compensation for the landlord's action over his possessions.

But Muirhead said Malloch had abandoned the tenancy, leaving all his belongings in the unit unsecured. The police had advised him to get rid of items due to potential contamination.

He did not believe he should be held liable for the items but conceded he had stored some, holding them as security of rent arrears payments.

The tribunal ruled Muirhead could not keep Malloch's belongings. These were owned by the tenant and the landlord had no right to them.

Muirhead told the tribunal about events of concern leading up to when the tenant abandoned the property.

He said Malloch talked about how people were after him and became very paranoid, taping up the windows and blinds, having a spotlight or floodlight permanently on facing the outside and installing a camera.

Muirhead cited an incident where "rough people visited the property at midnight looking for the tenant, claiming they were Mexican cartel and that the tenant owed them $200,000", the tribunal heard.

The landlord recalled on the evening of July 26 last year, all their cars were robbed. The tenant never returned to the property after then.

Cars robbed

Malloch only made contact via text to apologise about the cars being robbed and to say he would move his stuff out over the next couple of days.

Then, events took a turn where a search warrant of the premises was executed by the police last August 5. That was on the grounds of suspecting the tenant had committed various offences under the Misuse of Drugs Act, the tribunal said.

The landlord said when he took the police to the unit, the door was unlocked and the unit was a total mess.

When he asked the police what to do with the tenant's possessions, the police told him to get rid of them as they could be contaminated.

So the landlord had the locks changed and tried to contact Malloch but without success.

It wasn't until last September that the tenant's sister made contact to ask about the rent arrears and ask if she could pay that and arrange for the tenant's items to be collected.

Muirhead claimed that Malloch hadn't paid rent and he'd keep the items until the money was forthcoming.

The tribunal ruled in the landlord's favour, ordering Malloch to pay Muirhead $6691.87 of which $3300 was rent arrears and the rest compensation for cleaning, packing, transport, storage, rubbish removal, cleaning curtains and rehanging them, fixing wiring and lighting, replacing a couch, coffee table and desk.

Malloch's application against Muirhead was dismissed.