The Barfoot & Thompson rental agent who oversaw the property on behalf of the landlords, Ms Preston, told the tribunal that "in effect, that rumpus room was being rented out on an as-is-where-is basis".
However, the Trade Me advertisement "specified clearly" that the property was being rented out as a five-bedroom property, the decision said.
"On the basis upon which the property is being advertised and rented out, there is an implied condition that a fully habitable and compliant 5-bedroom property is provided to the tenant.
"In breach of this condition, the 2-bedroom rumpus section of the property is not legally consented as sleeping quarters. It cannot therefore be called or classified as 'bedrooms'."
The decision said the property should only have been rented out as a three-bedroom house and rent charged on the unconsented section of the property should be refunded to Steven.
Exemplary damages were also payable as the rumpus had been advertised as a habitable sleeping quarters, despite it being unconsented and suffering three reported incidences of flooding.
"Overall the evidence shows that the 2-bedroom rumpus is unhealthy and unsafe to be used as permanent sleeping quarters."
The tribunal ordered Barfoot & Thompson and the Robsons to pay Steven $7522.50 in exemplary and general damages, a part letting fee refund and 37 weeks of rent abatement.
Comment has been sought from Barfoot and Thompson.