The property management group that illegally rented out space in a Wellington office block to residential tenants may have to repay the rent.

The Ministry of Business, Innovation and Employment (MBie) has submitted to the Tenancy Tribunal that Prime Property Group Limited was unlawfully renting parts of the 61 Molesworth St building to residential tenants. MBie is seeking a refund of $6000.

People were found to be living in the building after the Kaikoura earthquake in November, which severely damaged the building. It had to be demolished, with most of the tenants' household belongings still inside.

Olive and Ernest Mape said they were paying $300 a week to live in the building. They have been unable to get insurance because the building was not zoned for residential.


The application comes after an investigation by MBie's tenancy compliance and investigations team.

Manager Steve Watson said a first-floor office space had been rented to a residential tenant since June last year.

"The kitchen and cubicles were being used as bedrooms, the toilet was in a corridor through the fire exit, and the family was using a shower on the ground floor of the building.

"While there was no written Tenancy Agreement in place, both parties have stated that $300 rent was paid per week for the tenancy," Watson said.

MBie's application to the Tenancy Tribunal seeks an order for more than $6000 of rent paid by the tenant to be repaid.

It also seeks an order preventing Prime Property Group from committing an unlawful act of the same kind for the full six years available under the Residential Tenancies Act 1986, and exemplary damages of the maximum of $1000 for entering into a prohibited transaction.

"An unlawful act is always an unlawful act. However, an unlawful act committed while restrained then becomes a criminal offence as well," Watson said.

If the landlord does commit an unlawful act while restrained under Section 109A of the Residential Tenancies Act, the landlord also commits a criminal offence and is then liable, on conviction, to pay a fine not exceeding $2000.

The Ministry has also applied for repayment of the filing fee and any witness expenses.

Prime Property has not responded to a request for comment.