A service set up to crack down on unsafe or unhealthy rental properties has received more than 900 complaints but has penalised just nine landlords.
The Government is defending the tenancy complaints service, saying prosecutions are only a last resort for the worst offenders.
It also says it plans to double the service's resources to cope with minimum standards for rental properties which come into force next year.
But tenancy advocates say the relatively low prosecution rate and small fines mean there is little deterrent for landlords who flout the law.
The Tenancy Complaints and Investigations Team (TCIT) was set up by the National-led Government in 2016 as part of law changes which introduced mandatory insulation rules for some rental properties.
It gave the Ministry of Business, Innovation and Employment (MBIE) power to directly prosecute landlords who breached basic housing standards - rather than depend on tenants to take them to the Tenancy Tribunal.
Since then, the team has received 910 complaints and 766 of them have been resolved. Of the closed cases, breaches were confirmed on 439 occasions. Nine of these cases were taken to the Tenancy Tribunal by MBIE.
The maximum fine is $4000 and has rarely been used.
The heaviest penalty was for Invercargill landlord Murray Baird, who failed to lodge tenancy bonds on 54 occasions and had to pay $38,713 – most of which was in damages and other costs.
Two Hamilton landlords, Rachel Dryland and Bjorn Frith, were found guilty of renting out an unconsented property with no smoke alarms which later caught on fire. They had to pay damages of $800 and were ordered to refund $16,700 in rent to the tenant.
Prime Property Group were ordered to pay damages of $600 and to refund $7520 in rent to tenants who were living in a commercial building in Wellington's Molesworth St, which was later damaged and demolished after the 2016 earthquake.
Building and Housing Minister Phil Twyford backed the TCIT, saying prosecutions were considered a last resort for the handful of landlords who refused to comply.
The TCIT unit aimed to work with landlords to make sure their properties were up to standard, he said, and in most cases they made the required changes.
The unit's compliance manager Steve Watson said he was satisfied with his team's work.
"Taking enforcement action the tribunal is only one thing we do to change behaviour," he said.
"Our ultimate goal is not to punish people. It is to make them change their behaviour. Some of them just need a warning letter or a bit of time to comply."
Renters United organiser Kate Day, however, said the low rate of penalties and small fines would do little to deter bad landlords, especially those that held large portfolios.
"Even in cases where people are penalised, it is not even meeting that maximum fine. So where is the deterrent?" she said.
The TCIT unit began with just two staff but the team has since been expanded to 19.
It will soon grow in 35 after a funding boost in the May Budget, which was designed to help it deal with a group landlords who had to install insulation by a deadline of July next year.
Further minimum standards for insulation, heating, and ventilation are being developed by the Labour-led Government after a law change in November.
- 910 complaints to Tenancy Complaints and Investigations Team since establishment in 2016
- 766 closed cases
- 439 breaches of the law
- 175 warning letters and 160 binding agreements to upgrade properties
- 9 prosecutions
-$38,713 – Invercargill landlord who failed to lodge bond 54 times
-$4100 – for failing to meet health and safety regulations
-$1500 – Auckland boarding house which failed to install smoke alarms
-$7520 – Wellington property company order to pay damages and refund rent to tenants housed in commercial building
-$17,520 – Hamilton landlords refunded rent after fire broke out in unconsented property with no smoke alarms
-$2000 –for failure to install smoke alarms
-$2600 – for not lodging tenancy bonds
-$3000 – for failure to maintain property