A landlord dropped his claim for part of the profits made in a brothel being run from his property after the tenant "vanished".
Earle Properties Limited director Lionel Earle said tenant Jo (Kelly) Lien ran a brothel in his Wellington rental property but failed to attend the two tribunal hearings that followed, causing him to abandoned the application to take some of the profit.
Earle said he first became aware of Lien's business when police got in touch to say they had received a complaint.
He told Lien to close it down, adding that they did not want a brothel on the property and that it breached the one-resident maximum in the tenancy agreement, Earle said.
She had not asked permission to run a business from the residential property, he said.
Both parties agreed to end the tenancy.
Earle believes each girl was making about $900 per day, based on documents he found when later cleaning the property.
Earle's company sought a share of the brothel's profits, a move he stands by because he said he was aware of a recent subletting dispute which had been awarded in the landlord's favour.
However, he said he withdrew the application because it was simply impossible to claim money from someone who could not be found.
"She never turned up for the hearings," he said.
"We don't know where she is. We don't know her address.
In order to claim the bond they needed to close the case, he said.
"Why keep the case open? It had already dragged on for six months."
New Zealand Prostitutes' Collective national coordinator Catherine Healy said she wondered if a cut of the profits would have been sought if the business had been another occupation.
Take the fact in is a brothel out of the equation and it is "extraordinary" that they would feel a right to do that, she said.
"It's absolutely outrageous."
However, the adjudicator ruled there was evidence Lien had allowed four other people to live at the rental and work in her brothel, awarding Earle Properties $500 in exemplary damages.
The landlord also won a further $1300 for cleaning, rubbish removal, pest control and refurbishing at the property.
Three sets of curtains at the premise needed to be replaced because they were ripped and damaged by mould and a kitchen bench was also damaged.
Earle said the $1800 sum from the bond did little to compensate for the stress and damage caused.
But he had taken away certain lessons from the experience.
Landlords should always take before and after photos, keep receipts of costs associated with damage to the property and engage Tenancy Services as soon as possible, he said.
Executive Officer of the New Zealand Property Investors' Federation Andrew King said over the past eight years overcrowding properties had become more of an issue.
Another ongoing problem remained the amount of time it took to pursue a matter in a Tenancy Tribunal and tenants could use that to their advantage, he said.
He himself had been in a position in which a tenant had refused to pay rent knowing that any hearings would be many weeks away, he said.
Under the Prostitution Reform Act 2003 (PRA) residential properties can be used for the purposes of prostitution as long as they comply with existing district bylaws.