State housing provider Kāinga Ora must pay two of its tenants $1500 each and reduce their rent due to the "disturbing and dangerous" behaviour of the tenants living in a neighbouring flat.
Kāinga Ora has declined to evict the troublesome pair, saying keeping people housed is the best way to ensure they get the support they need.
The state housing provider, formerly known as Housing New Zealand, owns the flats on Centreway Rd in Orewa, north Auckland.
Two of its tenants separately took Kāinga Ora to the Tenancy Tribunal over the behaviour of the tenants living in the flat between them, stretching back to 2018.
The tenants "regularly bang on the walls including late at night; frequently set off their fire alarms causing considerable noise; and exhibit other disturbing and dangerous behaviours", adjudicator J Greene wrote in two findings on January 9.
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Police had been called to the property at least 15 times since 2018, while the fire service had attended five times since the behaviour began that same year.
One woman said she was "terrified" at times and had to either move rooms or go and stay with her daughter.
The tenant on the other side issued a trespass notice against the neighbours, who had called police several times claiming he was making methamphetamine.
Kāinga Ora had involved the police and the fire service, issued breach notices, contacted the offending tenants' doctor, and had spoken with the tenants, but they had refused to engage, Kāinga Ora's representative, a Mr Khor, told the tribunal.
Khor said the agency's policy was not to terminate tenancies or issue 90-day notices.
But Kāinga Ora's policy did not override the Residential Tenancies Act 1986, adjudicator Greene wrote.
"This is clearly a situation that cannot continue ... The RTA provides mechanisms for dealing with issues such as this, but Kāinga Ora has declined to take appropriate action for policy reasons."
The act obligates landlords to "not permit any interference with the reasonable peace, comfort, or privacy of the tenant".
The tribunal ordered Kāinga Ora to pay compensation of $1500 immediately to both tenants for failure to comply with its responsibilities as a landlord.
Both tenants also had their rent cut $20 each week as ongoing compensation until the problem was fixed.
Greene could not order Kāinga Ora to take action, but strongly suggested the tenants be relocated or evicted. The adjudicator also recommended Kāinga Ora liaise with local police and provide security for the other tenants at night.
The case has been adjourned for two months, after which it was expected the matter to have been resolved.
Paul Commons, deputy chief executive of the People and Homes division of Kāinga Ora, said the agency was mindful of meeting the requirements of the Residential Tenancies Act and would always do so. The agency would still transfer tenants to more suitable accommodation, or issue 90-day notices, when appropriate.
But Kāinga Ora aimed to keep people in homes as that was the best place to ensure they received the right support, including health care, he said.
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Other countries had had success helping people with behavioural problems - often caused by mental health issues and related symptoms like substance abuse - when they were safe and secure in a home, Commons said.
"Without privacy waivers from those concerned, we cannot comment on the specific circumstances of the people in this case," he said.
"In this specific case, we are working with the people concerned to make sure everyone's rights are respected and people feel safe and secure in their homes. We are working to achieve this within the timeframe the Tenancy Tribunal has set down."
In general if there were issues, Kāinga Ora would engage tenants in a "household action plan" - focused on property management, health, life or financial skills, for example, Commons said.
Kāinga Ora also worked closely with tenants with complex needs to support them and get them help from other community services.