“My impression is that the landlord has elected to evade its obligations under the RTA, and to beguile its tenants into believing they had less rights than they did,” tribunal adjudicator Rex Woodhouse said in his recently released finding.
Woodhouse said the company reported having 600 tenancies, making it “one of the larger landlords in New Zealand”.
“Similarly the number of tenancies which may be impacted could be up to 600, which is by any measure a very significant number.
“A large landlord such as this must know what it is required to do in law.”
It wasn’t a tenant who dragged the company to the tribunal, but the Ministry of Business Innovation and Employment, which investigated its tenancy agreements.
The ministry’s tenancy compliance and investigations team requested the company’s five most-recent tenancy agreements and found they breached parts of the act. It ordered an improvement notice, which meant the company needed to amend those agreements as well as any other properties that might also be in breach.
The company failed to make the required improvements so the ministry took it to the tribunal where it was fined $2000.
Renter’s United president Geordie Rogers describes the fine as “measly” for a company as large as Property Management Wellington.
“I doubt this is in any way a deterrent for a landlord with 600 properties,” he told NZME.
“I really don’t think it’s too much to ask for landlords to have to comply with the law.”
It’s the first time since legislation came into force in 2021 that this kind of offence has been prosecuted.
At a hearing this year the company’s director, Craig Relph, said his company had made the necessary changes to its tenancy agreements by February last year but accepted there had been no backdating of the 600-odd tenancies that the problem clauses related to.
Relph also said that some of the conditions were verbally explained to tenants and it would be “near impossible” to update all existing tenancy agreements. He also said that he was unaware that MBIE had issued the company an improvement notice.
However, Woodhouse dismissed that claim saying there was email evidence produced that showed Relph was aware of it and instructed an employee to supply MBIE with the information it had asked for.
Woodhouse also dismissed Relph’s claim that it wouldn’t have been unreasonable to notify his 600 tenants there were issues with their agreements.
“It makes no difference whether the landlord had one tenant, or 600, the rules apply equally,” he said.
Woodhouse went on to state that it didn’t matter that the company hadn’t actually effected an unlawful rent increase and that simply “having the clause in the agreement is the unlawful act”.
A spokesperson for Property Management Wellington Ltd said it didn’t own any of the properties it managed and that the tribunal’s finding was “disappointing”.
“There was categorically no intent to mislead any tenant. The issue raised by MBIE related to just 5 tenancy agreements of the 600 we manage,” the spokesperson said in a statement to NZME.
The spokesperson said the company hadn’t increased rent for any of its tenants within the 365 day minimum period but accepted it should have advised tenants affected by the unlawful agreements that an error had been made.
“They should have been notified, and we take full ownership for the error.”
The company said it had since implemented industry-standard leases that were written and provided by a third-party.
In response to the tribunal’s ruling MBIE’s national manager for compliance and investigation, Brett Wilson, said it was disappointing that such a large company had failed to comply with the law.
“Property managers should be aware of their obligations under the Residential Tenancies Act and work to ensure they are meeting them,” he said.
Rogers said that an improvement notice was a way for a third party like MBIE to step-in and get involved in breaches to renters rights and the ruling potentially paved the way for individual tenants to take the company themselves, essentially piggybacking off this ruling.
“If they had those unlawful clauses in their own tenancy agreements then they would have a good leg to stand on,” he said.
Jeremy Wilkinson is an Open Justice reporter based in Manawatū covering courts and justice issues with an interest in tribunals. He has been a journalist for nearly a decade and has worked for NZME since 2022.
