Tenancy Tribunal Reduces Rent Increase After Fair Market Assessment

OUTCOME: Allowed

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[2026] NZTT 4574809, 4596389

4726129

TENANCY TRIBUNAL AT [Event location suppressed]

APPLICANT: [redacted]

Landlord

RESPONDENT: [redacted]

Tenant

TENANCY ADDRESS: [[NAME]]

ORDER

1. [[NAME]] must pay [The landlord/s] $0.00 immediately, being rent arrears to 24 April 2024.

Reasons:

1. Both parties attended the re-hearing. The landlord was represented by [The landlord/s representative].

2. This was a rehearing as ordered by her Honour Judge Davenport on 21 March 2025, ([case title and citation redacted]).

3. Her Honour Judge Davenport ordered that the Tribunal consider only the following matters:

a. “Was the increase from $720 to $820 in December 2022 a fair and reasonable market rate in accordance with the provisions of the Residential Tenancies Act? If not, was $820 the right sum that should be charged or what alternative sum should be charged?”

b. “Should the tenant be entitled to a deduction for the painting works carried out on the premises in accordance with the tenancy agreement even though they were not approved by the landlord?”

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c. “What is the proper payment of rent which should be found to be owed by the tenant?”

Market rent for [[NAME]] in December 2022

4. I have been asked to assess the market rent for [[NAME]] in December 2022.

5. Section 25 of the Residential Tenancies Act, 1986 addresses market rent. The relevant parts of this section are as follows:

25 Market rent (1) On an application made to it at any time by the tenant, the Tribunal may, in

accordance with the succeeding provisions of this section, on being satisfied that the rent payable or to become payable for the tenancy exceeds the market rent by a substantial amount, make an order reducing the rent to an amount, to be specified in the order, that is in line with the market rent.

and

(3) For the purposes of this Act, the market rent for any tenancy shall be the rent that, without regard to the personal circumstances of the landlord or the tenant, a [NAME] landlord might reasonably expect to receive and a [NAME] might reasonably expect to pay for the tenancy, taking into consideration the general level of rents (other than income-related rents within the meaning of section 2(1) of the Public and Community Housing Management Act 1992) for comparable tenancies of comparable premises in the locality or in similar localities and such other matters as the Tribunal considers relevant.

6. In the case of [COMPANY] v [NAME] and [NAME]-J2023-[PHONE], his Honour Judge Tuohy at [25] of his judgment determined that to set a market rate an Adjudicator must first determine “on the basis of some evidence which the Tribunal accepts” what the market rate for a property of a particular type, is. The Tribunal must then determine whether the rent in question substantially exceeds this amount.

7. There was some discussion as to the qualities of this property. Both parties produced photographs of the exterior which show this to be a house that looks to me like a standard 1960’s weatherboard bungalow that has subsequently been raised on a breeze-block base, and then had the wooden joinery replaced with aluminium joinery. The tenant also produced interior photographs which were helpful. They show the upstairs to be very tidy in all regards and better than a lot of similarly aged rental properties. The utility areas are relatively modern. Downstairs has not been renovated and is in average condition.

https://www.legislation.govt.nz/act/public/1986/0120/157.0/link.aspx?id=DLM269435#DLM269435

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8. The landlord said there were three or four bedrooms upstairs and four bathrooms. The tenants said there were three bedrooms upstairs, a small entrance room, a living area, and a rumpus room downstairs.

9. Having seen the photographs, I determine this house is best described as a three-bedroom house with a rumpus room downstairs. For the sake of comparison I consider the downstairs rumpus room could be described as a fourth bedroom. There are two showers and three toilets. In total I consider this to be 2 ½ bathrooms. The total floor area is 200 square meters. The premises are on a 1313 square metre section.

10. The landlord produced a document, “Rental Appraisal [[NAME]]” dated July 2023. This is a document that appraises the property’s rental value as $800.00 - $850.00 per week. The information used to arrive at this appraisal is not included or referred to. “Market Rent Statistics” are provided which say that for a 4-bedroom house, the average lower quartile rent is $700.00 per week, the median rent is $745.00 per week, and the upper quartile is $780.00 per week.

11. According to this information, even rent for an upper quartile house of similar size is less than was sought from these tenants after the rent increase in December 2022.

12. However, there are no specific properties included in this information that can be used for a comparison.

13. The tenants provided two documents regarding market rent. The first is titled “Rental and Market Appraisal” produced by [NAME] in October 2022, and the second is titled Comparative Market Analysis produced by [[NAME]] in October 2022

14. The [NAME] document compares [Tenancy addressed suppressed] to 10 other properties in [suburb]. No information is given for floor size or land size of the properties. The houses look to be smaller but newer. Nine of them have four bedrooms and one has three bedrooms. Seven of them have two living areas, one has 3 living areas and two have one living area. The lowest weekly rental is $590.00 and the highest is $710.00.

15. The [[NAME]] document lists five different properties for comparison. They are built between 1975 and 2008 so are newer than [[NAME]]. They are also smaller, ranging from 100 – 193 square metres floor area, and on smaller sites of 451 square metres to 718 square metres. They all have 4 bedrooms. The living areas aren’t listed. Weekly rents range from $520.00 to $670.00 per week.

16. Having looked closely at the information provided in these documents, I am prepared to accept that in some regards [[NAME]] is better than most of the other properties presented. It has the largest section (not

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always an asset in a rental market) and it has the largest floor area. It is two storeys and has good separation of living areas. As well as the solid construction of the 1960’s it has also been updated in many regards. Against these qualities, it presents as an older house, and may not be as attractive as some of the other properties to some people.

17. I consider the rent of $720.00 per week to be a fair appraisal as at the end of 2022. I cannot see justification for any higher than this amount. None of the other properties was higher than $710.00 per week, and whereas I assess [[NAME]] as better than the other properties, it is a matter of horses for courses: not everyone is looking for the same qualities in a house, and it may be that other people would rate the comparisons differently. At best it is not much better than the best of the other houses.

18. I must then consider whether $820.00 per week exceeds the market rent by a substantial amount. That is an increase of almost 14%. Without question I consider this to be substantially above the market rate. I therefore order that the rent from December 2022 be reduced from $820.00 per week to $720.00 per week, until the end of the tenancy.

The painting

19. At the beginning of the tenancy there was an agreement between the landlord and the tenants that the tenants would paint the premises and the landlord would reimburse them for their reasonable costs.

20. During the tenancy the tenants painted a substantial part of the interior and a substantial part of the exterior of the premises. The tenants calculated that their reasonable costs amounted to $5,400.00.

21. The tenants have produced a rent summary running from 28/10/2022 until the end of the tenancy on 24/04/2023. They have deducted the $5,400.00 they say is owing to them, on 13/04/2023.

22. The landlord does not dispute the amount owed. It is ordered by consent.

Rent arrears

23. The rent summary produced by the tenants says that after the $5,400.00 fee for painting has been taken into account, and on the basis that the rent did not increase to $820.00 but stayed the same at $720.00 per week until the end of the tenancy, then at the end of the tenancy they owed the landlord $8,840.00.

24. Notwithstanding the differences due to whether the increase in rent to $820.00 per week should be upheld, the landlord today agreed with the tenants’ rent summary except for three entries which they say they had no record of. These

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were payments of $720.00 on 30 March 2023, 14 November 2023 and 23 December 2023.

25. The tenants did not have bank records with them at the hearing, and so were given until 3.00 pm today to provide records that verified these payments. [[NAME]] understood that failing that, I would have to conclude the three payments totalling $2,160.00 hadn’t been made.

26. As at 3.00 pm today [[NAME]] has provided information which I consider verifies the payment of rent made on 23 December 2023. No information in support of the other two payments having been made has been received by the Tribunal. I have therefore added the amount of $1,440.00 back on to the tenant’s rent summary amount of $8,840.00.

[APPELLANT] 23 June 2025

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Please read carefully: Visit justice.govt.nz/tribunals/tenancy/rehearings-appeals for more information on rehearings and appeals.

Rehearings You can apply for a rehearing if you believe that a substantial wrong or miscarriage of justice has happened. For example: • you did not get the letter telling you the date of the hearing, or • the adjudicator improperly admitted or rejected evidence, or • new evidence, relating to the original application, has become available.

You must give reasons and evidence to support your application for a rehearing. A rehearing will not be granted just because you disagree with the decision. You must apply within five working days of the decision using the Application for Rehearing form: justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf

Right of Appeal Both the landlord and the tenant can file an appeal. You should file your appeal at the District Court where the original hearing took place. The cost for an appeal is $260. You must apply within 10 working days after the decision is issued using this Appeal to the District Court form: justice.govt.nz/tribunals/tenancy/rehearings-appeals

Grounds for an appeal You can appeal if you think the decision was wrong, but not because you don’t like the decision. For some cases, there’ll be no right to appeal. For example, you can’t appeal: • against an interim order • a final order for the payment of less than $1000 • a final order to undertake work worth less than $1000.

Enforcement Where the Tribunal made an order about money or property this is called a civil debt. The Ministry of Justice Collections Team can assist with enforcing civil debt. You can contact the collections team on [PHONE] or go to justice.govt.nz/fines/civil-debt for forms and information.

Notice to a party ordered to pay money or vacate premises, etc. Failure to comply with any order may result in substantial additional costs for enforcement. It may also involve being ordered to appear in the District Court for an examination of your means or seizure of your property.

If you require further help or information regarding this matter, visit [NAME]/disputes/enforcing- decisions or phone Tenancy Services on [PHONE].

Mēna ka hiahia koe ki ētahi atu awhina, kōrero ranei mo tēnei take, haere ki tenei ipurangi [NAME]/disputes/enforcing-decisions, waea atu ki [NAME] ma runga [PHONE] ranei.

https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals https://www.justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals/ https://www.justice.govt.nz/fines/about-civil-debt/ https://www.[NAME] https://www.[NAME] http://www.[NAME]

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A manaomia nisi faamatalaga poo se fesoasoani, e uiga i lau mataupu, asiasi ifo le matou aupega tafailagi: [NAME]/disputes/enforcing-decisions, pe fesootai mai le Tenancy Services i le numera [PHONE].

Reasons: