Tenant Awarded Compensation for Faulty Heat Pump

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[2025] NZTT 5184857

TENANCY TRIBUNAL AT MASTERTON | TE TARAIPIUNARA RETIHANGA KI WHAKAORIORI

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted]

Landlord

TENANCY ADDRESS: [ADDRESS], [POSTCODE]

ORDER

1. [COMPANY] must pay [NAME] $100.00 immediately, being compensation for a non-working heat pump.

2. The application is referred to mediation at the direction of the Tribunal.

REASONS

1. The Tribunal must consider an application filed by the tenant against the landlord. The claim relates to a faulty heat pump at the premises, and various orders around that, including compensation for the replacement cost of the unit which the tenant paid for.

2. Both parties appeared at the hearing in Masterton today.

BACKGROUND

3. The tenancy commenced on 28 September 2023. The landlord is Kāinga Ora Homes and Communities, and the sole tenant is [NAME].

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4. During the tenancy, there was a problem with the heat pump. The tenant states she raised this first with the landlord on 20 August 2024.

5. The unit was manufactured by [NAME]. I am not sure whether it was the landlord or developer who arranged it, but on 20 November 2024 a technician from [NAME] assessed the unit.

6. On 29 November 2024, the company who assessed the unit, wrote to the landlord stating there were two problems with the unit, one was a circuit board that they replaced, and secondly there was a leak which fell outside of the warranty, because it was a fault arising from poor workmanship with the installation. It was recommended that the original installer return to repair the unit.

7. When the heat pump was not fixed, the tenant issued the landlord a 14 day notice on 29 November 2024. The notice says:

I am writing to let you know that you are in breach of your responsibilities as a landlord by:

Failing to fix heat pump / ac within a reasonable timeframe – 15 weeks.

Please remedy this by doing the following:

[NAME] to fix within 14 days contact number…

If I don’t hear from you and you don’t remedy the situation by 14/12/24 (at least 14 days from but not including today) I may apply to the Tenancy Tribunal.

The Tenancy Tribunal may order work to be done or make any other appropriate order. I can also ask the Tenancy Tribunal to terminate this tenancy.

8. The landlord offered to supply a hard-wired heater. The tenant declined that request.

9. On 4 December 2024, Kāinga Ora instructed [NAME] to do the following work:

HP [heat pump] has been assessed by [NAME], a leak between the external and internal walls needs to be repaired (due to poor installation).

10. I also note an email to the tenant that same day from the property manager confirming to her that a work order had been raised.

11.The tenant fell into rent arrears. The landlord sent the tenant a reminder notice about the rent payments on 31 January 2025.

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12.[NAME] then instructed [NAME] to attend and assess the heat pump. [NAME] attended the premises. Various work was undertaken to try to get the unit operational, but ultimately the technician determined that the compressor had failed or was failing. The technician determined that the entire unit would require replacement.

13.At the tenants request, a quotation for the replacement of the unit was issued by [NAME] on 13 January 2025 to [NAME], being a quotation for $2,650.49.

14.On 14 January 2025, [NAME] emailed [NAME] advising:

a. They had assessed the unit following instructions from the landlord. b. It would be most cost effective to replace the unit. c. The original installer installed the unit incorrectly. d. The replacement cost would be around $2,700.00 e. “To your question ‘could you take the unit with you when you leave

the house’ yes, we would decommission it an reinstall it for you.” f. “Point to be made is that the people who installed the existing unit

should be made to correct issues by replacing it”.

15.On 16 January 2025, the landlord approved a further assessment of the heat pump, and “if easiest” replace unit”. I took the approval to mean that if the unit could not easily be fixed, then the contractor could proceed to replace it.

16.The tenant elected to proceed with replacing the heat pump unit herself.

17.The tenant states that on 23 January 2025 the heat pump was replaced. The tenant has provided a bank transfer confirmation showing that $2,650.49 was paid to [NAME] on 18 February 2025.

18.On 3 February 2025 the landlord wrote to [NAME] stating that she needed to allow trades to enter the premises. I understand that was in relation to the landlord assessing or repairing the heat pump, but it seems the landlord was not aware that the tenant had already removed and replaced the unit.

19.The landlord made arrangements for a technician to attend the premises on 13 February 2025. However I understand that did not proceed, because the landlord was unable to get in contact with the tenant prior, as the landlord did not have a key for the premises. Again it does not seem the landlord was aware of the work contracted by the tenant.

20.The parties spoke on the telephone on 14 February 2025. The notes from that conversation record that the tenant advised rent payments were late in January and February 2025 due to the heat pump issue, and that:

Tenant acknowledged but has advised her HP has been removed & placed in shed for Kāinga Ora to pick up, referring to other work order…

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TENANTS CASE

21.[NAME] states that her heat pump stopped working, and when the landlord did not do the work itself, she went and replaced the unit herself, and she now seeks to have the cost of that reimbursed.

22.[NAME] states that she originally raised a fault with the landlord for the original heat pump on 20 August 2024, and three days later someone from ‘[NAME]’ came to assess the unit, and he determined the unit needed to be replaced.

23.On 20 November 2024 someone from [NAME] came to assess the unit. He determined that because this was not a fault with the unit, rather it was an installation fault, then it could not be repaired under warranty.

24.On 29 November 2025 [NAME] came and checked the unit, and again recommended a replacement, but again nothing happened.

25.[NAME] states she continued trying to contact the landlord, but was not getting any fulsome response.

26. Come January, it was becoming difficult to live in the premises as there was no cooling or dehumidification in the premises. The tenant’s mother offered to provide the money to replace the unit, and given their circumstances that was accepted.

27.The tenant notes that there was a heater in the main bedroom that the landlord had advised they could not use because of a fault.

28.The tenant seeks compensation for not having the unit working, and also the replacement cost of the unit.

29. In her concluding submissions, [NAME] states that she did decline a panel heater because it would not have met her needs.

30.The tenant states she was not advised of the work order on 16 January. [NAME] states that it was not reasonable to require another assessment before a decision was then made to replace the unit.

LANDLORDS CASE

31.The landlord’s position is that the issue is wider than just the heat pump. The property was purchased from a developer, and the premises had some units that were not what they normally use which for heat pumps is a Haier heat pump unit, but this unit was a [NAME].

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32. In relation to this heat pump, there were two problems: the circuit board (which was replaced), and also how it was installed.

33.The landlord’s position is that is acted quickly given there was someone there within some three days, but after that, there was an involved process for approvals.

34.The landlord notes there is no requirement under the HHS to provide cooling, but in this case the landlord had offered to install a hard-wired heater.

35.Ultimately on 16 January 2025 the landlord had approved an assessment of the unit, and “if easiest replace unit”.

36.The landlord referred to its contemporaneous notes where efforts were made to contact the tenant for that work.

37.The landlord does not consider that it should be liable to fund the replacement unit because it has not been given a fair opportunity to replace the unit. The landlord further states that the tenant has not complied with the tenancy agreement or RTA in that she has undertaken significant work on the premises without the landlord’s consent.

38.[NAME] considers that if a decision was made to replace the heat pump, then it would likely have taken about two weeks for that to occur.

RELEVANT LEGAL CONSIDERATIONS

39.The relevant law that applies is found in the Residential Tenancies Act 1986 (“RTA”).

40.With any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards and expectations.

41.That includes a requirement that the party bringing the claim (the applicant), establish their claims “on the balance of probabilities”. The balance of probabilities means more likely than unlikely, or in mathematical terms, has a fractionally more than 50% likelihood. The Tribunal does not need to be certain or very sure about any claim, only that what is claimed is likely.

42.This obligation carried by the applicant is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden.

43.As noted by the District Court in Kaipo v Clarke & McCarthy (DC) TT233/02, in practical terms this means that:

… [L]ike anyone who brings an application before a Tribunal or Court, it is incumbent upon the applicant to provide the evidence necessary to

https://www.legislation.govt.nz/act/public/1986/0120/latest/DLM94278.html?src=qs

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prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not because it is up to the applicant to provide the necessary evidence. It is not up to the other parties, and it is certainly not up to the Tribunal to extract evidence.

ANALYSIS

44.This dispute centres around a faulty heat pump unit at the tenancy, and liability for that unit.

45.The starting point must be to consider what the parties’ responsibilities are.

46.The landlord has a requirement under the Healthy Homes Standards (HHS) to provide an approved form of heating, and that could be a heat pump. I record here that I presume the original heat pump in the premises was the required size, so if that were the case, then the premises would be HHS compliant.

47.However, it is clear that the original heat pump was faulty. That then engaged obligations for both the tenant and landlord.

48.The tenant has an obligation to notify the landlord when repairs to the premises are needed (RTA section 40(1)(d)), and the tenant complied with that obligation in late August 2024, when she advised the heat pump was not working properly (or at all).

49.The obligation then moved to the landlord to repair the heat pump. That obligation is found in section 45(1)(b) of the RTA, where the landlord is required to repair or maintain the premises. In short, because the original heat pump was part of the rental premises, when it became faulty the landlord needed to fix it.

50.The evidence is that [NAME] attended the premises within a matter of days after being notified, but there was a long delay for further action from there.

51.[NAME] did attend in late November, and replaced a circuit board, but did not repair the other fault as it was deemed to be an installation problem, and outside the warranty cover.

52. I record here that because this was a unit under warranty, it was correct and proper for the landlord to start with [NAME] assessing and repairing the unit, because if it was a manufacturing fault, then it would have been repaired at no cost.

53.Then on 4 December 2024 the landlord instructed another contractor to attend and address the installation problem, and that was also an appropriate course of action. [NAME] was instructed.

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54. I am not certain the date [NAME] attended, the background from the tenant does not record that, neither it this recorded on the documents from [NAME], but plainly it was on or before 13 January 2025. [NAME] recommended that the original unit be replaced.

55.What then happened is that the tenant instructed [NAME] to replace the unit at her cost, and that installation happened on 23 January 2025.

56.The tenant has provided a log of contacts with the landlord, but there is no record of any communications with the landlord between 14 December 2024 and 23 January 2025 in relation to the tenant proceeding to replace the unit. The tenant does note that there was a housing check on 16 January 2025 where there was a verbal conversation about “concerns on what was wrong with the house”. My very strong impression is that the first time the landlord became aware of the tenant wanting to pay for her own installation of a heat pump, was on 14 February 2024, well after the installation had occurred.

57.When I step back and consider the evidence I have available, I do consider the landlord was likely to have been slow in having the initial work with [NAME] occur, but after that I do not consider the landlord’s actions were unreasonably slow.

58. I take into consideration the intervening Christmas shutdown period which would cause expected delays with contractors.

59.But it is plain that by 16 January 2025 the landlord had approved the replacement of the heat pump unit, and I can see that the landlord had made efforts to contact the tenant about this, but those communications were not successful. But what is clear is that the landlord was working toward having the heat pump repaired, if not replaced.

60.The problem for the tenant with her claim for reimbursement of the heat pump replacement cost, is that the law is not on her side. The primary problem for the tenant is that the obligations around maintenance are on the landlord – not the tenant. In fact, section 45(1)(d) of the RTA expressly limits circumstances when a landlord can be liable to the tenant for maintenance or repair costs the tenant does. That provision confirms that the landlord shall:

(d) compensate the tenant for any reasonable expenses incurred by the tenant in repairing the premises where— (i) the state of disrepair has arisen otherwise than as a

result of a breach of the tenancy agreement by the tenant and is likely to cause injury to persons or property or is otherwise serious and urgent; and

(ii) the tenant has given the landlord notice of the state of disrepair or made a reasonable attempt to do so; and

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61. In order to be liable to compensate the tenant, I must be satisfied that the repairs were likely to cause injury to a person or are otherwise serious or urgent, and I do not consider that test would be met.

62. It is also the case that the RTA prohibits a tenant from installing fixtures, undertaking renovations, alterations or making additions to the premises, without the consent of the landlord. I agree with the landlord, that installing a new heat pump would fall into that category, so the landlords written consent was needed before the tenant proceeded with this work.

63.This is not to say that the tenant did not have any remedy, certainly she did. If the tenant considered the landlord was acting too slowly with having the faulty heat pump addressed, then she was able to seek orders from the Tribunal. The Tribunal could have made work orders to have the original unit repaired or replaced, or to order that the tenancy terminate. I record that the tenant issued a 14 day notice which indicated those outcomes could be sought (not that the tenant do the work and claim that cost from the landlord).

64.For the above reasons, I find the tenant’s application for refund of the installation cost must be dismissed. There is no legal basis upon which I could order the installation cost of the unit be paid by the landlord.

65.However I do consider it reasonable to order some compensation be paid to the tenant for having a non-working heat pump. The tenant was paying rent to the landlord and that rent included an expectation of a working heat pump. The tenant did not have a working unit between August and January, so she was not getting what she was paying rent to receive. I consider a fair level of compensation for that would be $100.00, taking into account the level of rent the tenant was paying, and the loss of amenity for her proportionally to her rent payments.

Referral to mediation

66. I have determined that this matter should be referred to the Tenancy Mediation Service, and I make that order. While this order addresses the strict legal obligations, it leaves the situation for both parties in an inadequate state.

67.As I have indicated above, the HHS requires that the landlord to provide a qualifying form of heating, like a heat pump. The obligation to provide that is on the landlord, not the tenant. It is not a defence to a breach of the HHS for the landlord to say that a heat pump was not provided, because the tenant already had one. Providing a heat pump is a positive obligation on the landlord.

68.Strictly speaking, the landlord still needs to provide the tenant with a heat pump. In my view, a sensible way forward would be for the landlord and

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tenant to reach an agreement around ownership of the heat pump, transferring to the landlord, no doubt for a contribution towards the installation costs. That would also mean that the tenant tenant would not be facing the cost of removing the unit at the end of the tenancy, which she would otherwise need to do.

69.While I consider that would be the sensible way forward, the alternative would be for a second heat pump to be installed, but the parties could discuss this with the assistance of a mediator, and I am sure a sensible solution can be agreed to meet all parties’ needs.

[NAME] 09 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 tenancy.govt.nz/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 tenancy.govt.nz/disputes/enforcing-decisions, waea atu ki Ratonga Takirua 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.tenancy.govt.nz/disputes/enforcing-decisions https://www.tenancy.govt.nz/disputes/enforcing-decisions http://www.tenancy.govt.nz/disputes/enforcing-decisions/

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