Tenant Awarded Compensation for Maintenance Issues Despite Owing Rent

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[2025] NZTT 5064030, 5106128

TENANCY TRIBUNAL - Wellington | Te Whanganui-a-Tara

APPLICANT: [redacted]

Landlord

RESPONDENT: [redacted]

Tenant

TENANCY ADDRESS: [ADDRESS], [POSTCODE]

ORDER

1. [NAME] and [NAME] must pay [NAME] $1,386.43 by deduction from the bond as calculated in the table below.

2. The Bond Centre is to pay the balance bond of $2,361.25 (3442335-015) immediately apportioned as follows:

[NAME]: $1,386.43

[NAME] and [NAME]: $974.82

Description Landlord Tenant Rent owed to 27 December 2024 $5,801.43 Compensation: Rent reduction for failure to mitigate loss $1,965.00 Compensation: Failure to maintain-falling rocks $500.00 Compensation: Failure to maintain safety railing $500.00 Compensation: Failure to maintain shower head leak $450.00 Compensation: Breach of healthy homes standards- kitchen extractor fan

$1,000.00

Total award $5,801.43 $4,415.00 Net award $1,386.43 Bond $1,386.43 $974.82

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Reasons:

1. Both parties attended the hearing.

Background and claims

2. This was a fixed term tenancy commencing on 14 January 2024 and due to end on 13 January 2025. However, the tenants purchased a house during the tenancy and wished to end it earlier, giving notice to terminate with effect on 26 October 2024. The landlord correctly advised the tenants that a fixed term tenancy cannot be ended by one party giving notice. However, he consented to the tenancy ending earlier on conditions that a replacement tenant was found, and the tenants continued to pay rent until a new tenancy commenced. The landlord advised the tenants that they should look for a [NAME] and the landlord also agreed that he would advertise the premises to find a [NAME].

3. The tenants vacated the premises on 26 October 2024 and stopped paying rent from 28 October 2024 onwards. A [NAME] had not been found when they vacated. The landlord took possession of the property, carrying out various works, and eventually finding a [NAME] to rent the premises from 28 December 2024.

4. The landlord seeks rent arrears owed by the tenants from 28 October 2024 until 27 December 2024. There is no dispute that the sum owed to that date is $5,801.43. However, the tenants dispute that they should be liable for the full amount on the basis that the landlord did not mitigate his loss by failing to take reasonable steps to assist in finding a tenant. Specifically, they argue that the landlord was slow to advertise the premises and did not conduct viewings until after they vacated the premises. Also they claim that the landlord failed to address various maintenance issues which was off putting to prospective tenants and the premises could not be let until required repairs were completed.

5. In summary, the landlord seeks rent to the date of the new tenancy. The tenants claim that they are not liable for rent until that date because of the landlord’s failure to mitigate loss. In addition, the tenants seek compensation for breach of healthy homes standards regarding the kitchen extractor fan and failing to maintain the premises. They also claim compensation for unlawful entry/breach of quiet enjoyment by the landlord.

6. The landlord’s claim for rent arrears is proved. However, before I consider the tenant’s defence to the arrears claim, I first determine their claims for alleged breaches of maintenance obligations because the outcome of those claims has a bearing on whether the landlord failed to mitigate his loss.

Section 66 application

7. I record my decision discussed at the hearing that the tenants do not have grounds to bring an application to reduce the fixed term tenancy under section

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66(1) Residential Tenancies Act 1986 (RTA). This provides that the Tribunal may reduce a fixed term tenancy where: there has been an unforeseen change in the applicant’s circumstances; and there would be severe hardship to the applicant if the term is not reduced; and the applicant’s hardship would be greater than the hardship to the other party if the term is reduced.

8. The tenants wanted to end the tenancy early because they entered an unconditional agreement to purchase a house which settled before the tenancy ended. This is not an “unforeseen change in the tenant's circumstances” which is the first ground that must be satisfied before s66(1) is triggered. The decision to purchase a house was planned and it was not an unforeseen circumstance. The tenants could have deferred purchasing a property, or at least deferred the settlement date, until after the tenancy ended but they did not do so. The tenants ran the risk that replacement tenants would be found. The fact that the tenants say they are enduring hardship because they cannot afford their mortgage as well as rent on these premises is not a matter that I can consider when the situation was entirely of their own doing and not unforeseen.

Has the landlord failed to maintain the premises

9. The tenants claim that the landlord has breached their obligations under section 45 RTA to provide and maintain the premises in a reasonable state of repair. They seek compensation for the breaches. I consider each of the claims in turn.

10. It is well settled that, the landlord’s obligation under s45 is to investigate and repair a defect brought to its attention within a timeframe which is reasonable in the circumstances, and as to what that time is, depends on the gravity of the problem but also on the objective attempts made by the landlord to investigate, and put right, whatever the problem might be. Furthermore, a tenant has a statutory duty to advise of any defects under section 40(1)(d) of the Act. Therefore, a tenant should promptly notify a landlord of any defects and a landlord should be given a reasonable opportunity to remedy the defect before being liable for any failure to do so.

Falling rocks

11. On or about 21 September 2024, the bank behind the house became unstable. There was some suggestion of an earthquake around this time. In any event, several large rocks and smaller debris loosened and fell into the backyard. The landlord came and inspected and subsequently engaged a [NAME] to assess the site. The tenant also helped the landlord to clear the rocks noting that one big rock could not be moved easily. The [NAME] advised that a retaining wall should be built to safeguard the property from future rock falls. However, the landlord did not have this work done until after the tenants vacated the premises. He produced invoices from his [NAME] showing that the retaining wall work was

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undertaken on 4,5,6, and 11 November 2024, and some final work on 11 December 2024.

12. The tenants submit, and I accept on the evidence, that the landlord failed to take steps to secure the bank within a reasonable time frame the after the rock fall. As a result, they were unable to use the backyard because it was not safe to do so with the landlord taking no steps to secure the bank and build the retaining wall until later. The tenants were particularly concerned for the safety of their children. The landlord attempted to argue that the falling rocks were “soft rock” However, I am not persuaded by that argument and accept that falling rocks could pose a significant hazard to anyone using the backyard at any time and without warning. Therefore, the tenants suffered a loss of amenity for the last 5 weeks that they occupied the premises from 21 September to 26 October 2024.

13. I consider that the tenants are entitled to be compensated for the loss of amenity. It is a well-accepted principle when awarding damages that, so far as money can do it, the injured party shall be put in the same position as he would have been in, but for the breach of the tenancy agreement. Liability exists for foreseeable losses flowing from the breach of a tenancy agreement. Appellate Courts have advised of the need to adopt a global approach when considering compensation awards. They have repeatedly emphasized that the assessment of the proper amount of compensation is a question of fact in each case; it is not an exact exercise, and a commonsense approach is required. There are no general or absolute rules for calculating the amount of compensation, but the primary purpose of awarding compensation is to reflect the extent of the loss actually and reasonably suffered by the injured party.

14. Having regard to all relevant factors I assess that an award of $500 compensation is justified for the loss of amenity and the significant safety hazard it presented over a five-week period.

Missing safety railing

15. Some safety railings along one side of the property where the washing line was located were missing. There is a drop from the area down a bank into a ditch below. Therefore, without the safety railing, the tenants says that someone could fall over the bank and they were particularly concerned for their children. For this reason, they did not use the washing line in this area and hung washing in the front yard instead. The tenants say that they raised this with the landlord at the start of the tenancy and he promised to fix the railings. However, the railings were not fixed during the 10 months of their tenancy.

16. The landlord acknowledged that there were some missing railings and says he had them fixed by his [NAME] after the tenants vacated the premises.

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17. I accept that the railings should have been fixed at the start of the tenancy and caused the tenants some inconvenience in having to hang washing elsewhere and ensure their children kept away from the area.

18. The defective railing is a breach of the landlord’s obligations to provide and maintain the premises in a reasonable state of repair. The tenants are entitled to some compensation. There were no photos to establish how many railings were missing and how hazardous the situation was but they were missing for the entire period that the tenants were in occupation. Therefore, I consider an award of $500 compensation is justified.

Leaks

19. On 20 February 2024, the tenants reported that the shower head was dripping constantly and there were leaks in the bathroom appearing to come from the base of the shower box. On 15 April 2024, they also reported minor water ingress through the bathroom window after heavy rain. In both instances they also sent photos of the problem areas. The tenants complain that the bathroom had condensation issues and mould developed around the windows. However, they did not produce any photos evidencing mould during the tenancy.

20. The landlord sent a [NAME] to look at the issues and says that there were no defects causing leaks and he advised the tenants to keep wiping windows and use the extractor fan. The landlord acknowledged that the [NAME] may have overlooked the dripping shower which was not fixed during the tenancy.

21. I am satisfied that there is no evidence to establish any defects causing leaks and mould for which the landlord would be responsible. However, I accept that the drip from the shower head was not fixed during the tenancy and may have contributed to condensation that the tenants would have to wipe down regularly. There was no evidence to suggest the drip was hot water. Failing to fix the shower head drip is a breach of the landlord’s obligation to maintain. Having regard to all relevant factors, I consider that an award of $500 is justified for the inconvenience and loss of amenity which was not addressed during the tenants’ ten-month occupation.

Backdoor

22. The tenants reported to the landlord that the backdoor was sticking and became hard to open. The landlord acknowledged the issue, and he asked the tenants to sand it. They did so, and it eased up initially but later started jamming again. The landlord noted that he did some further work on the door after the tenants vacated.

23. I consider that this is a minor issue caused when wooden doors expand and contract due to weather conditions. There was insufficient evidence to establish how long it had been an issue and of the tenants advising the landlord that it

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jammed again after sanding. In the circumstances, I consider an award of compensation is not justified.

Oven door

24. The tenants advised the landlord by email on 28 September 2024 that the oven door detached when they were cleaning it. The landlord did not fix the door until after the tenants vacated. Therefore, the oven was without a door for a month of their tenancy. The tenants advised that they never used the oven during the tenancy. However, the landlord is obliged to provide a working oven that can be used for baking and failure to reinstate the door is a breach of that obligation. However, the effect on the tenants was minimal. Therefore, I consider an award of compensation is not justified.

Has the landlord failed to mitigate loss such that the rent owed should be reduced?

25. It is accepted that the landlord is owed rent of $5,801.43 by the tenants up to the date a new tenancy for the premises began on 28 December 2024. However, the tenants argue that they should not be liable for the full amount because the landlord failed to take reasonable steps to mitigate his loss. They argue that he failed to take reasonable steps to assist them to find new tenants. They also argue that the landlord’s failure to address the above maintenance issues was off putting to prospective tenants and delayed the time it took to find new tenants until after the issues were fixed.

26. Section 49 RTA provides: “Where any party to a tenancy agreement breaches any of the provisions of the agreement or of this Act, the other party shall take all reasonable steps to limit the damage or loss arising from that breach, in accordance with the rules of law relating to mitigation of loss or damage upon breach of contract.”

27. The District Court has accepted that a landlord who has received a notice to terminate a fixed-term tenancy that was outside of the available grounds provided by law, has an obligation to mitigate any losses by taking “sensible, prudent and immediate steps” to find another tenant and to cover the potential period of loss.1

28. The District Court has also accepted that s 49 of the RTA imports an objective test, and that the landlord is not completely free to choose their preferred tenant or tenancy circumstances if they wish to recover losses from an earlier tenant who has breached their contract.2

29. In summary, a sensible, non-technical, and economically efficient approach has been taken to the question of mitigating losses in the context of the RTA.

1 Davies v Clarke [2017] NZDC 21608 at [46]. 2 McDonald v Inwood DC Wellington CIV-2008-085-1269, 28 February 2008 at [17]–[18].

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Overall both landlords and tenants are expected to act reasonably and promptly.

Discussion of factors affecting mitigation of loss

30. On receiving the tenants notice to end the fixed term tenancy early, the landlord asked the tenants to find a replacement tenant but also agreed to advertise for a replacement himself. When the landlord inspected the premises after the rock fall, and just after receiving the tenants notice to end the tenancy early, he advised the tenants by email on 22 September 2024 that he felt the property was untidy and cluttered. He stated that he would not advertise the premises until they were cleaned and tidied. The tenants immediately expressed their concern noting that they had a function the night before and needed to tidy but that this was not a reasonable basis to delay advertising. It seems the landlord relented and advertised the premises on the [NAME] site on 24 September 2024. Therefore, I am satisfied that the landlord took reasonable steps to advertise the premises for let.

31. The next issue is that the landlord was reluctant to conduct viewings for prospective tenants who expressed interest through [NAME], unless the tenants were also present at the premises. The tenants had made it clear to the landlord that they were happy for viewings regardless of whether they were present or not. However, the landlord confirmed at the hearing that he did not arrange open home viewings until after the tenants left the premises on 26 October 2024. I accept that this factor would contribute to the delay in renting the premises.

32. The tenants say that they arranged viewings for 2 prospective tenants and gave them the landlord’s contact details. However, it seems that they did not apply for the tenancy.

33. The tenants main concern is that the outstanding maintenance issues were off putting to tenants and the landlord’s delay in fixing those issues was a contributing factor as to why a [NAME] could not be found within 3 months of them giving notice of their wish to end the tenancy. They submit that the unsecured bank in the backyard was a significant hazard, and tenants would not want to rent premises until it was secured with a retaining wall. Similarly, the broken safety railings; the absence of an oven door, and to a lesser extent the leaking shower head, and the sticking back door would be issues that tenants would wish to see fixed before applying for the tenancy. Notably, the landlord’s evidence established that after taking possession of the premises on 26 October 2024, work to address the retaining wall and safety railing was conducted on 4, 5, 6, and 11 November 2024, and some final work on 11 December 2024. Assuming the bulk of the work was done in November, this was approximately two weeks after the tenants vacated. There is no reason why it could not have been done sooner, given that this was exterior work in

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areas not being used by the tenants. I accept that the tenants concern about outstanding maintenance would have contributed to the delay in renting the premises.

34. The landlord says that the rental market at that time was difficult and should be taken into account. However, he did not produce any empirical evidence to support that submission. I accept that to some extent there is anecdotal evidence that renting premises at the end of the year towards the Christmas break can be difficult.

35. After carefully considering all the available evidence, I am satisfied that the rent owed to the landlord ought to be reduced on the basis that the landlord did not take reasonable steps to mitigate loss after the tenants gave notice to end the tenancy early. I am persuaded that the delay in carrying out repairs (especially the retaining wall and safety railing) would be unattractive to prospective tenants and likely dissuade them from applying for the tenancy. There is no reason why this work could not have commenced while the tenants were still in occupation. Also, the decision not to arrange open home viewings while the tenants were in occupation was also unreasonable and delayed the process unnecessarily. Balanced against that, there is little evidence of the efforts the tenants made to find a [NAME] before departing on 26 October 2024.

36. On balance, I consider that the landlord must wear the two week’s rent which accumulated while repairs were being conducted at the premises after the tenants had vacated during the period from 29 October 2024 to 11 November 2024 and for the work carried out on 11 December 2024. In relation to the failure to start the works sooner and hold open homes sooner, I consider a further one week’s rent should be discounted. In summary, the rent owed to the landlord is reduced by $1,965.00 or the equivalent of 3 weeks for the landlord’s failure to take reasonable steps to mitigate his loss.

37. I note that the parties have already agreed at mediation that the landlord be reimbursed with the advertising and credit check costs for prospective tenants, and this has been deducted from the bond.

Has the landlord breached Healthy Homes Standards?

38. The tenants claim that the landlord has breached the landlord’s obligations under section 45(1)(bb) RTA which requires compliance with the Residential Tenancies (Healthy Homes Standards) 2019 (HHS). The tenants consider that the landlord has failed to comply with the HHS ventilation standard. They seek compensation for the breach.

39. Compliance dates for the HHS vary depending on the tenancy. This rental was required to comply within 120 days of the commencement date. Therefore the last day for compliance was 13 May 2024.

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40. The ventilation standard requires that each kitchen and bathroom have extractor fans installed with a minimum defined extraction capacity.

41. I accept on the evidence presented at the hearing, and as acknowledged by the landlord, that the rangehood in the kitchen does not vent to the outside in breach of the HHS. Notably, the HHS compliance statement attached to the tenancy agreement incorrectly records that the premises comply with extractor fan requirements and does not state that any exemption applies.

42. The tenants are entitled to compensation for the landlord’s failure to supply a compliant kitchen extraction fan system. The landlord argues that there would have been little impact on the tenant because the kitchen and adjoining dining and lounge area is open plan with 8 large windows, a sliding door and a functional DVS system. However DVS systems are not suitable to meet the standard and the fact that there are opening windows and doors in the area is also irrelevant. Strict compliance is required.

43. The tenants are paying for a home that meets the HHS and where it does not, that is a loss of amenity which entitles them to compensation. For the 10-month period of their tenancy without a compliant kitchen extractor fan, I award $1,000 which I consider justified.

Has the landlord entered the premises unlawfully/breached quiet enjoyment?

44. A landlord may not enter the premises during the tenancy except with the tenant's consent, in an emergency, or after giving the required notice for inspections and repairs and maintenance. See section 48(1) and (2) RTA.

45. Furthermore, a landlord must not interfere with the reasonable peace, comfort or privacy of the tenant in their use of the premises. See section 38(2) RTA.

46. The tenants claim the landlord entered the premises without consent or notice when he came to inspect the rock fall on 22 September 2024. The tenants say that after looking at the backyard, the landlord entered the interior of the premises. The tenants thought this was because he wanted to look at the back door issue, but he opened various cupboards at the premises without asking permission and had not given notice of an interior inspection. The tenants immediately emailed the landlord the next day to express their concern over this behaviour.

47. The landlord says he only checked the laundry cupboard because of a previous leak in that area. He denies opening other cupboards as alleged.

48. The tenants are correct that the landlord is not entitled to inspect the interior without prior notice and where notice is given, opening cupboards other than for a valid purpose (such as checking a leak) may be an interference with privacy.

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49. I consider that the incident complained about happened once only and after the tenants advised the landlord of their concerns, it did not happen again.

50. The tenants also complained that the landlord telephoned them and argued about vacating the property and looking for a [NAME], which they say was a breach of their quiet enjoyment. However, relationships between a landlord and tenant will inevitably involve interaction on a personal level and sometimes there will be a difference of opinion. However, that cannot become the sole basis for a breach of quiet enjoyment claim.

51. I am not persuaded that either incident amounts to a breach that justifies an award of compensation. The claim is dismissed.

Suppression and filing fee

52. Both parties applied for suppression of their names and identifying details. Section 95A RTA provides that the Tribunal must, on the application of a party that has wholly or substantially succeeded in proceedings, order that the party’s name or identifying particulars not be published, unless the Tribunal considers that publication is in the public interest or is justified because of the party’s conduct or any other circumstances of the case. I consider that neither party has wholly or substantially succeeded in the proceedings and, decline to order suppression to either party. For the same reason, I do not award reimbursement of the filing fee to either party.

[NAME]

25 February 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].

Reasons: