Tenant Ordered to Pay Rent Arrears and Break Lease Fee

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[2025] NZTT 4966673

TENANCY TRIBUNAL AT VIDEO LOCATION

TE TARAIPIUNARA RETIHANGA KI VIDEO

APPLICANT: [redacted]

Landlord

RESPONDENTS: [redacted]

Tenants

TENANCY ADDRESS: [ADDRESS], [POSTCODE]

ORDER

1. The Bond Centre is to pay the bond of $1,680.00 (3012431-018) to [COMPANY] immediately.

2. [NAME] and [NAME] must pay [COMPANY] $1,452.42 immediately, calculated as shown in table below.

Description Landlord Tenant Rent arrears from 20/05/24 to 24/06/24 $2,460.00 Break lease fee $645.42 Filing fee reimbursement for application 4966673 $27.00 Total award $3,132.42 Bond $1,680.00 Total payable by Tenant to Landlord $1,452.42

Reasons:

3. Both parties attended the hearings on 25 November 2024 and 18 February 2025. The tenants were represented by [NAME] at both hearings, and they had a friend [NAME] with them at the 18 February 2025 hearing as a support person and a witness.

4. The landlord has applied for rent arrears, compensation, refund of the bond, and reimbursement of the filing fee following the end of the tenancy.

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Background

5. The tenants viewed the 2-bedroom rental premise in early January 2024. [NAME] confirmed that he was with the tenants at that initial viewing and that the tenants had informed the landlord that they were seeking rental accommodation for 3-6 months as they were waiting for family to arrive and would require more than two bedrooms at that time. The landlord denies being told the tenants that they had family coming and submitted that he would have questioned why they were looking at a two-bedroom house if they would be looking to move again in 3 to 6 months’ time.

6. After the initial viewings, the tenants completed a pre-tenancy application form each on 8 January 2024. In these pre-tenancy application forms, the tenants indicated they are looking for rental accommodation for between 3 to 12 months. In these pre-tenancy application forms the tenants also confirm their prior tenancies have all been for a year or more. When the landlord undertook a reference check, [NAME]’s boss confirmed that the tenants had told him they were looking for long term accommodation and based on that assurance and the tenants’ prior rental history, the landlord considered the tenants would commit to a 12-month fixed term tenancy that would give both parties some security for that period.

7. The landlord says he was not interested in letting the premise for less than 12 months, as the cost of short-term rentals is prohibitive. He submitted that he as [NAME] had a stable job, that would cover the rent, and [NAME] had told his boss he was looking for long term accommodation, he made an initial offer of a fixed term tenancy by text message on 10 January 2024 which reads:

“Great thank you [NAME]. We will get the background checks underway and be in touch ASAP”. A rental offer was extended on Jan 11 Weekly rent: $420.00 Bond amount: $1,680.00 Tenancy start date: 15 January 2024 Tenancy end date: 14 January 2025.

Congratulations! Everything checked out, we like you and we'd like to offer you 27A. We're in the area until Sunday morning. We'd like to do the move-in inspection and sign the tenancy agreement late Sunday morning if you're free. This means we'd give you the keys a day early. Let us know what you think! [NAME]”.

8. The parties met on 11 January 2024 and entered a fixed term tenancy for a term from 15 January 2024to 14 January 2025. The tenants’ friend, [NAME], confirmed he was not with the tenants at this signing meeting and says English is not the tenants’ primary language and that they did not understand that the tenancy agreement locked them into a fixed term tenancy for a year that they could not break when their family arrived in New Zealand. Further, the tenants’ submit that the landlord should have known that English was the tenants second language and that the landlord had a legal and moral responsibility to tell the tenants this was not a “normal” tenancy and that it meant the tenants would not be free to move out until the end of the 12 month period, unless otherwise agreed

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by the parties, and the landlord could hold them liable to pay the full 12 months of rent, even if they moved out early.

9. Based on the mistaken belief the tenants were in a “normal” tenancy, the tenants wrote to the landlord on 30 April 2024 giving 21 days’ notice to vacate the premise on 10 May 2024. By “normal” they meant a periodic tenancy.

10. To their surprise, the tenants were informed by the landlord that they were liable for rent up to the date a new tenant took over the remainder of their fixed term tenancy. The tenants refuted they were legally responsible to do so and informed the landlord that they had signed up to a “normal” tenancy that they could terminate with the giving of 21 days written notice.

11. The tenants submitted they had previously only held rural tenancies in New Zealand, all of which were periodic. They say they were unaware that a tenancy could be for a fixed term and that fixed term meant that they would have to stay in that tenancy for 12 months, unless otherwise agreed by the parties to the tenancy agreement.

12. The parties could not reach agreement to reduce the fixed term tenancy, and the landlord sought to hold the tenants legally responsible for rent payments to 28 June 2024, because a new tenant did not move into the premise until 29 June 2024 and the landlord had taken reasonable steps to relet the premise.

13. The tenants paid rent to 19 May 2024, despite them having handed back the keys on 10 May 2024 as they thought that was fair, once they were informed that the statutorily required notice period for a periodic tenancy was 28 days.

14. The landlord has applied for rent arrears of $2,460.00 from 20 May 2024 to 28 June 2024 and a break lease fee of $645.42. The break lease fee is made up of the costs of advertising the premise ($218.50), viewings ($85.25), credit and reference checks for [NAME] that were shortlisted ($63.25), and an exit methamphetamine test (278.42).

How much is owed for rent?

15. The tenants claim they made a unilateral contractual mistake when they signed the fixed term tenancy agreement that they believed was periodic with no end date that they could give 21 days’ written notice to end. They submitted that the landlord was aware of their mistake and had an obligation to explain to them that signing the tenancy agreement locked them into the tenancy for 12 months. Further, they submit that the landlord knew they misunderstood this crucial aspect of the tenancy agreement, and the tenancy agreement is unenforceable.

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16. I am satisfied the evidence proves, on the balance of probabilities, the tenancy agreement was binding and enforceable and the tenancy ended on 28 June 2024, the day prior to the new tenant moving into the premise because:

a. Even if [NAME] informed the landlord, at the first viewing of the premise, the tenants were looking for accommodation for no longer than 3 to 6 months, this alleged conversation occurred prior to the negotiation phase of the contract formation process;

b. The landlord states that if [NAME] had informed him that the tenants were looking for such a short-term lease, he would not have taken them through to the application stage of the process. This is because the landlord wanted the certainty of income for a year and did not want to incur reletting fees after such a short lease period, when he could have let the premise to another party for a minimum of a 12months. I prefer the landlord’s evidence in this regard as it is an experienced landlord and would have not taken the tenants to the pre-tenancy application stage if they had made it clear they were intending to move out within 3 to 6 months;

c. When the landlord made the text-based offer to the tenants of a 12-month fixed term tenancy, with a start date of 15 January 2024 and an end date of 14 January 2025 at a weekly rental of $420.00 and payment of $1,680.00 bond, the tenants could have sought independent legal advice or advice from a friend well versed in written English. They did not. Periodic tenancies never have an end date and had they sought advice this alleged contractual mistake would have been uncovered before they went to sign the tenancy agreement (“Agreement”);

d. The tenants then agreed to meet the landlord on 11 January 2024 to sign the 12-month fixed term Agreement. If they were concerned that their English was not good enough to read and understand the Agreement before they signed it, then they could have taken an English-speaking friend with them to assist them to confirm what terms and conditions they were agreeing to before signing a binding and enforceable Agreement;

e. The landlord was under no legal obligation to give the tenants legal advice before they signed the Agreement, nor to go through the Agreement with them and explain each term in plain English just in case they had not fully understood any of the terms and conditions contained within it. Tenants are responsible to ensure they fully understand the terms and conditions set out in an Agreement before they sign it, and to seek independent advice if they are unsure prior to signing and returning it to the landlord. The tenants have not provided compelling evidence that supports their contractual mistakes- based defence. While the tenants allege, they held a reasonable belief the Agreement was periodic, and that this belief was fundamental to their decision to enter into the Agreement, they have failed to prove on the

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balance of probabilities that they had reasonable grounds for their belief. The evidence produced indicates the landlord informed the tenants the offer was for a tenancy that had a start and end date at a fixed weekly rental rate and 4 weeks bond prior to them signing the Agreement. These fundamental terms were made very clear in the 10 January 2024 text message. In addition, there is no evidence that proves the landlord knew the tenants had misunderstood the fixed term nature of the written Agreement he offered to them, especially when he had sent a succinct text message offer the day prior that had a clear start and end date and the tenants had agreed, by reply text, to take the tenancy on those fundamental terms; and

f. The tenants confirmed they were not placed under duress to sign the Agreement on 11 January 2024. The landlord also confirmed that had the tenants requested a few days to seek advice on the contents of the Agreement, he would have agreed to give them that time. In addition, he says there was no indication that the tenants did not understand enough English to be able to read and understand the terms and conditions of the tenancy being offered to them.

17. I dismiss the tenants claim that the tenancy ended on 17 May 2024. The tenants did not provide sufficient evidence to successfully defend the landlord’s claim for rent arrears to 28 June 2024, on the balance of probabilities.

18. The landlord provided rent records which prove the amount owing at the end of the tenancy.

Are the tenants responsible for break lease fees?

19. The tenants can be ordered to pay reasonable compensation for any loss or damage that has resulted from the reduction in the term of the fixed term tenancy.

20. The tenants ended the tenancy before the end of the fixed term and the landlord has proven it incurred reasonable costs of $645.42 for break lease advertising fees, viewing fees and credit check fees because of the fixed term lease being ended eight months early.

21. I have granted the landlord the compensation it has claimed for the costs it directly incurred because of the early unconsented termination of the fixed term tenancy.

22. The tenant’s stated they should not be liable for the exit inspection methamphetamine test and required the landlord to prove it had carried out and paid for a pre-tenancy methamphetamine test. The landlord proved that it had engaged a specialist to undertake this test, pre and post the tenancy, and that it had incurred a cost of $278.42 for the post tenancy testing that it would not have had to undertake, but for the tenants’ breach of the terms of the Agreement. I am satisfied the tenants should compensate the landlord for the cost of this testing.

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Reimbursement of filing fees

23. [COMPANY] has substantially succeeded with this claim, I have reimbursed the $27.00 filing fee.

24. The landlord also made a claim for reimbursement of the filing fee it paid to make application 4892025, which was heard by Adjudicator King on 5 June 2024. Application 4892025 was for termination of the tenancy for abandonment. No order was made for the filing fee, as the abandonment claim failed. Section 102(4) of the RTA provides for the Tribunal to reimburse an applicant’s filing fee only if the applicant’s claim(s) are wholly or substantially successful. The applicant application 4892025 was not successful. Its application for reimbursement of the $20.44 filing fee is therefore dismissed.

[NAME]

20 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: