Tenant's Claim for Unlawful Premises Dismissed

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[2025] NZTT 5096308

TENANCY TRIBUNAL AT DUNEDIN | TE TARAIPIUNARA RETIHANGA KI ŌTEPOTI

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted]

Landlord

TENANCY ADDRESS: [ADDRESS], Teviot, RD 2, Roxburgh 9572, Onslow Downs

ORDER

1. By way of declaration the premises at [ADDRESS], Roxburgh are not unlawful residential premises.

2. The application by [NAME] for compensation of $8,260.00 is dismissed.

Reasons:

1. Both parties attended the hearing, the tenant with her lawyer [NAME].

2. The tenant seeks a refund of rent of $7,460.00 and compensation for firewood of $800.00 on the basis that the premises were unlawful residential premises.

3. The tenancy was a periodic tenancy which began on 14/7/2023 at a rental of $295.00 per week for fully furnished premises.

4. The tenancy ended somewhere between 13/1/2024 and 26/1/2024.

5. There have been five Tenancy Tribunal Orders between the parties for this tenancy by three different adjudicators between December 2023 and August 2024 and a case conference minute by another adjudicator in November 2023.

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6. The issue in this application is whether the premises are an unlawful residential premise.

Was the property an unlawful residential tenancy?

7. [NAME] submitted that the issue is whether the premises occupied by the tenant, and know as the stables, which was converted to a dwelling in 1995 had building consent as a studio but not consent for change of use.

8. In support of the claim [NAME] provided a letter from the Central Otago District Council dated 19/8/2024 with a summary of the five building consents issued and one resource consent with plans and specifications.

9. While agreeing that the consent dated 30/11/1994 was a building consent [NAME] argued because there was no consent for the change of use the premises were unlawful.

10. On the other hand, the landlord submitted that she believed the property was fully consented for letting as a residential tenancy and had been so at the time of purchase in 2021.

11. In February 2023 the landlord confirmed she had written to the Central Otago District Council and received advice that there was “no reason you could not use this as travellers accommodation”.

12. Subsequent to the tenant raising the issue the landlord submitted that the Central Otago District Council had on 27/1/2025 issued a retrospective consent to use the premises for residential use and traveller accommodation.

13. The landlord did not believe the” tenant had suffered any harm or loss as a result of any technical consenting non-compliance”.

14. Although the landlord’s lawyer, [NAME] attempted to counterclaim for costs in submissions provided the day before the hearing, the Tribunal declined to hear the counterclaim because no application was filed under section 86.

Law

15. There is extensive jurisprudence as to what constitutes an unlawful residential premise.

16. Section 77(2)(ac) sets out that the Tribunal has jurisdiction to determine whether any premises are, or were at any material time, unlawful residential tenancies as defined in section 78A(2)

17. Under section 78A(2) “unlawful residential premises” are defined as residential premises that are used for occupation for a person for a place of residence but:

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a. that cannot lawfully be occupied for residential purposes by that person (whether generally or whether for the particular residential purposes for which that person is granted occupation); and

b. where the landlord’s failure to comply with the landlord’s obligations under section 36 or 45(1)(c)… has caused the occupation by that person to be unlawful or has contributed to that unlawful occupation.

18. Under section 36 a landlord must take all reasonable steps to ensure at the beginning of the tenancy there is no legal impediment to occupation of the premises by the tenant.

19. Section 45(1)(c) provides, among other matters, that a landlord must comply with all requirements in respect of buildings, health, and safety under any enactment applying to the premises.

20. Residential premises are defined in section 2 as any premises used or intended for occupation by any person as a place of residence, whether or not that occupation or intended occupation for residential purposes is or would be unlawful.

21. The definition of premises includes, among other things, any part of any premises.

Discussion

22. When considering unlawful residential premises, the question is whether the premises can be lawfully occupied either generally or for a particular residential purpose for which the tenant occupied it.

23. In addition, the Tribunal must look at whether the landlord failed to comply with sections 36 or 45(1)(c) which caused or contributed to the unlawfulness of occupation.

24. In cases where the Local Authority has advised that the whole premises, not just part, had not been consented for residential purposes the Tribunal has found the premises were unlawful residential tenancies. These premises, such as converted garages or sleepouts were self-contained and exclusively the subject of a tenancy agreement and were unlawful residential premises.

25. Section 40 of the Building Act 2004 provides that a household unit, being a building intended for residential occupation, must have a building consent and be certified as being compliant by having a code compliance certificate.

26. If there is only a building consent, then the premises are an unlawful residential premises.

27. Under section 114 of the Building Act 2004 an owner of premises must give notice of change of use of a building and failure to do so is an offence.

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28. Section 115 of the Building Act 2004 provides-

a. in a case where the change involves the incorporation in the building of 1 or more household units where household units did not exist before, unless the territorial authority gives the owner written notice that the territorial authority is satisfied, on reasonable grounds, that the building, in its new use, will comply, as nearly as is reasonably practicable, with the building code in all respects; and b. in any other case, unless the territorial authority gives the owner written notice that the territorial authority is satisfied, on reasonable grounds, that the building, in its new use,— i. will comply, as nearly as is reasonably practicable, with every provision of the building code that relates to the following: (A) means of escape from fire, protection of other property, sanitary facilities, structural performance, and fire-rating performance: (B) access and facilities for persons with disabilities (if this is a requirement under section 118); and ii. will,— (A) if it complied with the other provisions of the building code immediately before the change of use, continue to comply with those provisions; or (B) if it did not comply with the other provisions of the building code

b. immediately before the change of use, continue to comply at least to the same extent as it did then comply.

29. To decide if there has been a change of use in a building the Buildings (Specified Systems, Change the Use, Earthquake-prone Buildings) Regulations 2005 (‘the regulations”) must be considered.

30. Change of use in the regulations is defined as to change the use determined under regulation 6 of all or part of a building from an old use to a new use, with the result that the requirements for compliance with the building code are additional to or more onerous for the new use than the old.

31. Regulation 6 states that every building or part of a building has a use as specified in schedule 2.

32. The Resource Management Act 1991 sets expectations around how communities interact with their environment. Councils are required to prepare plans to manage activities in their regions to identify, avoid, remedy or mitigate the adverse effects of those activities on the environment.

33. Generally, zone rules provide for the number of dwellings allowed on each property. A land use resource consent is required if an owner wishes to deviate from a particular zone.

34. In a rural area, such as where this property is situated discharge and water permits may also be needed.

35. The public policy behind section 78A was to discourage landlords from renting out properties that were unconsented or unlawful and had therefore never been subject to meeting the legal requirements to ensure their safe and healthy occupation by tenants.

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36. It was not aimed at a regulatory failure of a premise that is otherwise a lawful residential premise.

37. However, this does not mean a landlord can escape liability for renting unconsented premises. Rather this failure is covered by sections 45 and 36.

38. In tenanting a property that cannot be lawfully occupied for residential purposes a landlord is not only profiting from illegal conduct but is potentially placing a tenant’s health and safety at risk.

39. However, this is not the case here and I do not consider the possible lack of a resource consent was a lawful impediment to the tenant occupying the premises.

40. The building consent was for internal alterations to an existing dwelling for which a code compliance certificate was issued on 3/5/1995.

41. This means the only way in which it would have been unlawful for the landlord to allow the tenant to live in the premises would be for her occupation to breach some other form of regulatory restriction.

42. [NAME] suggested this restriction was the lack of resource consent for change of use.

43. However, while the information from the Central Otago District Council supports that in 2011 the enquiry about a change of use was not followed through, in 2023 advice was provided by the Council that the premises could be used for “travellers accommodation”.

44. From the records of the Central Otago District Council, which are somewhat difficult to interpret, it is implicit that when the building consent was applied for in 2010 for a new dwelling on the property, the Council knew about the existing premises and raised no resource consent issues.

45. When building consent was issued on 15/12/2022 for installation of a second hand free standing fire and the code compliance issued on 11/4/2024 the “current, lawfully established use” was recorded as studio.

46. Resource consent was issued on 3/11/2009 for subdivision of the land on which the premises are situated for a dwelling surplus to the requirements of a permitted activity in the Rural Resource Area.

47. Land use consent had previously been notified on 15/9/2009 to construct an additional residential activity on one lot of the subdivision and breach access standards for arterial roads.

Decision

48. I find, based on the Central Otago District Council records there was no legal impediment to the tenant occupying the premises for residential purposes and no failure to comply with the requirements of buildings, health and safety.

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49. I am persuaded that it is more likely than not building consent and resource consent for the premises were both obtained before this tenancy began.

50. The claim by the tenant that the premises are an unlawful residential tenancy fails.

51. However, if I am wrong and no resource consent was in fact issued, I still do not consider compensation or refund of rent would be available to the tenant.

52. When the Tribunal declares residential premises are unlawful it may order the return of all rent paid by a tenant, although it may deduct an amount from that sum if in the special circumstances of the case it would be fair to do so.

53. I consider there would be special circumstances in this case not to refund any rent because of the previous decisions of the Tribunal about the arrears, compensation, and the state of the premises, which all found in favour of the landlord.

54. No filing fee is awarded because the tenant was unsuccessful.

55. For the same reason suppression cannot be granted to the tenant pursuant to section 95A.

[NAME]

19 March 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.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].

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/

Reasons: