Tenant Wins Damages for Landlord's Bond Lodgement Delay

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[2025] NZTT 5120714

TENANCY TRIBUNAL AT REMOTE LOCATION | TE TARAIPIUNARA RETIHANGA

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted]

Landlord

TENANCY ADDRESS: [ADDRESS], [POSTCODE]

ORDER

1. [COMPANY] must pay [NAME] $513.50 immediately being $500.00 exemplary damages and half of the filing fee of $27.00.

2. [COMPANY] must pay $330.00 to the [COMPANY] for the tenancy at [ADDRESS], [POSTCODE] immediately.

3. [NAME] must pay [NAME] $763.50 immediately being $750.00 exemplary damages and half of the filing fee of $27.00.

4. [NAME] must pay $935.00 to the [COMPANY] for the tenancy at [ADDRESS], [POSTCODE] immediately.

Reasons:

1. The hearing was attended by all parties: [NAME] and [NAME] for [NAME].

2. The tenancy agreement was signed on 28 April 2023, and the tenancy began on 03 May 2023. At the time of the hearing the tenancy was current.

3. The tenant is [NAME].

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4. The tenancy agreement was prepared by [NAME]. The tenancy agreement names the landlord as [NAME] and [NAME]. [NAME] is named as the Property Management firm and Agent.

5. Landlord is defined in section 2 of the Residential Tenancies Act, 1986 (the “RTA”) and includes a prospective landlord, a former landlord and an agent of a landlord (not the complete list).

6. I determine that both [NAME] (and [NAME]) and [NAME] are landlords for the purposes of this application according to the definition in the RTA.

The tenant’s claim

7. [NAME] claims the landlord has not lodged the bond with the [COMPANY] within the required time.

8. A landlord has an obligation to send any bond payment to the [COMPANY] within 23 working days after the payment is received. See section 19(1) Residential Tenancies Act 1986.

9. Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. See section 19(2) and Schedule 1A Residential Tenancies Act 1986.

10. [NAME] arrived in New Zealand with his family as immigrants in 2023 and began looking for a place to live. After making several applications [NAME] was accepted for a tenancy at the above address. He completed the required documentation and forwarded the documents along with a bond of $2,200.00 and one week’s rent, $550.00 to the property manager [NAME]. Subsequently he and his family moved into the property and settled down in New Zealand.

11. By the time the above-mentioned documents and this payment were received, a dispute between [NAME] and the owner [NAME] had arisen. The two parties decided they would not continue with the property management relationship.

12. The details of the dispute between [NAME] and [NAME] are not relevant to this application. Nor are they a matter that the Tenancy Tribunal has jurisdiction to determine. However, because the nature of the relationship between [NAME] and [NAME] had changed from a management relationship to a tenant- finder relationship, [NAME] charged [NAME] $1,265.00 finder’s fee for finding a tenant for this property and another, and

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completing documentation. [NAME] were not charging a finder’s fee under the management contract.

13. [NAME] confirmed that after receiving $2,200.00 bond and $550.00 for the first week’s rent from [NAME], he deducted $1,265.00 for the finder’s fee that he calculated [NAME] owed him and then forwarded the rest ($1,485.00 made up of $935.00 remaining from the bond and $550.00 for the first week’s rent) to [NAME] with the tenancy documents and the bond lodgement form. He also sent instructions for [NAME] to change the name of the landlord on the bond lodgement form from [NAME] to her own name.

14. To prove the payments were made, [NAME] produced a bank statement showing the payment of $935.00 being paid to M. [NAME], an ownership statement showing $550.00 being deposited in [NAME]’s account, and his invoices for the finder’s fees amounting to $1,265.00 which he supplied to [NAME]. These amounts total $2,700.00 which is the amount that [NAME] paid to [NAME].

15. [NAME]’s oral evidence was that she only received $935.00 from [NAME]. She was unable to produce any documents in support of this being the case.

16. Having seen the documentary evidence in support of [NAME]’s submissions, I prefer his version of what was paid and I determine that [NAME] paid $1,485.00 to [NAME].

17. In November 2023 [NAME] paid $935.00 to the [COMPANY] in relation to this tenancy. [NAME] stated during the hearing that he was unsure why this was done but it may have been an error. A confirmation letter from the [COMPANY] was produced in support of this payment being made. This is the only money that has been lodged for this bond; [NAME] confirmed that she did not lodge any money for the bond.

18. During an inspection late in 2024, [NAME] was advised by [NAME] that he would not be getting his full bond back at the end of the tenancy because only $935.00 had been lodged. [NAME] sought advice and made his application to the Tribunal.

The landlords’ duties under section 19 RTA

19. The dispute between [NAME] and [NAME] appears to have clouded their judgement regarding their responsibilities as landlords.

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20. Section 19 of the Residential Tenancies Act, 1986 sets out the duties of a landlord on receipt of the bond.

19 Duties of landlord on receipt of bond (1) Where any person pays to the landlord, or to any other person on behalf of the

landlord, any amount by way of bond (whether the amount is for the whole or part of the bond), the following provisions shall apply: (a) the person who receives the payment shall forthwith give to the payer a

written receipt, signed by that person, showing— (i) the address of the premises to which the payment relates; and (ii) the amount and nature of the payment; and (iii) the date of the payment; and (iv) the name of the payer (if known to the person who receives the

payment): (b) the landlord shall, within 23 working days after the payment is made, forward

the amount received to the chief executive, together with a statement of particulars in the approved form.

(1A) Subsection (1) does not apply if a bond of 1 week’s rent or less is paid in respect of a boarding house tenancy. In that case, section 66D applies instead.

(2) Failure to issue a receipt, or to forward any amount received, in accordance with this section is hereby declared to be an unlawful act.

(3) A landlord who fails to comply with subsection (1) commits an infringement offence and is liable to a fine or an infringement fee specified in Schedule 1B.

21. [NAME] received the full bond from [NAME]. When they received this, they were acting as the landlord. Their legal responsibility was to lodge this full amount with the [COMPANY] within 23 days. The letter of the law does not permit a landlord to pass the bond onto another landlord in expectation that they will then lodge it with the [COMPANY], nor deduct expenses before doing so.

22. [NAME] received the balance of the bond after [NAME]’s expenses had been deducted and did not deposit this with the [COMPANY] within 23 days, or indeed at all.

23. The tenant’s claims are proved against each respondent. I find [NAME] has committed an unlawful act and I also find that [NAME] committed an unlawful act.

Exemplary damages

24. Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the

https://www.legislation.govt.nz/act/public/1986/0120/latest/whole.html#DLM3283904 https://www.legislation.govt.nz/act/public/1986/0120/latest/whole.html#LMS454331

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other party, and the public interest. See section 109(3) Residential Tenancies Act 1986.

25. Because of [NAME]’s actions, [NAME] the tenant has been the put in the position of not having his money secured with the [COMPANY]. [NAME] believed he had a claim against [NAME] and he put his own interests ahead of the tenant’s whose money he used to settle the claim.

26. Having done this however, I note that he then forwarded the balance of the monies to [NAME] explaining what he had done, and with the expectation that the full amount of the bond would then be lodged with the [COMPANY] by her.

27. The public has a right to expect landlords will act according to the law with tenant’s money. Tenants are dependent on it. This is particularly important with vulnerable tenants, such as new-immigrants who can be expected to not be familiar with New Zealand law, their rights, or how to enforce them.

28. In the circumstances I consider exemplary damages of $500.00 is an appropriate amount to award against [NAME] for breaching section 19 of the RTA.

29. [NAME] was aware of the deficit in the money she received from [NAME], and in her submissions today it appears she believed, correctly, that [NAME] did not have a right to deduct their expenses. It appears however that regarding her dispute with [NAME], she sat on her hands and did not choose to resolve the dispute so that she could pay the full bond into the [COMPANY], whether the deficit came from her pocket or his.

30. [NAME] may have believed the dispute with [NAME] was resolved, [NAME] by her action of not making up the $1,265.00 deficit, demonstrated that she knew it was not.

31. More than this however, for the next 18 months, and up to and including the present time, [NAME] has not deposited any of the tenant’s money with the [COMPANY]. [NAME] may have believed that the bond had been lodged, [NAME] could not have been under any such illusions.

For these reasons I find that [NAME]’s level of culpability in breaching section 19 of the RTA is higher than [NAME]’s culpability. Because of this I award a larger amount of exemplary damages, $750.00 in total, against [NAME] for her breach of section 19 of the RTA.

32. [NAME] deducted $1,265.00 from the bond for payment of the fees they claimed against [NAME]. Because they

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subsequently paid $935.00 to the [COMPANY], they still retain $330.00 of the tenant’s bond money. This must be paid into the [COMPANY].

33. [NAME] received $1,485.00 from [NAME]. $550.00 of this was for the first week’s rent and $935.00 was for a portion of the bond. This bond portion must be paid into the [COMPANY].

Filing fee reimbursement

34. [NAME] has wholly succeeded in his claims against the landlords, I order reimbursement of the filing fee.

C Lamdin

06 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.

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].