What happens when a rental property does not comply with law

If your rental property has been altered since it was originally designed you are legally responsible for making sure the work meets NZ standards. Additionally, if your agent acts in error during a tenancy you may be liable for any judgement costs or awards.

A recent decision by the Tenancy Tribunal underlines the importance of making sure your property is fit for purpose and that your propertymanager is knowledgeable about current legislation. If either of you fail to ensure that your property is compliant, or if legal requirements around managing the tenancy are not followed, you may be fully liable for any costs that arise from any breach of the law. 

To be compliant with the Residential Tenancies Act 1986 (Section 45 1C) a residential rental property must comply with all current legislation around health and safety. One aspect of this legal requirement is to ensure that any building work or changes in use of any building (or part of the building) comply with the New Zealand Building Code.

Building work

If your property has had building work to alter any structure, function or habitable space you must investigate whether the work requires consent with your local authority. If so then you must ensure the work holds a Certificate of Code Compliance (CCC), or is granted a retrospective Certificate of Acceptance (CoA). If you believe the work was carried out pre-1992 then you should obtain a report from a qualified building certifier as evidence that there are no safety or sanitary issues.

Mismanagement of tenancy

Additional monetary judgements were ordered due to errors that a professional property management company should not allow to be made: failure to give correct notice, unreasonable charges for rubbish removal, incorrect charging of final rent, deceptive behavior regarding the bond refund form.

Summary of Dispute

Facts: The premises were a converted garage attached to a larger home. The Tenant lived in the premises for approximately three and a half months. He was concerned throughout his short tenancy about issues of dampness and mould and claimed for a full refund of rent after becoming aware the garage did not have consent for a habitable dwelling.

The Tenant also alleged the Landlord gave a 42-days’ notice to end the tenancy when in the circumstances, the correct notice period should have been 90-days.

Decision: The Tribunal ordered a partial rent refund after applying the 2017 District Court decision Inglis v Parry and finding, in this case, that there was a tenant-and-landlord relationship which brought the claim within the Tribunal’s jurisdiction.

In ordering the partial rent refund, the Tribunal acknowledged the newly renovated interior but noted issues with the premises including some walls were not appropriately firewalled, and there was only one window, which likely contributed to the mould issue.

The Tribunal found the Landlord should have given a 90-day notice to vacate rather than a 42-day notice. A 42-day notice can be given if the Landlord requires the premises as a principal place of residence for themselves or a member of their family. The intended occupation must be a reasonable certainty and not just a possibility.

You can read the full decision here:

LANDLORD ORDERED TO PAY COSTS FOR UNCONSENTED PREMISES AND INVALID 42–DAYS' NOTICE

Our advice

(1)    if your property has been altered from its original design in any way you should check whether a CCC was granted and if not then apply for a CoA before allowing a tenancy to commence

(2)    engage a property management company that is aware of legislation and knows how to protect their owners from tenancy disputes by complying with all relevant legislation.

If you have any comments or queries please feel welcome to contact us.