Bonds failure costs landlord nearly $40k

Landlords are being warned not to overlook lodging bonds as a new Tenancy Tribunal ruling shows that failure to do so can cost tens of thousands.

Thursday, September 14th 2017, 10:45AM

by Miriam Bell

An Invercargill landlord has been ordered to pay a total of $38,713.76 in exemplary damages and costs for failing to lodge bonds.

Under the Residential Tenancies Act (RTA) landlords have to lodge any bond monies with Tenancy Services within 23 working days of receipt.

But the Tribunal has just found that Murray Baird, who is the sole director of Strathvale Investments Limited (SIL), received bond monies from tenants for 54 separate tenancies and did not forward it to Tenancy Services’ Bond Centre as required.

Alongside the $38,713.76 awarded by the Tribunal, SIL is restrained from committing further similar breaches of the RTA for five years.

The MBIE Tenancy Compliance and Investigations Team was prompted to investigate Baird after a complaint from a tenant who didn’t receive a bond lodgment receipt for a property rented to them by Baird.

The investigation found non-compliance with the bond requirements of the RTA across Baird’s entire portfolio of residential properties and this led MBIE to apply to the Tenancy Tribunal.

MBIE’s tenancy compliance team manager Steve Watson said the proper handling of bonds is an integral part of maintaining trust in the tenancy system, as well as ensuring the rights of tenants are protected.

“Mr Baird’s actions broke that trust 54 times for personal gain, and his repeated and persistent breach of the RTA is unacceptable and reflected in the high damages cost awarded,

“As a result of securing this order, should Mr Baird be found doing this again we will not hesitate in pursuing criminal charges in the District Court.”

MBIE’s tenancy compliance team was given much greater powers in the July 2016 amendments to the RTA, which also made smoke alarms and insulation compulsory in rental properties.

It can now investigate substandard rental properties which run foul of housing obligations under the RTA – even if it has not received a complaint from a tenant.

That means it now runs a “targeted risk basked audit programme”, as well as responding to complaints.

The MBIE team also now has more power to prosecute landlords for beaches of the RTA.

To date, the MBIE team has secured a number of Tribunal rulings against landlords for such things as renting out an unlawfully converted garage and illegally renting out office space to residential tenants.

Watson said Baird’s case is another powerful example of how they are using these powers to ensure landlords who seriously breach basic housing standards are held to account.

“This decision should send a strong message to landlords that there is no excuse for not complying with tenancy law, and the penalties for not doing so are high.”

Read more:

Landlords on notice - MBIE

Tenancy services takes on enforcer role

« No winners from tenancy law tinkering

Rents surge for urban living options »

Special Offers