COMMENT: Getting to grips with tenancy disputes

Widespread ignorance of tenancy law is behind current representations of residential tenancy disputes which feature tenants as victims, writes Auckland Property Investors Association vice president Peter Lewis…

Monday, October 7th 2019, 2:21PM 2 Comments

Tenant advocates frequently claim that private-sector residential tenants are powerless pawns in the hands of greedy, uncaring landlords. They claim that when a tenant makes a request for their landlord to fix something on the property that they are entitled to have fixed, the landlord either ignores them or terminates the tenancy in retaliation.

Some tenants have highlighted their plight through the media, creating a victim mentality among many others. As the rental shortage increases, our industry has come under intense scrutiny from those in the media as they lap up stories from tenant advocate groups and individual tenants.

Journalists constantly seek news stories and search through Tenancy Tribunal orders, looking for shock-horror stories which lead to more and more tenants being portrayed as victims of an unfair system.

I believe these claims exist because of the widespread ignorance of tenancy law and the relative powers of both landlord and tenant.

As part of my involvement with the Citizens Advice Bureau (CAB) I present talks on renting to groups of tenants and also to CAB volunteers. When I discuss the steps of the dispute resolution process I invariably encounter blank astonishment.

Few have heard of the correct dispute settlement process, and even fewer realise that it applies to the disputes tenants may have with landlords as well as disputes landlords have with tenants.

All residential tenancies within New Zealand are governed by the Residential Tenancies Act and this Act applies to all residential letting with very few exceptions. The Act has been in existence since 1986 and neither landlord nor tenant are able to contract out of this Act.

Within this Act, there is laid out a specific and workable sequence for the resolution of tenancy disputes.

Obviously, the first step in any resolution would be to contact the other party to discuss the problem. This may solve the issue quickly without any further action being required.

If there is no acceptable outcome then the tenant should serve a 14-Day Notice on the landlord. The 14-Day Notice is a legal notice to comply, and a tenant can issue a 14-Day Notice to the landlord or property manager if they think that these people are not keeping their obligations under either the Act or the Tenancy Agreement.

This Notice is a legal demand and is an essential step in the process. Yet I have found that very few tenants are aware of its existence. There is a template for the 14-day notice on the Tenancy services website.

There is an important distinction between the owner of the rental property and the landlord. For self-managing landlords, the owners and the landlord will be the same individual. However, where the owner of the property passes the selection of the tenants, the signing of the Tenancy Agreement and the day-to-day management of the property, the landlord may well be the property manager. I

It is important that the 14 Day notice is delivered to the correct person. Where the property owner lives out of the country or is away for more than 21 days they are required to appoint someone who is resident as their manager of that property, and the tenant must be advised of this.

If the landlord does not comply within that 14 day time then the tenant can move on to a claim at the Tenancy Tribunal.

The Tenancy Tribunal is a specialist court that can award compensation or order repairs up to a value of $50,000. It’s faster than going to a normal court. It’s also a lot cheaper – the application fee is $20.44

The Order that is issued may include the requirement to repair, maintain or upgrade the rental property, and possibly a money order that requires the landlord to pay restitution or damages.

When I lay out this sequence in front of tenants I normally get one of two reactions. Either they say “If I do that the landlord will evict me” or “If I demand this then the landlord will put the rent up”.

However, it is an unlawful act for a landlord to end a tenancy in retaliation for a tenant exercising a right under the tenancy agreement, the relevant law, or by making a complaint relating to the tenancy. This is called a ‘retaliatory notice’ under the RTA.

Tenants who take direct action against landlords are able to challenge an alleged retaliatory notice up to 28 working days after it has been issued. On the tenant’s application, the Tribunal can overturn a landlord’s notice to end a tenancy if they believe that the landlord gave the notice as a consequence of actions taken by the tenant in exercising their rights.

Thus there is no reason for a tenant to fear termination of the tenancy when asking the landlord for the property to be maintained in good condition.

In many cases that I see, the tenant admits that they are paying a rent well below market levels. In this case, their fear that improvements to the property will result in a rent increase may be well founded.

However, if they decide not to pursue their claim on these grounds, what they are really saying is “I’d sooner have cheap and nasty rather than good at reasonable cost”. That may be their choice, but then they actually have no grounds for complaint. By paying cheap they get cheap.

So when we hear calls for strengthening the laws around tenancy issues and for imposing increasingly draconian requirements on landlords, perhaps the real question we should be asking is “How do we educate our tenants about the powers they already have and how to use them?”

It is pointless bringing in more draconian and tenant-friendly legislation when the existing laws are actually fit for purpose.

Perhaps the time and resources employed in discussing the proposed strengthening of the legislation could be more usefully spent on boosting tenant education.

NOTE: As well as his CAB presentations, Peter Lewis has also presented talks to several tenant migrant groups on these topics. Also, there are some existing tenant education programmes like the “Ready to Rent” program which is run in Hawkes Bay and Palmerston North.

Tags: disputes healthy homes investment landlords property investment property management rental market tenancy reform Tenancy Tribunal tenants