Order of the Tenancy Tribunal Residential Tenancies Act 1986 Office of the Tenancy Tribunal Tenancy Tribunal at Hamilton Tenancy Address 194a Cambridge Road, Hillcrest, Hamilton 3216 Applicant Full Name Jignesh Mahesh Parson Matthew Robert Konz Thomas Paul Robertson Tenant Tenant Tenant Respondents Full Name Roderick Kenneth Goudie Susan Claire Goudie Landlord Landlord Order of the Tribunal The Tribunal hereby orders: The Tribunal hereby orders: 1. The tenants are credited with one weeks over paid rent ($440.00) which shall be taken into account in the below calcuation table. (Section 77 Residential Tenancies Act 1986) 2. Jignesh Parson, Matthew Konz and Thomas Robertson to pay Roderick Goudie and Susan Goudie the sum of $0.00 immediately calculated as follows:
Costs to be paid to Landlord: Cleaning $167.99 Oven tray replacement $44.00 Curtain replacement $254.69 Carpet replacement $669.00 Garden work $100.00 Door repairs $63.25 Wallpapering $110.00 Nett curtain was han dreplacement $87.00 Electrical fittings replacement $8.00 Filing fee reimbursement $20.44 Total Landlords compensation $1,524.37 minus Tenants rent credit $440.00 minus Tenants bond apportionment $1084.37 Amount payable by Tenant to Landlord $0.00 (Sections 77(2)(k) and 78(1)(d) Residential Tenancies Act 1986) 3. The Bond Centre to pay the bond of $1,680.00 (5671013-005) apportioned as follows: Roderick Goudie and Susan Goudie $1,084.37 Jignesh Parson, Matthew Konz and Thomas Robertson $595.63 (Sections 22 and 127(4)(a) Residential Tenancies Act 1986) 4. Jignesh Parson, Matthew Konz and Thomas Robertson to pay Roderick Goudie and Susan Goudie the sum of $20.44, being the filing fee paid on this application. (included above) (Section 102(4)(a)(b) Residential Tenancies Act 1986) Reasons. 1. 2. 3. 4. 5. This is a claim by the tenants for the return of their bond as well as reimbursement of 1 weeks over paid rent. The landlord accepts the overpayment occurred and is prepared to credit the rent against any compensation awarded. The landlord has filed a cross application seeking compensation for exit costs and damage to the premises. The landlord seeks to offset those claims against the bond held. Nature of a Bond. The bond is the tenant s money. It is paid as a surety for performance of the obligations under the tenancy. The bond money is seen as the tenant property until there is agreement to the
6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. contrary between the parties or the tribunal makes an order as to its disposal in any case it is the landlord who is seen as the applicant. This is because the tenants in any tenant driven application are simply applying for their money back. The onus is on the landlord to prove that the bond should be returned to them and this will require some proof of loss or damage as a result of the tenant s breach of the agreement. As the bond is security for the observance and performance of the tenant s obligations under the tenancy agreement and the act it is accepted that there are circumstances where a landlord can claim the bond. The landlord is entitled to make a claim on it to the extent that they have suffered loss as a result of the tenant s failure to observe and perform obligations as a tenant. Such loss or damage can include exit costs such as general and carpet cleaning, garden work and rubbish removal and some damages. Undisputed claims. The majority of the items claimed by the landlord were discussed and accepted by the tenants. Where that occurred, no further analysis needs to take place. There were however a number of items where liability was denied or further rulings were sought from the Tribunal as both parties were unsure as to where the liability or the quantum of it lay. Tenant s obligations. Reasonably clean and tidy. The tenant has an obligation under the Act to leave the premises upon vacating in a reasonable clean and tidy condition. A tenant s obligation pursuant to the Act is to leave a property in a reasonably clean and tidy condition does not mean that it will necessarily be pristine or up to the standard that a landlord might consider suitable for a new tenant to immediately move in to. It is a mistake for landlords to confuse the two matters. The obligation to leave the premises at the conclusion of a tenancy reasonably clean and tidy condition does not give rise to an absolute standard. The test of whether a property has been left in a reasonably clean and tidy condition is an objective one and not to be based on the subjective opinion of either the landlord or tenant. That standard is to be determined by reference to the age and condition of the premises and in particular the standard they were in at the start of the tenancy. This condition can often be established by reference to the Tenancy Agreement itself or a pre-inspection report. There was one available in this case which established a reasonably good standard when the tenants moved in. The age of the premises, being relatively new, was established and agreed to. I did gain the impression that the landlord has a certain high standard (which is not to be taken as a criticism) that she was imposing on the tenant which may have been greater than an objective one in relation to the existing condition of the premises. That high standard clearly came from her own pride in the premises, which is not a bad thing. A tenant is entitled to live in the premises they are renting. That use can be best described as a robust occupation. The tenants correctly pointed this standard out at the hearing. Landlords must expect some wear and tear or additional cleaning and should factor into their rental
17. 18. 19. 20. 21. 22. 23. 24. 25. 26. charge an allowance for such repair or additional cleaning work at the end of tenancy. Where a tenant vacates a property and the landlord has to do cleaning or remedial work this does not in itself make the tenant responsible for those costs. The tenant argued they had cleaned as best they could and to the standard required under the Act. The main issue in relation to cleaning was the presence of mould which had badly damaged the curtains and walls in two of the bedrooms Photographic evidence was provided by the landlords showing considerable mould growth on the curtains and walls. Once mould becomes ingrained it is virtually impossible to remove by cleaning and replacement is required. The tenants dispute their liability for the damage caused by the mould. Mould and mildew. The question of who causes and who pays for the cleaning of mildew and mould often arises in humid areas. Mould and mildew are both types of fungi that are commonly found in the home. They thrive in moist environments, spread easily, and live on various surfaces which makes them very difficult to get rid of. If left unattended, however, the harmful microorganisms can quickly affect large areas of the property and may even result in health problems and structural damage. Mildew and Mould are primitive forms of fungal growth which grow from spores that abound everywhere It will grow in any home where humidity remains high but will have difficulty surviving in one of low humidity If there is no moisture available mildew cannot grow. There are two ways to reduce humidity by heating and ventilation, constant ventilation is the most basic requirement. Premises must be able to be used and lived in a normal responsible way without mould developing. The tenants quite correctly pointed out they are entitled to live in the premises in the normal course of occupancy, if they cannot so live without mould developing then it is the landlord s problem. The landlord is required to provide premises that are not mould prone. If the premises have an inherent problem such as bad construction or water lying under the premises the landlord has a responsibility to remedy the default. It is irrelevant that the tenant has notice of such deficiencies either at the commencement of the tenancy or during its continuance. In this instance evidence was given that the house is situated in Hillcrest an elevated area in Hamilton and is of a modern Jennian construction. Due to its construction, it is fully insulated with blown rock wool insulation. The house is suitable positioned for the sun and wind both relevant factors for the prevention of mould. A tenant must tell the landlord where there is a mould problem so that necessary action can be taken. The landlord must provide the tenant with the necessary means to heat and air the premises. It may be appropriate for fans and dehumidifiers to be provided. If the tenants fail to ventilate and heat appropriately when heating and ventilation is available then it is the tenant s problem. Devices should be fitted to windows so they can be left open and also secure this is especially so if the tenants are away during the daytime as tenants should not be required to leave the premises unsecure in order to ventilate them.
27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. The landlords evidence was that electric heaters were provided and all windows were fitted with side ventilation louvres. The landlord had also gone to great lengths (including a clause in the tenancy agreement) to explain that gas heaters were not appropriate. The tenants were adamant that they constantly ventilated the house however that is inconsistent with the amount of mould damage shown. Part of the problem seems to have stemmed from the tenants drying their clothes inside which is known to create moisture. The tenant did have both a work-related and security reason for doing this however the additional moisture build up is more than likely the cause of the mould. The landlords evidence, which I find plausible, is that they have not previously or since had any issues with mould and that therefore the tenants lifestyle (closed curtains reducing sunlight and ventilation) in effect caused the damage. On the balance of probabilities, being the standard of proof required, I find that the landlords did provide the necessary heating and ventilation to prevent the mould problem arising and that the mould issue therefore becomes the tenant s responsibility and that they are liable for any damages caused by a failure to rectify. On the evidence provided however I conclude that the property was not left reasonably clean and tidy and therefore the tenants are liable for the cleaning costs and compensation for damage to the fixtures and fittings. Betterment and Depreciation. When awarding compensation, the Tribunal must take into account what is termed betterment or depreciation. To satisfy the rules applicable to betterment consideration needs to be given to both the quality and state of the item at the beginning of the tenancy and also its life expectancy. To assess depreciation the Tribunal applies a schedule provided by the Inland Revenue Department. That schedule provides a rough guideline as to the life expectancy of an item. If damage is established then any replacement cost is factored against the depreciation schedule and an appropriate award is made. The reason for this is that the award should only place the landlord back in the same position as he was at the commencement of the tenancy and not in a better position. The tenanted property is relatively new. The parties accepted that the carpet was around 5 years old at the commencement of the tenancy. The tenancy lasted for a further 2 year period with further deterioration, due to fair wear and tear, to be expected during that time period. The landlord claimed that the tenant had badly stained some areas probably by invitees of the tenants over-indulging at a party. Whilst the landlord complained that parties were expressly prohibited in the tenancy agreement I do find that a robust occupation must be viewed realistically. The IRD schedule shows carpet as having a life expectancy of between 15-20 years depending on quality. As the carpet is I assume of a medium rental quality and 5-7 years old normally a 66 % factor would be applied be applied to its replacement cost. In this case the landlords, to their considerable kudos, are only seeking a 50% contribution so I am content to award that sum.
40. 41. 42. 43. 45. Similarly, the claim for wallpapering is affected as most landlords must expect to refurbish every 7/8 years. The landlord admitted the wallpaper was around 5 years old and accordingly a 75% depreciation will be applied to this claim. That depreciation assessment is against the actual full replacement cost not the already reduced claim so a further 25% deduction allowance will be applied to the amount claimed by the landlord. Landlords other claims. The landlord had additional claims in relation to damage to the premises however these related to items like a damaged benchtop and torn vinyl flooring for which the landlord held insurance. The landlord confirmed the insurance covered the particular peril but advised that due to the high excess on each individual claim it was not commercial for them to claim against the policy. 44. Pursuant to the recent decision in Holler and Rouse vs Osaki [2016] NZCA. case however the Court of Appeal has ruled that a tenant is exonerated from liability for any peril that the landlord is insured for. That exoneration goes so far as to cover any claim for excess as well. Whilst this ruling is the subject of an amendment bill currently being considered by parliament the amendment has not yet been enacted as law and I can only apply the law as it is applicable at the date of the hearing. The landlord s other claims in relation to damage are dismissed. 1. [specify TEXT] (Section XX Residential Tenancies Act 1986) Reasons: