Bond, insulation breaches prove costly

Thursday 23 August 2018

Neglecting to lodge tenancy bonds and insulation failures can end up being expensive for landlords as highlighted by a new Tenancy Tribunal decision.

By The Landlord

A Whanganui property management company has been ordered to pay nearly $34,500 in damages for multiple counts of failure in these areas.

MBIE’s Tenancy Compliance and Investigations Team took The Rent Centre Limited to the Tribunal for failing to lodge tenancy bonds and failing to provide tenants with insulation statements.

The team’s national manager, Steve Watson, says the most concerning thing about the case was the scale and number of breaches committed by the company.

“The fact that the team discovered 116 breaches of the Residential Tenancies Act (RTA) over a period of four years shows a massive failing in the way this business was operating.

“There is no excuse for this behaviour, the company should have known better.”

The Tribunal awarded 115 Orders of exemplary damages of $250.00 where the landlord failed to lodge the bond paid by the tenant to the Tenancy Bond Centre.

A further 33 Orders required The Rent Centre to pay $100.00 where no insulation statement was provided as a part of the tenancy agreement.

In total, the Tribunal ordered the company to pay a total $32,050 in exemplary damages as well as $2,481.24 in associated costs.

Watson says the Tribunal’s decision sends a strong message to all landlords that failing to meet minimum legal requirements is not acceptable.

“Tenants need to trust and believe that when they are dealing with a landlord, particularly a property management company that has been in business for over 20 years, that the landlord is fulfilling their legal obligations.”

The orders serve as a reminder that time is running out for landlords who have not checked to make sure that they have insulation installed in accordance with the new regulations by next July, Watson adds.

“Compliant insulation statements give tenants peace of mind when it comes to knowing the state of the insulation in their rental home when they start a tenancy.”

MBIE’s tenancy compliance team has had much greater powers to investigate and prosecute breaches of the RTA since 2016.

But it focuses on significant or ongoing breaches of the RTA which pose a significant risk to vulnerable tenants.

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