Huge rent refund for Illegal ‘smoko shed’ conversion

A tenant who was rented an uninhabitable Swanson “smoko and social shed” as his home for a decade has been awarded $25,876 - 40% of the rent he paid over six years - after the Tenancy Tribunal found the property to be unlawful residential premises.

Thursday, July 28th 2022

The Swanson Road shed had been bought by the Jack Lane and Gilbert Lane Family Trusts about 1992-1993 and was used as an office or smoko room for the landlords’ business next door. It was also described as the social club used for staff shelter and recreation.

Neil Flavell began renting the one-bedroom property with a kitchen and bathroom in May 2012, paying $230 a week rent and a bond of $460, which was not lodged with the Bond Centre. 

At the hearing the landlords claimed it was never intended for the premises to be residential, but there was some evidence there had been an earlier tenant. The tribunal ordered the landlords to produce Auckland Council documentation establishing whether the premises were a lawful residential tenancy.

The landlords say they made inquiries with Auckland Council but were advised the records were no longer available due to a fire. No evidence was produced to establish any records were lost in a fire and the landlords did not provide any evidence to establish the premises were lawful residential premises.

Flavell says the premises were not a healthy home and whenever he asked for repairs to be carried out the landlords told him the rent would be put up.

He produced photographs showing a basic shed like building with numerous defects. They included gaps in several of the walls and the ceiling where the outside is clearly visible, a gap in the front door, rotten window frames, damaged, mouldy ceilings due to leaks and spouting not connected.

Many of the windows were nailed shut and there were bars on the kitchen window limiting the amount of ventilation in the premises. Underneath of the house had been flooded with sewerage.

A report Flavell obtained MG Builders on the state of the premises concluded the house had been neglected for so long and caused such extensive damage that it has passed way beyond the point of being viable or cost effective to remedy the issues. “The building should have been condemned a long time ago, as it is definitely not suitable to be inhabited. It is a cold, uninsulated, damp mouldy house.”

However, the landlords disputed this and claimed the building was sound and had always been well maintained. They obtained a report from MSLBOP saying a heat pump and underfloor insulation was installed in July last year, there were a number of repairs to be done around the building but the roof was in generally good condition and did not need replacement.

Tribunal adjudicator N Walker found the report to be poorly researched and a number of statements not factual.

To make the shed lawful residential premises, the tribunal says the landlords needed to give notice to the council of a change in the use of the building and receive consent. “The landlord’s failure to notify the council and obtain consent to change the use of the building is a breach of the Building Act and Building Code and therefore a breach of section 45 (1)(c) RTA. I am satisfied that as the landlord changed the use of the property; that the premises were unable to be lawfully occupied for residential purposes,” says Walker.

“This situation involved the comfort, health and safety of the tenant. I am satisfied it is appropriate that a substantial reduction in rent should be made. I consider it just to award a rent refund of 40% of the $$64,690 paid over six years – the only length of time the tribunal could take into account.

Flavell was also awarded exemplary damages of $200 for the bond not being lodged, but claims relating to unlawful entry and altering the rent book were dismissed. The landlords’ claims for rent arrears, compensation for plumbing costs and compensation for costs to prepare and defend the Tenancy Tribunal claims were dismissed.


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