Collection costs

Question from Amy updated on 28th November 2017:

We had a tenant who did not fulfill their tenancy obligations and after three rounds of Tribunal hearings (he did not attend the first one so it was adjourned, second one he attended but further info was required, third one he did not attend) - the Adjudicator ruled in our favour.

I wrote to Tenancy.co.nz and Baycorp to ask who would be responsible for the fees (they both charge commission of 25% + GST). Tenancy wrote back to me to say that their fees can be added to ex-tenant's sum owed to us - they said this is because there is a clause in the tenancy agreement that says it can be added. However, Baycorp wrote back to say that the Adjudicator's order supercedes the tenancy agreement which means that WE would be responsible for the fees, not the ex-Tenant.

So as you can see - we're very confused as to which direction to follow given that both are reputable and large firms.

Our expert Jennifer Sykes responded:

Under the Residential Tenancies Act, the Tenancy Tribunal can grant the recovery of collection costs if there is already a clause outlined in the tenancy agreement allowing for this. This process is detailed in Section 102(5) of the Act.

Another enforcement option is to take the Tenancy Tribunal Order to Collections - Ministry of Justice, as they can enforce civil debts such as Tenancy Tribunal Orders. Any fees you pay for this type of enforcement can be recovered from the person owing the debt and are added to the amount they owe.

Information on the enforcing orders through the Ministry of Justice can be found here: https://www.tenancy.govt.nz/disputes/enforcing-decisions/enforcing-orders-from-the-tribunal/. For more on the rights and responsibilities of landlords and tenants, go to www.tenancy.govt.nz.

The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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