Market rent dispute

Anna asks:
(updated on Thursday, October 30th 2014)

Just wondering if anyone has any previous experience with section 25 of the Residential Tenancies Act regarding market rent? I am being taken to the Tenancy Tribunal next week. My tenant (a law lecturer) responded to my advert of $550 per week. Then viewed the property and subsequently a tenancy agreement was signed for $550. She is now asking the Tribunal for an independent rent review claiming $450 to $475 is market rental. Her evidence is from searching on Trade Me which produces a list of properties with only one bathroom, single garage, no pets (she has a cat) etc and Ministry of Business, Innovation and Employment (MBIE) figures. I have a rent appraisal at $550 to $600. The mirror property is $550 signed six weeks prior to her tenancy. The previous tenancy was $570. Because MBIE figures show a two-bedroom house at $495 (upper quartile) she wants the rent reviewed. Is anyone aware of previous decisions from the Tribunal that I can refer to? Any legal adviser recommendations for Christchurch?

Our Experts Answer:

Under the Residential Tenancies Act 1986 (the Act), market rent is described as the rent that, without regard to the personal circumstances of the landlord or the tenant, a willing landlord and willing tenant might reasonably expect to receive and pay for the tenancy, taking into consideration the general levels of rents for comparable tenancies of comparable premises in the locality or in similar localities and such other matters as the Tribunal considers relevant.

Information you may choose to take to the Tribunal hearing in response to the tenants claim may include a ‘professional’ rent appraisal, previous rental records, advertised rentals that support your case and any other information you consider relevant or that could be of use to the Tenancy Tribunal Adjudicator in assessing the market rent for the tenancy. 

The market rent figures provided on the Ministry of Business, Innovation and Employment's  website are based on data received as part of bonds that are lodged with the Ministry, and are intended to be be used as a guide only.

For more specific information regarding market rent in a particular area, we recommend parties contact a property valuer, or property management companies in the same area.

Tenancy Tribunal decisions are available online on the Ministry of Justice website, but are not searchable by subject type.  Orders of the Tenancy Tribunal do not set precedents, and are based on the circumstances of each individual application.

The MBIE provides advice to parties who enter into agreements that are covered by the Act, and how the Act may apply in a given situation.  We encourage landlords and tenants to contact a member of our Tenancy Advice team by calling 0800 TENANCY (0800 836 262), between 8.00am-5.30pm Monday to Friday or by accessing information via our website (www.tenancy.govt.nz), to discuss their situation with us further.  The Ministry does not have specific legal advisors for referral.

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