One Where Common Sense Does Not Win The Day

The Deputy Principal Tenancy Adjudicator, Rex Woodhouse, once described the Residential Tenancies Act as the most complicated piece of consumer legislation in New Zealand. I can’t agree with him more. When it comes to tenancy law, there isn’t always a thru line between common sense and compliance.

Sam’s story is unusual, though I suspect iterations will become more common now that the Auckland Council is enlisting storm-affected property owners to opt into its Risk Categorisation Programme. It went something like this:

Sam’s Muriwai home emerged from Cyclone Gabrielle largely unscathed. Given its white-sticker status, she and her landlord agreed that the tenancy would continue. A year later, the Council, applying the National Risk Category Framework, classified the property as Category 3, meaning that it would pose an intolerable risk to life in a future climate event. This entitled the landlord to participate in the Council’s buyout programme. The landlord was agreeable and instructed the property manager to initiate termination. Acting on the Council’s advice, the property manager gave a s59 notice, leaving Sam and her family only seven days to move out of the property. Sam accepted that she would have had to move out at some point but struggled to understand the short notice, especially given the property had sustained no damage. In the ensuing back and forth, the manager re-initiated termination under s51(2)(a), citing the impending buyout.

Now, you may think this is no big deal. The property isn’t going to be Sam’s forever home anyway. She’s going to have to move out; it is just a matter of time. But for Sam and her landlord, the way things have unfolded had been entirely distressing and bewildering. One moment, the property was safe to live in, but then it was not. Sam received mixed messages about how many days she had to find and move into a new home. And though the landlord and property manager were incredibly sympathetic, they felt that their hands were tied by the RTA.

When I first heard the story, I was struck by how flawed both notices were (leaving the landlord possibly in breach of s60AA and liable for a penalty of up to $6,500) and how, once again, the complications of the RTA had led to unnecessary distress for everyone involved.

Let’s unpack:

The Tenancy Tribunal has been very clear in the past that for a s59 notice to stand, there has to be actual destruction of the premises. Actual, not potential. Category 3, in this instance, relates to likely destruction in a future climate event that poses an intolerable risk to life. Sam’s home sustained no destruction and, therefore, does not meet the section’s threshold for termination.
A s51(2)(a) notice is equally problematic. The explanatory notes accompanying the section unequivocally state that the property must be listed on the open market for anyone to purchase to entitle the landlord to a termination. Sam’s home was never going to market because there was already a designated buyer – the Council.
S60AA makes it unlawful for the landlord to terminate a tenancy, knowing he is not entitled to it. Ignorance is not a defence nor an excuse; that is well established. Fortunately for the landlord, Sam had not gone to the Tenancy Tribunal. Instead, she had gone to Fair Go to bring awareness to the issues.
A compliant and more appropriate way of dealing with the situation would be for the parties to agree to a termination date that is as humane to Sam as it is practicable to the landlord. Section 50(1)(d) or a combination of sections 51(2B) and 11(2) can well facilitate this pathway.

We see here how the interplay between the RTA and other laws could create fissures through which good intentions and common sense can fall. Everyone involved, the well-meaning Council bureaucrat, the good-intentioned landlord and the experienced property manager, got caught out by the RTA’s complexities and subtle nuances. They all did everything they thought to be right but ended up doing just about everything wrong. And poor old Sam had to suffer the consequences.

Unfortunately, stories like this will continue to happen. Every time the RTA is made more complicated, it becomes harder to follow and easier to break. That’s the trade-off we should all think of when we call for the law to change.

Unwinding RTA’s complications will take time and political courage. I am not sure if it will ever happen. Meanwhile, the sector faces heightened monitoring and scrutiny every day. I encourage landlords to safeguard their interests by prioritising tenancy compliance. This could mean investing in education or seeking guidance from experienced consultancy/advisory services.

APIA provides regular tenancy presentations and workshops to up skill landlords and property managers. Join us in our mission to empower landlords with the knowledge and tools they need to navigate the complexities of the rental market successfully. Sign up now to gain valuable insights, connect with industry experts, and take your property management skills to the next level.