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UNCONSENTED PROPERTIES RENTED OUT COULD COST YOU MONEY!

By Katrina Green

The consequences of renting out an unconsented dwelling has once again caused problems for a landlord, when the tenant took him to the Tenancy Tribunal as part of a claim for exemplary damages.

The tenant had other claims including the issuing of an unnecessary 14 day notice for rent arrears, as well as maintenance which was not completed (a tree growing through the clothesline), totaling $550.

It was not contested that the tenant owed six weeks rent which came to a total of $900, which should of course have meant the tenant was required to pay the balance left of  $350 to the landlord.

The Tribunal held that properties that lack a residential consent are not subject to the prohibited transaction of the Residential Tenancies Act 1986 and could not be clawed back.  However, the tenant was eligible for compensation as a result of the breach, finding that but for lack of consent, the tenancy would have been renewed and the tenants would not have incurred the expense and inconvenience of moving.

Therefore the tenant was awarded $900 in total, leaving the landlord out of pocket for rent which was owing.

This case reiterates the importance of firstly ensuring that if you are renting out a property, whether it is a house, a sleepout or a cottage, that it is compliant and consented to be rented for the purposes of living/sleeping in.

The other thing that it shows is how savvy, and well educated tenants are when it comes to their rights, and this will become more and more prevalent as new legislation is introduced, particularly with tenants being able to claim exemplary damages if landlords are not complying.

In this instance, the tenants’ complaints were that the owner had not completed required maintenance, and that they did not follow the correct procedure by issuing a 14 day rent arrears notice when the tenants were not in fact in arrears.

If you are unsure about what your obligations as a landlord are speak with a professional property manager who is up to date and understands the requirements of being a landlord.  It could save you a lot of stress and money!

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