Dunedin Landords face Tenancy Tribunal over Illegal Letting of Rooms

The Tenancy Tribunal has ruled several North Dunedin landlords have been requiring tenants to sign illegal fixed term contracts before granting them residence in studio rooms or boarding houses. The practice is believed to be widespread in Dunedin, and according to a Critic investigation, may be being used by landlords who have already had Tribunal rulings against them. Particularly vulnerable to these contracts are international students who are usually unwilling to complain or students who otherwise do not know their rights. 

Under the Residential Tenancies Act, a boarding house is defined as a residential dwelling with six or more rooms where tenants rent an individual room, but facilities such as the kitchen, laundry or bathroom are for communal use. 

Unlike a tenancy for a flat or self-contained apartment, tenants in a boarding house are entitled to vacate the property and terminate the tenancy at any time by giving 48 hours notice. Tenants cannot be made to pay rent until a fixed date, or pay costs to find a new tenant. While some landlords have attempted to rewrite contracts to avoid this, the High Court has confirmed that a landlord and a tenant are unable to enter into a boarding house tenancy for a fixed term, and that the relevant consideration is the nature of the tenancy, not the wording of the contract.

The tenancy tribunal heard a total of 13 cases related to boarding house tenancies in 2016. Several cases revolved around landlords seeking rent arrears against tenants who left before the end of a 6 to 12 month period.

In one case regarding 61 Duke Street, the property management company Student Accommodation Limited were ordered to immediately pay the tenant a rent refund of $1,190.44 as a result of the room not being in a liveable condition when she moved in, due to “mould and vomit in the room and holes in the mattress”. While it was not pertinent to the case, there was also dispute as to the nature of the tenancy. The Adjudicator, J Wilson, found that while it was being advertised as a studio room, the residence was a boarding house due to the fact that there were 28 rooms with communal facilities and individual tenancy agreements. We contacted the landlord in question to inquire as to whether he was still requiring tenants to sign illegal fixed term contracts, but he refused to confirm or deny, saying “I’m not bloody giving you anything” before hanging up. 

Another residence where landlords may be enforcing illegal contracts is 8 Pitt Street, a property managed by Edinburgh Realty. Because it contained 6 rooms with a communal kitchen and laundry, a representative for Tenancy Services said that “unless there is some other factor we are unaware of, 99 percent of the time this would be a boarding house tenancy”. Despite a case going to the Tenancy Tribunal last year, a current resident told Critic she had been informed that if she left her flat early she would be required to pay rent and advertising costs until Edinburgh Realty found a replacement tenant. When asked about this the landlord said he would speak to the owner and get back to us. He never did. 

In a case regarding 63A Queen St, managed by Cutlers Property Management, a resident informed us that they had signed a fixed term contract for what they thought should be boarding house tenancy. The landlord confirmed that he does use a fixed term contract for the property, and told us he did not consider the residence a boarding house, saying, “I’ve dealt with this, I’m fully aware. We went to court about this last year and we won.” While Cutlers did in fact win a Tenancy Tribunal case, with the tenant ordered to pay $2410 in rent arrears, the Adjudicator J Wilson did also state that “on the face of it the tenancy appears to meet the definition of a boarding house”. It is possible this decision was overturned in a higher court, but Critic was unable to find any evidence of the case being appealed, so residents may have been misled about their ability to exit their tenancy. 

Judge J. Wilson did acknowledge that the definition of a boarding house is “to say the least, a particularly convoluted definition,” which may be difficult for landlords to interpret. Whether through genuine misunderstanding or deceit, the practise of landlords attempting to enforce fixed term contracts in boarding houses appears to be continuing and prevalent.

 

If you think you may have signed an illegal contract, SOULS offers free Tenancy Advice and you can also call Tenancy Services toll free on 0800 836 262. Filing a case in the Tenancy Tribunal only costs $20 and both parties represent themselves. You don’t need to be a lawyer to take your landlord to court; you just have to stand up for yourself. 

This article first appeared in Issue 4, 2017.
Posted 10:23am Sunday 19th March 2017 by Joel McManus.