Damages for non-consented work
Question from Leandro updated on 5th August 2020:
I have a granny flat under on the ground floor of my house that I rent to boarders with a boarding agreement. Recently I had a boarder for over a year who, when she left, went to the council and told them we had an illegal apartment.
The Council sent an inspector round and found the shower and a sink had no permit, but that there was nothing else wrong with the building itself. We were completely unaware of this and engaged with the Council immediately to sort it out. The Council said the shower was installed pre '91, so doesn't need permitting, but the sink does need a COA, which we are working to obtain.
Our former boarder has now gone to the Tenancy Tribunal and is claiming exemplary damages. How likely am I to be fined? What's the best way to proceed?
Our expert Steve Watson responded:
The Tenancy Tribunal will assess whether the arrangement you had is covered by the Residential Tenancies Act. If it is covered then the Tribunal will have jurisdiction as this person would be a tenant rather than a border. A border is someone who lives with and shares the house and facilities with you.
If the application is covered under the RTA, and a hearing is scheduled, you will need to bring any evidence that supports your side of the dispute. In this instance this would include any correspondence you have had with the Council and other documentation relating to the dispute. You should have two extra copies of all evidence ready for the adjudicator and the other person.
Exemplary damages can be awarded under the RTA if the breach is an unlawful act. Exemplary damages can’t be awarded for ‘ordinary’ breaches that are not an unlawful act, but the Tribunal can still make other orders, including an order for compensation. Schedule 1A of the RTA lists maximum amounts that can be awarded by the Tenancy Tribunal for certain unlawful acts.
The Tenancy Tribunal will consider the intent of the landlord, how serious the unlawful act is, and the impact it has had on the affected person when making a decision about whether to award exemplary damages and the appropriate amount to be awarded (if any).
For more information on breaches of the RTA and applying to the Tenancy Tribunal, go to www.tenancy.govt.nz. You can also subscribe to our e-newsletter Tenancy Matters here.
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