In March 2021, a case was opened by the Tenancy Compliance and Investigations Team (TCIT) at MBIE in response to an allegation received from a tenant of Hambletonian Limited in north Waikato.

The investigation found that Hambletonian Limited were operating a boarding house and were not compliant with boarding house rules under the RTA.  

The landlord failed to lodge bonds for multiple tenants, arguing that the people living at the property were flatmates, and not boarding house tenants.

The case was heard by the Tenancy Tribunal, and the Tribunal was clear that the people living at the property were boarding house tenants.

“The Tribunal noted that parties cannot contract out of the Residential Tenancies Act. This means that a landlord cannot avoid his or her obligations by labelling the relationship as something other than a residential tenancy,” said Brett Wilson, National Manager, Tenancy Compliance and Investigations.

“Landlords should be aware of their obligations under the Residential Tenancies Act and work to ensure they are meeting them.”

All of the tenants at the property signed a flat sharing agreement and were unaware that they were entering a boarding house tenancy until visits from TCIT.

As well as failing to lodge a bond for the tenants living at the property, the Tenancy Tribunal found that the landlord breached their obligations relating to smoke alarms, healthy homes standards, and tenancy agreements.

“The Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016 requires smoke alarms to be installed within at least 3 metres of each bedroom door, or in every room where a person sleeps,” Brett Wilson said.

“The Tribunal found there was a lack of smoke alarms and the distance to the nearest smoke alarm was over 4 metres away. The Tribunal noted that if there had been a fire then the consequences may have been catastrophic as the property is an old wooden structure, far away from urban fire stations, and it is likely any fire would have taken hold quickly and would not have been put out by the residents,” Brett Wilson said.

“Landlords should comply with smoke alarm requirements because smoke alarms save lives.”

The Tribunal also found that there was no underfloor insulation at the property for approximately 2 years after landlords were required to comply with the regulations.

As part of the total fine handed out, $1,600 in exemplary damages was awarded after the landlord failed to lodge tenant bonds, instead charging tenants a ‘land access’ fee which was not always returned at the end of the tenancy.

The Tribunal emphasised that it is important for bonds to be lodged at the Bond Centre so if there is a dispute about the bond at the end of the tenancy, tenants have the option to go to the Tenancy Tribunal.

The landlord has applied for a re-hearing and the Tenancy Tribunal has granted a stay of proceedings.

Tribunal findings:

9471577-Tribunal_Order_Redacted [PDF, 121KB](external link) — Justice.govt

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