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Property manager to pay damages after failing to comply with Improvement Notice

Property Management Wellington Limited has been ordered by the Tenancy Tribunal to pay $2,000 in exemplary damages to the Ministry of Business Innovation and Employment (MBIE), after failing to comply with an Improvement Notice.

This case is the first time the Tenancy Compliance and Investigations Team (TCIT) has taken a case to the Tenancy Tribunal for failure to comply with an improvement notice. Improvement notices have been available as an enforcement power since 11 February 2021.

The Improvement Notice was issued to Property Management Wellington after they failed to provide a healthy homes standard compliance statement for multiple properties where they are the landlord, meaning tenants were not informed whether the property met the healthy homes standards.

“It is particularly disappointing in this case that the inaction was by a property management company. Property managers should be aware of their obligations under the Residential Tenancies Act and work to ensure they are meeting them,” said Brett Wilson, National Manager Compliance and Investigation.

The landlord also provided tenancy agreements with unenforceable clauses to multiple properties – such as clauses requiring the tenant to give more notice to terminate the tenancy than what is required and allowing the landlord to give a minimum of four hours’ notice to enter the property. Clauses that conflict with tenant or landlord rights and responsibilities under the Residential Tenancies Act 1986 (RTA) are unenforceable.

An improvement notice is a notice issued to a landlord or tenant by the Chief Executive of MBIE for a breach or likely breach of the RTA.

“An improvement notice is an effective tool to ensure all parties are aware of what needs to be improved and the timeframes for improvement. TCIT works with landlords to ensure these improvements are completed in a timely manner. TCIT also has the power to take action where an improvement notice has been ignored,” Wilson said.

The adjudicator noted that up to 600 tenants did not have the benefit of understanding their rights as tenants because of the actions of the property management company.

The adjudicator’s impression was that “the landlord had elected to evade its obligations under the RTA and beguile its tenants into believing they had less rights than they did.”

“The breach of the RTA was particularly egregious, given that the landlord had not complied with the notice even at the time of the hearing, 18 months from when the Improvement Notice was issued,” they noted.

Source:  https://www.tenancy.govt.nz/