A Rotorua landlord has been fined $12,000 and given a three-year restraining order for charging rent above market rate for a property he “failed to sufficiently maintain”, the Tenancy Tribunal has ruled.
The landlord, Stephen Chiman Bhana, has since applied for a rehearing of the decision at the Tenancy Tribunal and in the District Court.
After complaints from multiple tenants, the Ministry of Business, Innovation and Employment investigations team visited the property owned by Bhana four times between November 2022 and April 2023.
The team observed the two-bedroom property to be in a “very poor state of repair”.
A badly leaking roof, cracked windows, broken gutters, holes in the flooring, as well as rotten timber in the window frames, and external soffit and eaves were all identified by the investigators.
Failure to comply with healthy homes requirements
The landlord also failed to comply with basic healthy homes requirements, it was found.
In this case, this meant there was no way of heating the property as the heat pump was “non-functioning”; the fireplace was uncovered and open; there were draughts; and there was no ground moisture barrier or drainage.
The property at the time was rented by a young couple expecting their first child. Due to the condition of the property, MBIE said the couple were “reluctant” to raise their newborn at the address.
The couple eventually moved at the start of the investigation.
Condition ‘impacted’ health of children
While the investigation was ongoing, Bhana rented the property again — to a mother with two young children — and increased the rent from $650 per week to $750 per week, despite “not adequately completing any maintenance or repairs”.
MBIE said the tenants were unable to use the front bedroom and had to sleep in the lounge at one point due to “water dripping through a damaged ceiling”.
The poor condition of the property impacted the health of the young children, particularly the eldest one, who has bronchitis.
After the site visit, Bhana advised the investigator that problems at the property had been identified and addressed. However, after failing to produce evidence of remediation work, further site visits confirmed “this was not the case”.
Rent ‘substantially’ overcharged
The tribunal considered the rent charged for the property exceeded the market rent price by a “substantial” amount – despite its condition.
A three-bedroom property in good condition not far from Bhana’s property was offered at $650 per week in rent, the adjudicator noted.
MBIE said in the case of this tenancy the rent had to be considered on the basis that it was a “property in poor condition with only one useable bedroom”.
A market rent order was then issued by the adjudicator reducing the rent from $750 to $486 per week.
The order was back dated to November 2, 2023, meaning the landlord was required to reimburse the tenant all overpaid rent within 10 working days of the order. It equated to more than $8700.
Lack of maintenance ‘deliberate’ – adjudicator
On the state of the property, the adjudicator said the landlord has made “deliberate decisions” around what maintenance to provide at the property, and the effect of the unlawful act was that the tenant lived in a premises “well below the minimum lawful standards”.
A restraining order was put in place on Bhana for three years. Under the restraining order, Bhana would be restrained from committing further unlawful acts of the same kind for a period of three years.
Additionally, he was also ordered to undertake all necessary repairs to the property by July 23, 2024.
MBIE noted the repairs were yet to be completed, and the tenancy, compliance and investigations team would “continue to monitor” the situation.
While both of Bhana’s appeals of the decisions were currently pending, a stay of proceedings has been granted in respect of the exemplary damages awarded — but the work order, market rent order and rent reimbursement orders must still be complied with, MBIE said.
The Tenancy Tribunal found Stephen Bhana breached the Residential Tenancies Act 1986 with the following unlawful acts:
- Failing to provide the premises reasonably clean and tidy (one tenancy)
- Failing to provide and maintain the premises in a reasonable state of repair (both tenancies)
- Failing to comply with the Healthy Homes Standards (both tenancies)
- Failing to produce documents to MBIE.
