John Campbell: How well does the law protect tenants from 'bad' landlords?

With almost a third of Kiwis renting, and legal changes affecting tenants afoot, the Tenancy Tribunal's role in protecting them is more crucial than ever. But how well does it fulfill that role now? John Campbell, reporting for Fair Go, meets some out-of-pocket tenants and goes in search of the landlord ordered by the Tribunal to pay them.

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On April 17, the Tenancy Tribunal awarded a total of $2400 to Rochelle Peck, a mother of two, who had been renting a home in Auckland.

The money was made up of $2000 in exemplary damages for an “unlawful” and “retaliatory” termination notice (more on retaliatory notices, later), $380 compensation for failure to repair a washing machine, and a $20 filing fee reimbursement.

Rochelle Peck’s former landlord was Kalem Traill.

He didn’t attend the Tenancy Tribunal hearing and he hasn’t paid Rochelle her money, despite the tribunal ordering him to do so “immediately”, four months ago.

Just over a year earlier, in a separate case, the Tenancy Tribunal awarded a total of $800 to four flatmates, including Ursula Goodwin.

The money was made up of $230 compensation for a water billing issue, $250 for a Healthy Homes statement compliance issue, $300 compensation for a “failure to maintain”, and, yes, a $20 filing fee reimbursement.

Goodwin’s former landlord was also Kalem Traill.

He didn’t attend the Tenancy Tribunal hearing and he hasn’t paid Goodwin and her flatmates their money, despite being ordered to do so “immediately”, 16 months ago.

In total, Kalem Traill owes $3200.

But Rochelle Peck and Ursula Goodwin say the quantum’s not the point. It’s what this case reveals that matters. For everyone who rents.

There are somewhere approaching 1.7 million people in this country living in rented accommodation – that’s about one in three of us.

“Over 80% of renting households rent from the private market," the legislation governing residential tenancies tells us. “This trend is anticipated to increase, with more people coming to rely on the private rental market for longer and later in life.”

The Tenancy Tribunal is a type of court that specialises in disputes between tenants and landlords, and as New Zealand law undergoes changes that, among other things, will make it simpler for landlords to evict tenants, its role potentially becomes more crucial than ever.

But even when it acts to protects tenants, it seems the Tribunal, through no fault of its own, can be ignored.

Having been to the Tenancy Tribunal, won, and then effectively been ghosted by her landlord, Rochelle Peck contacted us through the Fair Go email address (fairgo@tvnz.co.nz).

We have a weekly meeting to go through the stories people send us, and Rochelle’s experience seemed to speak to the country’s larger consideration of the relationship between landlord and tenant. The balancing act of how we might best make more rental properties available, whilst also making life as a renter more achievable, affordable and secure.

The micro and the macro. How Rochelle and Ursula speak to the lived experiences of people who are tenants, and to what protections tenants have – in theory and reality.

We’ll return to Rochelle, Ursula, and Kalem, their landlord (including his dreadful luck with Covid), shortly.

On May 21, the first reading of the Residential Tenancies Amendment Bill took place in Parliament. This is the legislation under which 1.7 million people will rent.

Housing Minister Chris Bishop introduced it as, “an important bill that proposes sensible, much-needed changes to the Residential Tenancies Act 1986 (and) which will remove barriers to increasing private rental housing supply”.

Responding to him, Labour’s Housing spokesperson, Kieran McAnulty, said, “the core of this bill is that it is easier for landlords to dismiss tenants and make them homeless than it would be otherwise, and that is simply why we cannot support this bill.”

Chris Bishop used the government's almost whimsical term for people who own rental properties: “Mum and Dad landlords are an important part of the housing market in New Zealand, so this bill reintroduces 90-day no-cause terminations for periodic tenancies.”

But the bill doesn’t only reintroduce 90-day no-cause terminations for “mum and dad landlords”. There are no maternity or paternity tests attached to them. Mums and dads aren’t in a separate termination category from, say, a childless, property magnate.

What the 90-day no-cause terminations do, to use the language of the Ministry of Housing and Urban Development, is allow landlords to “end a periodic tenancy without requiring a specific reason".

“Every way you look at this, this leads to more homeless people," said Kieran McAnulty. “The easier it is to kick people out of tenancies, the higher the likelihood that the homeless rate will increase”.

Chris Bishop asserted: “We are incentivising landlords back into the market to put downward pressure on rents." And he offered himself a hearty commendation. “That's a good thing.”

Chris Bishop cited the example of Queenstown with, as described by its own Council, its “heavy reliance on itinerant labour that is highly mobile”.

For Bishop, the “last Government's changes to, essentially, make the roll-over of fixed-term tenancies into periodic tenancies… has caused chaos” (in Queenstown).

“Previously there was a situation where many people would offer up properties into the market for, say, six to nine months when they didn't need to use the property”.

In other words, people with holiday homes, or ski houses, might rent them out on fixed terms to the “itinerants” who work in hospo, tourism and service industries in that whirling, glittering town.

But, Bishop said, when fixed-term tenancies became periodic tenancies, that meant “people just think, ‘It's all too difficult, we'll just put the property on Airbnb’, and then the property just is not used for much of the time.”

After the legislation’s first reading, the bill was referred to the Social Services and Community Committee, where the parties making submissions (some for the bill, some against, some a mixture of the two), included The Salvation Army.

Ian Hutson and Paul Barber from The Salvation Army’s Social Policy and Parliamentary Unit, told the Committee, “we oppose the reintroduction of 90-day no-cause evictions because we believe this is going to increase rental housing insecurity for many of the people that we serve.”

Theirs was a submission on behalf of people who largely don’t own holiday homes in Queenstown.

“Almost four out of ten low income households are renting in the private sector," Paul Barber told the committee. “That’s about 220,000 households. And about 40% of those households are paying more than 40% of their disposable income in rent… And if you look at the child poverty figures, more than half of the children living in material hardship are living in private rental housing. We see that Pacific and Māori households are much more likely to be renting. And these are examples of how the impacts of reducing rental tenure security will impact unevenly.”

The Salvation Army, Ian Hutson added, are “one of the largest community housing providers in this country”, and have “lots of practical experience about what works and doesn’t work to help find people stable, long-term housing that they can afford.” There is, he said, “no evidence that it’s a good policy to have no-cause evictions”.

And their recommendation?

“Our recommendation to Parliament is that these clauses be removed from the bill”.

Back at the Select Committee, a submission by Sarina Gibbon from the Auckland Property Investors Association, pointed to the Tenancy Tribunal as a kind of safety net, there to ensure no-cause terminations would work fairly and reasonably by policing landlord behaviour (should tenants who believed themselves to be victims of legislative breaches take their landlord to the Tribunal).

Sarina Gibbon actually cited Section 54 – that’s the “retaliatory notice” section under which Rochelle Peck conducted her successful action against her former landlord.

“And what we really want to see," said Gibbon, “is the promotion of Section 54 in the public dialogue so that tenants are empowered to take bad acting landlords through to the Tenancy Tribunal.”

Exactly as Rochelle Peck did – and won. A retaliatory notice (Section 54) is essentially protection against a landlord evicting someone in retaliation for that tenant asking for maintenance work to be done, or disputing the size of a rent increase, or anything they are similarly entitled to do.

In short, Rochelle Peck was able to persuade the Tenancy Tribunal that her eviction notice was a retaliatory response (at least in part) to her request for some maintenance to be done.

The Tenancy Tribunal’s Order is explicit on this point. “I find”, it states, “on the balance of probabilities that the notice to terminate issued by the landlord… was motivated wholly or partly by the tenant exercising her rights.”

Even more so, the Tenancy Tribunal’s assessment of the landlord’s behaviour in issuing that eviction notice. “I find they have committed an unlawful act.”

Boom! An emphatic manifestation of Sarina Gibbon’s assertion that the Tenancy Tribunal could police landlord breaches of legislation.

But, and this is the “but” Rochelle Peck believes we all need to consider, her former landlord has, so far, ignored the Tenancy Tribunal’s order.

Of the $2500 award against him, how much has her landlord paid?

“Nothing," says Rochelle Peck.

And Ursula Goodwin? Has the same landlord, Kalem Traill, paid the $800 awarded to her and her flatmates?

“No, no. And that was quite a while ago," she says. "It was last year.”

Traill also didn’t attend either of the Tribunal hearings, stating in both instances that he had Covid.

“Only the tenant attended the hearing," the Tenancy Tribunal’s Order states, in the Ursula Goodwin case. “The landlord sought an adjournment approximately 1 hour prior to the hearing, indicating he was unwell. No medical evidence was provided. I note this is the second time the landlord has sought an adjournment due to illness, but without medical evidence. The adjournment was declined and the hearing proceeded.”

Was he sick?

Rochelle Peck still has a text Traill sent her about him not attending one of Ursula Goodwin’s hearings.

It reads: “I did a no show, said I had covid hahhaa.”

The joke, perhaps, is that the Tenancy Tribunal’s stated ability to protect tenants from “bad acting landlords” is negligible because the tribunal does not automatically enforce its own orders.

“I thought, yes, I'm going to win this," Rochelle Peck told me, about her Tenancy Tribunal case. “Excellent. Yes. And I get there and they order him to pay it, and then I find out it can't be enforced. So what’s the point of it? What is it if it can't be enforced?"

To answer Rochelle Peck’s question, I went to a commercial lawyer, Jonathan Wood. The "intricacies” of property law are his forte. And there are such intricacies here that enforcement can almost be labyrinthine.

Still, and importantly, Jonathan Wood is an admirer of the Tenancy Tribunal. They work, he tells me, “extraordinarily hard. They are the busiest jurisdiction in this country by a mile. There are, on its tenancy side, roughly 28,000 applications every single year. And that is being covered currently by 63 adjudicators.”

But – and this is another significant “but" – the Tenancy Tribunal is a civil court, not a criminal one.

“And we have an ethos in this country," Wood says, “that civil enforcement is a ‘do it yourself’ process. So you need to understand the tools that you've got in order to enforce. And you have to do it [yourself]. It can be time consuming and expensive.”

How do you do it?

“So, the basic process is to ask for payment. If you don't get it paid voluntarily, then you need to turn it into a judgment of the District Court and then use the processes available to you in order to try and force payment. And some of those are not able to be done in the District Court. You've got to then remove it up to the High Court. For example, if you wanted to have a sale order of somebody's house, only the High Court can do that. And there aren’t any procedures set out anywhere for this. I know how to do it through trial and error, and often lawyers themselves will be ignorant to how this actually works.”

Which doesn’t alter the quality of the work the Tenancy Tribunal is doing, but it does mean, Jonathan Wood explains, that it can be “a stressful and difficult process… It's not just good enough to get a nice, shiny judgment sitting in front of you. Ultimately, if the defendant or respondent is unwilling to pay, you're probably going to have to pay more in order to enforce that judgment, and that is often why our system is set up for coming to mediated solutions and settlements, rather than going all the way through to judgment.”

Kalem Traill, landlord for both Ursula Goodwin and Rochelle Peck, did not attend the Tenancy Tribunal hearings, has not paid either of the women the financial orders made against him, and appears, at least to Goodwin and Peck, to have been untroubled by the Tribunal’s orders.

“It was a lot of time for nothing, nothing to come from it," Goodwin says. “But that doesn't mean that you shouldn't still go ahead, if you're having issues, you should still try your best.”

There’s a paragraph in the Tenancy Tribunal order that Goodwin and her flatmates won which ends, “Tenants should not have to chase their landlords for compliance.”

The adjudicator is specifically talking about the landlord’s provision (or not) of a Healthy Homes compliance statement.

But it may be that it has a broader application.

Chris Bishop asserted in his introduction to the bill, “the removal of 90-day no-cause terminations by the last government made some landlords unwilling to take a chance on tenants who don't have perfect references or a steady nine-to-five job, or had just left prison, for example, or for a variety of reasons landlords didn't want to take a chance on. Many landlords just decided to exit the market altogether.”

Will they return to the market, thanks, as Bishop asserts, to the government’s proposed changes to interest deductibility, its introduction of 90-day no-cause terminations, and existing changes to the bright-line test?

And if they do, which would be “a good thing”, as he said, where are the commensurate adjustments to protect tenants, to make home something more than a place they can be evicted from, with “no cause”? A home until people with holiday properties in Queenstown, for example, want to go skiing.

There are big questions here. To the likes of finance journalist Bernard Hickey, the government’s insistence that this suite of policies is pro the rental market, rather than specifically pro-landlord, has sometimes felt less than entirely persuasive.

In its submission to the select committee, The Salvation Army said of no-cause terminations: “We believe this will increase rental housing insecurity for low-income renters and contribute to increasing homelessness.

“The chronic housing crisis is an enormous burden on people in the communities where The Salvation Army works. This Bill will add to this burden by undoing policies that have been specifically designed to provide protection for those who are renting who are often on low incomes and living with multiple vulnerabilities.”

But if “bad acting landlords”, to quote Sarina Gibbon from the Auckland Property Investors Association, need to be held to account, there’s always the Tenancy Tribunal.

Rochelle Peck and Ursula Goodwin proved tenants can do it. Each of them went to the tribunal and won.

In the Tribunal Order in Peck’s case, the adjudicator writes: “The tenant stated that the termination notice has caused her significant inconvenience, stress, anxiety, doctor’s visit, WINZ consultations and relocation costs.”

And her landlord? The same landlord Goodwin won against.

No appearances, no payment, no sign.

What happens then?

That’s what Rochelle Peck and Ursula Goodwin really want to know.

We emailed Kalem Traill to ask him. No reply.

We texted him, twice. No reply.

Why didn’t he attend the tribunal hearings? When will he pay the financial orders made against him? Did he really have Covid both of those times?

I phoned him to ask.

He hung up.

Watch this story on our home for news, in-depth and consumer stories, TVNZ+.