Renters put Tenancy Tribunal's operations in the spotlight

Friday, 24 August 2018

Renters and landlords both agree on one thing - they feel the Tenancy Tribunal favours the other side.

Questions are being raised about how the Tenancy Tribunal operates, adding fuel to an argument that renters struggle to get justice from their main avenue of appeal.

But many in the landlord community believe tribunal decisions actually tend to favour the tenant.

While there is no data on how many decisions favour landlords or tenants, Ministry of Justice records show landlords indisputably bring the bulk of cases to the tribunal.

Disputing decisions can also be an issue. The cost of appealing a tribunal decision to a court may be a barrier, and rehearings are granted or denied by the same adjudicator that made the initial ruling.

Kate Day from Renters United says renters are afraid to use the Tenancy Tribunal for fear of losing their lease.

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Renters United spokeswoman Kate Day said she hadn't seen any evidence of bias by tribunal adjudicators, but she felt there was a significant imbalance of power.

While a lot of cases were brought by landlords because of rent arrears, she said she wasn't seeing many renters bringing cases about poor housing in return.

'If tenants don't feel that they're getting their side of the bargain from the landlord, which is a home that's healthy and fit to live in, we don't feel those people are as able to bring cases,' Day said.

David Faulkner says he has some sympathy for renters who are not professionals like landlords.

Lack of literacy around their rights was one reason, but a fear of being served 90 days notice was a bigger concern, even though in principle tenants could report it.

'Even if tenants are successful in proving that an eviction was retaliatory, they're still likely to shortly be without a home the next time [they're renewing their lease] and that's a huge barrier to tenants standing up for their rights.'

The Ministry of Justice, which oversees the tribunal, confirms landlords are behind most of the tribunal's workload.

In the 2017 financial year, the tribunal received 18,530 applications, of which 16,048 were by a landlord and 2,408 were by tenants.

Property management consultant David Faulkner of Real IQ said that in terms of cost at least, the tribunal was easily accessible. Filing a case cost $20.44.

'Is it perfect? No and it never will be,' he said.

'We did a survey of property managers on whether renting was broken in New Zealand. And 67 per cent says it needs minor modifications. There's only 8 per cent of property managers think it's completely broken.'

Liam Hehir says the Tenancy Tribunal is trying to balance informality ''with the need to have some procedural fairness and justice'',

In terms of justice, however, most property managers believed they were the ones at a disadvantage. Nearly three quarters said the tribunal favoured the tenant.

However, Faulkner did have some sympathy with renters because as a landlord, 'you should know what you're doing'.

'Sometimes you're not a tenant through choice, you're a tenant through necessity. If you're a landlord you chose to be a landlord. And it's called the Residential Tenancies Act, it's not called the Residential Landlords Act. It's there to protect tenants primarily.'

The tribunal's principal tenancy adjudicator Melissa Poole, was unavailable for comment.

But on rehearings, a Justice Ministry spokesman said the original adjudicator was only involved in assessing whether cases had grounds to be reheard. The rehearing itself 'is usually conducted by a different adjudicator'.

A rehearing was usually granted either because a party to the case did not get to the hearing for good reasons, or new facts had been discovered after the hearing.

'Disagreeing with a decision is not a sufficient ground for a rehearing.'

Rehearings were free, or the decision could be appealed to the District Court. However, there were significant costs involved in that option – $200 to file for an appeal and the cost of court time was $900 for half a day.

The District Court only heard appeals if the amount awarded was over $1000, and it usually revolved around whether a miscarriage of justice had occurred.

Day said even if renters weren't afraid to approach the tribunal, there was a 'huge void' when it came to finding help.

She said the tribunal was funded by uncollected bonds and she felt the money should go towards paid advocates to help renters navigate the system.

Liam Hehir, a Palmerston North lawyer specialising in property, said in fact, the tribunal was fuelled not just by uncollected bonds but by a trust fund that all bonds went into, and which was audited by the Auditor General.

Income generated from bond money, such as interest, belonged to the Crown and was considered revenue for the Ministry of Business, Innovation and Employment (MBIE) which runs Tenancy Services.

It earned a healthy income. MBIE's last annual report showed there were $509 million in the bonds trust fund, which earned almost $21m in interest. Bonds that lay unclaimed within six years after the tenancy ended also became property of the Crown.

Hehir said all things considered, the tenancy tribunal was meeting a need.

'Overall, the thing with the Tenancy Tribunal is it's trying to balance informality with a smaller scale of costs with the need to have some procedural fairness and justice,' he said.

David Sheppard, Hehir's colleague at Fitzherbert Rowe, said while tribunal rehearings did not have an exact equivalent in the District or High Court, leave to appeal was often determined by the same judge that made the original ruling.

Rehearings in the Disputes Tribunal, set up for small claims, were also often determined by the original referee.

'Remember that in the smaller centres there's often only the one referee to hear and determine everything.'