Landlord who let tenants live with sewage-soaked carpet revealed as real estate agent, denies wrong-doing

Saturday, 22 February 2025

Landlords Leiyang Shen and Lingzhi Yuan were ordered by the Tenancy Tribunal to pay their tenants more than $30k.

The tribunal found the tenants had lived with sewage contaminated carpets for 35 weeks.

Stuff can reveal that Shen - known as Leo Shen - is a real estate agent, whose boss said the state of his rental was “unacceptable”.

A private landlord who let his tenants live with sewage contaminated carpet has denied he should have known better due to his job as a Ray White real estate agent.

Landlords Leiyang Shen and Lingzhi Yuan (also known as Leo Shen and Candy Yuan) were ordered by the Tenancy Tribunal to pay $30,615 in compensation and damages for allowing their tenants to live in poor living conditions at their property in Auckland’s Dairy Flat.

Yuan and Shen, who is a real estate agent based at Ray White in Te Atatū, have appealed the ruling and will reappear before the Tenancy Tribunal in April.

The tribunal ruling found the tenants, a family with two children, lived with sewage contaminated carpet for about eight months and were unable to use their toilet for nine weeks after a sewage pipe became blocked and overflowed into the house.

Their unit, an old farmhouse split into two separate tenancies with a wall that did not meet building or safety standards, was one of three on the property.

The three units shared water tanks which contained a total of 11,000 litres, much less than the Auckland Council recommendation of 64,000L for a four person household, the tribunal noted. Residents consistently ran out of water for 24 to 46 hours at a time, despite the landlord paying to have water delivered every 1.5 weeks.

Tenancy Tribunal adjudicator Michelle Pollak ordered Shen and Lingzhi refund the tenants 40% of the rent paid between December 2023 and January 2025.

“I am satisfied that the tenants have proven that more likely than not the premise they rent is an unlawful residential premise and that on the balance of probabilities the landlord knew this, but decided to rent all three units out to earn money off its investment until it could afford to develop the property it had land banked.”

Landlord’s real estate boss says state of rental ‘not acceptable’

Stuff approached Shen for comment at his $2.47 million home in Greenhithe.

He said the order for him and Yuan to pay their tenants $30.6k was “definitely not” fair.

Shen said his work as a real estate agent had “nothing to do with” the tenancy matter.

Stuff questioned Shen on whether he should be aware of landlord obligations due to his professional background.

“I’m not in property management.

“I didn’t do anything wrong. My property manager, he managed it.”

Asked if his property manager had let him down, Shen replied: “He didn’t do anything wrong either.”

Property manager Mark Ashton, of Ashton NZ Property, did not wish to comment ahead of Shen’s appeal, other than to say: “There’s definitely two sides to a story.”

In a statement, Ray White Te Atatū branch owner Crystal McKeown said she wasn’t aware of the Tenancy Tribunal order against Shen until she was contacted by Stuff, as the tenancy was not managed by Ray White.

“In my business we uphold higher standards,” she said.

“I’m sorry to hear about the state of the property, it’s not acceptable but we were not responsible for this property in any capacity.”

Asked whether she would take any action regarding Shen’s conduct as a private landlord, McKeown said she had a “strong conversation” with him regarding “the reputation of our group, his own profile and that we uphold our values to do good industry work”.

“We have provided him with further training on property management services and will continue to provide ongoing development for him.”

Tenant describes ‘damp and smelly’ carpets

Shen denied the carpets were contaminated with sewage when asked if he would be comfortable with his family living in the same conditions as his tenants.

“We have evidence that that’s not right.”

In a letter to Stuff via his lawyer, Shen denied that the tenants lived with sewage-soaked carpet for 35 weeks, as found by the Tenancy Tribunal, as the carpet was professionally steam cleaned on 7 June 2024, about a month after the toilet overflowed, he said.

That was after the tenants changed their mind after agreeing to remove the carpet.

Shen added that there was a delay in having it cleaned due to the tenants failing to communicate with the carpet cleaning company to arrange a time and date for the work.

Stuff put this to the tenants, whose names are suppressed. They said they initially agreed to remove the carpet from the property, but changed their minds after considering the health risks of doing so.

“We contacted the property manager to say that it was unhealthy and too risky for us to rip up the carpets ourselves as it needs to be done properly with PPE gear etc, otherwise we could get very sick doing this ourselves,” they said in an emailed statement.

The tenants said they were told professionals would be brought in to lift the carpet, but a steam cleaner was organised instead.

“It remained damp and smelly for the rest of the time we lived at the property.”

The carpet was in a room attached to their children’s bedroom, which was used as a play area. After the toilet overflowed, the family blocked off the room to “avoid the children breathing in the toxic air” until the end of the tenancy.

Regarding the tenants frequently running out of water, Shen said he paid for their tanks to be filled up.

“We paid for the water, they never paid for the water.”

Shen also denied the tribunal’s statements that a wall splitting the farmhouse property into two dwellings was not up to code.

“Old buildings do not need to be consistently upgraded to meet today’s building code, his lawyer said.

“The landlords have not undertaken any structural alterations or building work and therefore are not required to upgrade the premises to comply with the present Building Act.”

Real estate agents must be ‘fit and proper’ to hold licence

The Real Estate Authority may consider complaints about licensed real estate agents if their actions amounted to misconduct under the Real Estate Agents Act.

Chief executive Belinda Moffat was unable to comment on Shen’s Tenancy Tribunal case as not to prejudice any complaints that might be made against him.

Speaking generally, Moffat said misconduct involved behaviour that reputable realtors and reasonable members of the public would consider “disgraceful”.

Additionally, people must be “fit and proper” to hold a real estate licence.

“In considering whether a person meets the ‘fit and proper’ standard, the registrar may consider a number of things including whether the person has been subject to an order of another authority or similar body.”

Auckland Council was not aware of the unlawful rental property when contacted by Stuff, but said it would have its compliance team investigate.

Tenancy Tribunal issues warning about rental

Pollak, the tribunal adjudicator, declined to give Yuan and Shen name suppression.

“I have decided to publish the tenancy address as a deterrent to the property owners continuing to rent out any of the three current unlawful dwellings at 310 Dairy Flat Highway, Albany Heights, RD3 Auckland, 0793.”