Wellington Property Investors' Association

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31-08-2015

Analysing claims for exemplary damages

I was flicking through some Tenancy Tribunal Statistics the other day, as you do, and found an interesting fact. The stats showed that nearly 50% of the tenant applications against landlords contained a claim for exemplary damages from the landlord, while less than 0.5% of landlords applications were for exemplary damages.

Exemplary damages are an award that the tenancy Tribunal can make against a party to the hearing. It is like a fine, but unlike a fine the award goes to the claiming party rather than the crown. So there should be quite an incentive for either party to claim exemplary damages against the other.

While it's fair enough for tenants to make these claims, it was disappointing that less than half a percent of landlord claims included Exemplary Damages against tenants. At a MBIE Tenancy meeting I asked a Tenancy Tribunal Adjudicator why there was such a disparity. She said that if the Landlord didn't claim exemplary damages then the Adjudicator couldn't award them.

One of the great aspects of the 2010 RTA changes was making abandonment of a rental property by a tenant who owes money an unlawful act. This was the first time that there could actually be consequences applied against a tenant who abandoned the property owing money. Previous to this the law almost encouraged tenants to give abandoning the property a go, as even if they were caught, all they had to do was pay back the money they already owed. Now, tenants can have up to $1,000 applied against them in exemplary damages.

At the time I thought that this change may have an impact on the number of rent arrears claims against tenants at the Tribunal. Sadly it hasn't.

Ninety-one percent of applications were from landlords and 55% of all applications were for rent arrears. Of all cases brought by landlords, 14% were specifically for vacated rent arrears, which could have had exemplary damages applied against them.

It would appear that tenants know their rights about claiming exemplary damages more than landlords. We need to get the message out there that if you are taking a case to the Tribunal for abandonment and there is also money owing, make sure you ask for exemplary damages as well.

In addition to making sure that we claim these exemplary damages, we need to make sure that tenants know that they may be up for them if they do abandon the property owing rent.

There were quite a few new and upgraded unlawful acts against tenants in the 2010 RTA changes, so here is a list of them and the maximum exemplary damages that you can claim.

  • Tenants failure to comply with a termination order ($1,000)
  • Using or permitting the premises to be used for unlawful purposes ($1,000)
  • Harassment of other tenants or neighbours ($2,000)
  • Assigning or subletting the property when prohibited to do so without the landlords written consent ($1,000)
  • Abandonment of the premises without reasonable excuse and while the rent is in arrears ($1,000)
  • Interference with the means of escape from fire ($3,000)
  • Exceeding the maximum number of residents in the property ($1,000)

As the Tribunal cannot award these damages unless you claim them, it is definitely in your interest to do so.

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