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A landlord has been fined more than $12,000 after charging above-market rent on a cold, damp, and unsafe home.
The Ministry of Business Innovation and Employment (MBIE) said it inspected a Rotorua property owned by Stephen Bhana four times between November 2022 and April 2023, following complaints from multiple tenants.
MBIE national manager of tenancy compliance and investigations, Brett Wilson, said Bhana had rented the home to a couple expecting their first child.
But he said the condition of the property led the couple to move out because they were reluctant to bring up their child there.
During its initial inspection, MBIE found the property to be in a very poor state, with a badly leaking roof, cracked and broken gutters, holes in the flooring, and rotten timber in the window frames.
The ministry said there was also no way of heating the home with a non-functioning heat pump, uncovered open fireplace, draughts, and no ground moisture barrier or drainage.
Wilson said Bhana later claimed problems identified had been addressed. But he said Bhana failed to produce requested information and further visits to the property confirmed this was not the case.
While under investigation, Bhana rented to a mother with two children, and increased the rent from $650 to $750 a week, despite not fixing serious issues.
Wilson said the family were unable to use the front bedroom, due to water dripping through the damaged ceiling, and at one point, they all had to sleep in the lounge.
He said the condition of the property impacted young children's health, one of whom had bronchitis.
The Tenancy Tribunal found Bhana committed several unlawful acts and breaches of the Residential Tenancies Act 1986.
He was ordered to pay $12,020.44 in exemplary damages to the Ministry of Business, Innovation and Employment (MBIE) on behalf of two tenancies affected
The tribunal also found the $750 weekly rent exceeded the market rent by a "substantial" amount and issued a market rent order reducing rent at the property to $486 a week, backdated to 2 November, 2023.
In addition to paying damages, Bhana was required to reimburse the tenant all overpaid rent within 10 working days of the order, which equated to more than $8,700.
He was also told to complete all necessary repairs to the property by 23 July, 2024. But MBIE said these repairs have still not been completed.
Wilson said the seriousness of the issues at the property and Bhana's history of non-compliance meant it was in the public interest to take this case to the tribunal.
"As a result of Mr Bhana's failure to comply with his obligations as a landlord, his tenants, including young children, continue to live in a cold, damp, and unsafe property.
"He has incurred additional penalties, money he could have saved if he had taken the time and effort to maintain the property to an acceptable standard.
He said Bhana owned a number of rental properties and should be aware of his obligations.
Bhana applied for a reversal of the tribunal's decision and appealed the decision in the Rotorua District Court.
MBIE said a stay of proceedings was granted for exemplary damages while proocedings were pending. But the work, market rent, and rent reimbursement orders must still be complied with.
