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All Quiet On The Tribunal Front

In the final quarter of 2021, landlord applications to the Tenancy Tribunal were even lower than before the first lockdown. David Faulkner suggests a few theories.

By: David Faulkner

31 January 2022

How the Tenancy Tribunal works has long intrigued me. The tribunal is where disputes over alleged breaches of the RTA (Residential Tenancies Act) and failure to negotiate resolutions end up. It always pulverises opinion. Many feel there is a bias towards tenants, although I do not share that sentiment. However, the tribunal can be inconsistent, and work needs to be done to improve this.

One of the best initiatives in recent times is the publication of Dispute Resolution Statistics by Tenancy Services.

Tenancy Services has been publishing quarterly data on the number of applications to the Tenancy Tribunal since 2020, including who has lodged the dispute and the basis of the claim. This information helps assess the key issues between landlords and tenants.

Interestingly, there has been a significant drop in applications. The first quarter of 2020 saw 7289 applications made to the Tenancy Tribunal. This number is so relevant because this is the only quarter that we have data for before the impact of the pandemic.

The second quarter of 2020 saw applications plummet to 4100. This could solely be attributed to the pandemic and measures put in place by the government to stop the eviction of a tenant. For rent arrears you had to wait until the tenant was at least 60 days in arrears rather than 21 days.

Before the pandemic, landlord applications made up 85% of all tribunal applications. Most related to rent arrears. In quarter two, landlord applications dropped from 6239 in quarter one to 3083. Unsurprisingly, this was due to the temporary changes to the RTA around termination on the grounds of rent arrears.

‘One theory is the government may be assisting tenants struggling with rent payments’

Far From Normal

Normal proceedings resumed after the first lockdown; you could again terminate a tenancy if the tenant was more than 21 days in arrears. You would have expected that normal service would resume; it did not.

And while rent arrears applications did increase slightly, they were still down on pre-pandemic applications. In the last quarter of 2021, rent arrears applications remain low. In the final quarter of 2021, landlord applications to the Tenancy Tribunal were even lower than before the first lockdown.

The mystery is why rent arrears applications have not increased to pre-pandemic levels. Rents have increased to levels above inflation. According to Trade Me data, as of November 2021, rents had increased 7.7% nationwide against inflation of 4.9%. If rents are increasing at such a high volume, the expectation would be an increase in tenants defaulting and disputes going to the tribunal.

One theory is that the government may be assisting tenants struggling with rent payments. It’s well-publicised that the government does not want to evict any tenants who rent from the state. They may be supporting tenants who fall into arrears before an application is made.

More Empathy

Another theory is that landlords and property managers have become more empathetic when dealing with tenants who fall into arrears, attempting to work through problems without making an application to the tribunal.

The constant that remains is the number of tenant applications to the tribunal. With an increase in tenant rights and name suppression giving greater protection, the assumption would be that we may have seen a rise in tenant applications. We have not. On average, just over 1,000 applications per quarter are made by tenants. As winter approaches, Healthy Homes deadlines kick in, and tenant education improves, we may see this number increase.

When dealing with disputes it’s imperative to always act in good faith and be aware of your legal rights and responsibilities.

David Faulkner is the General Manager of Property Management for Property Brokers and is recognized as one of the leading experts in the New Zealand Property Management industry. He has been involved in the industry developing robust policies and procedures, training, and consultation services for many years.

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