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Tenant’s Novel Argument Fails The Test

Tribunal adjudicator rules in favour of $100-a-week rent rise.

By: Sally Lindsay

28 June 2023

Objections to a $100-a-week rent increase have been thrown out by the Tenancy Tribunal despite the tenant’s novel argument.

Parker Van Lawrence, representing tenant Tracy Constable, maintained the tribunal should find the $515 to $615 a week rent increase notice invalid because it was retaliatory or it was a constructive termination notice.

Constable had been living in the average condition Massey three-bedroom, two bathroom since July 2014.

Previous rent increases had been modest; $10 in 2017 and $15 in 2020. The rent was $490 a week at the beginning of the tenancy and the new rent of $615 a week represented a 20 per cent increase over about seven-and-a-half years, equating to about a 3 per cent per year increase.

Van Lawrence told the tribunal it could strike down the rent increase if it was motivated by the tenant exercising their lawful rights.

He urged the tribunal to interpret section 54 of the RTA purposively (using the tribunal’s jurisdiction under section 77 2(j) and treat “retaliatory” rent increases analogously to retaliatory termination notices under section 54.

Under section 54 a tenant can apply to the tribunal for a termination notice to be declared retaliatory. The tenant must prove that in terminating the tenancy the landlord was motivated wholly or partly by the tenant exercising a right under the tenancy agreement or any act, or by any complaint against the landlord.

Section 77 2(j) gives the tribunal jurisdiction to order that a provision of the RTA “shall not apply to, or in relation to, any tenancy agreement or any residential premises or shall apply in such modified form as the tribunal may specify in the order”.

Creature Of Statute

Tribunal adjudicator R Kee said the submission went beyond what he could do when interpreting the RTA. “The tribunal is a creature of statute. It can only apply the RTA. It cannot reformulate the act in fundamental ways that clearly go beyond parliament’s intent. What Van Lawrence urges goes beyond interpreting the RTA to reformulating it.”

He would not have found it proven the landlord’s rent increase notice was “retaliatory”.

“Van Lawrence placed a lot of emphasis on an email in which the property manager had commented to her manager: ‘I am looking at increasing her rent in line with current market for three bed, two bath (which will see it increase by $100 per week) with the hearing being next week is there an issue doing this … [a]s I am not wanting to be seen as retaliatory should [w]e lose the case next week and then issue the notice.’”

Van Lawrence portrayed the email as betraying guilty knowledge that the landlord’s true motivation for the rent increase was retaliatory.

However, Kee says he did not consider the email betrayed guilty knowledge. Rather, it showed an awareness of how the rent increase might be “seen” as being retaliatory.

“If such an email emerged in a section 54 case, it would indicate a competent professional awareness of the law. It would probably not (depending on the context and wording) of itself have proved a prohibited motive.”

Nor, he said, had the tenant shown the rent increase amounted to effective unlawful termination.

“That might have been the case if the rent increase was substantially above market value and in excess of what the tenant could tenably be expected to be able to afford.”

No ‘Smoking Gun’

However, in this case the increase was in line with market rent. Also, WINZ paid the tenant’s rent and there was no evidence WINZ would not meet the higher rent.

Kee adds there was no “smoking gun”-type evidence the landlord wanted to force the tenant out by charging an unaffordable rent.

On the other hand there was evidence to the contrary: the property manager specifically mentioned in her email to the landlord dated February 1, 2022 that “I don’t believe the tenant will move for this [rent increase].”

There was evidence that in setting the new rent the landlord took into account the tenant had installed a portable cabin at the premises without permission.

On February 1 last year (the day the notice of the rent increase was sent to the tenant) the property manager emailed the landlord seeking instructions over the $100 per week rent increase explaining: “Keeping in mind the tenant moved a tiny house onto the property early last year without approval, I feel the rent increase is acceptable as it is highly likely … [she] will be allowed to the keep the tiny house there.”

Kee says although the presence of the cabin factored into the amount of weekly increase, the landlord did not rely on this additional amenity. “Rather, it relied on data showing the rent increase was in line with similar properties in the same area, without factoring in the portable cabin.”

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