Paying a $500 “holding deposit” for a room in a private house but then deciding not to move in has proved costly for a would-be tenant.
When Tangi Huia Regina Teaukura asked the landlord to give her “bond” back, he refused, so she went to the Tenancy Tribunal asking it to order a refund. The tribunal also refused, saying Teaukura wasn’t in a renting arrangement that fell under the Residential Tenancies Act 1986 (RTA).
Nor was she in a boarding situation, although adjudicator A Aiolupotea said she should consider applying to other tribunals to retrieve her money.
The facts
On 17 November last year, Teaukura saw an advertisement on Facebook for a room to rent. She went to view the property, paid a $500 deposit into the landlord’s bank account and was expected to move into the room on November 24.
Three days later, Teaukura told the landlord she could no longer move in due to personal circumstances and asked for the bond back. He refused, saying it was non-refundable.
No written tenancy agreement had been provided by the landlord, who has name suppression and attended the tribunal hearing with his parents. An interpreter was provided by the tribunal.
While at the five-bedroom house where the landlord lived with his wife and parents, Teaukura said she noticed two others renting two of the bedrooms. She was not sure if there were more renters.
The law
Before deciding on Teaukura’s application for a bond refund, the adjudicator had to determine whether the tribunal could hear the claim.
Section 5 of the RTA sets out a variety of circumstances under which a tenancy is excluded from the Act. Section 10 says where a party to the proceedings contends the Act does not apply, this party has the burden of proof.
Section 5 (1)(n) goes further, saying the Act does not apply where the premises, not being a boarding house, continues to be used during the tenancy, principally as a place of residence by the landlord or the owner of the premises or by any member of the landlord’s or owner’s family.
Teaukura told the tribunal she believed a tenancy agreement was created when the landlord agreed to rent a room to her.
The room was for her exclusive use and could be locked from the inside. Common areas she could use included the kitchen, laundry and lounge area, with the latter being shared with the landlord. If she wanted to use certain appliances in the kitchen, she had to pay more.
There was no agreement as to how long she would live at the property, but Teaukura said it was her intention to stay longer than a month.
The landlord lived at the property with his family and it was their main residence. He said his intention was to rent out the room and only two rooms on the property were for rent. He was flexible as to how long rooms could be rented – it could be for only a week, but it could also be rented for several years. There was no discussion as to whether Teaukura would stay more than 28 days, the landlord said.
The decision
The adjudicator said when determining whether the RTA was excluded, the tribunal considered the substance of the agreement between the parties rather than the labels they had applied.
“Considering the evidence, the renting arrangement does not fall under the Residential Tenancies Act because the landlord and his family use the property as their main place to live. This is not a boarding house as there were [fewer] than six boarders staying there at a time and the length of stay for renters can be less than 28 days.”
Teaukura’s application was dismissed.
Read the decision here.
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