The co-landlords have also been restrained from committing the same unlawful acts, including failing to provide premises in a reasonable state of cleanliness and failing to lodge bonds, for a period of 3 years.

The Ministry of Business, Innovation and Employment’s (MBIE) Tenancy Compliance and Investigations Team (TCIT) opened an investigation into the properties after receiving complaints from tenants.

A range of recurring issues were identified during site visits by TCIT, including smoke alarms and extractor fans that were not working or not installed, damaged gutters, excessive rubbish and no ground moisture barrier.

Tenants also complained of a cockroach infestation, sewage overflows, and holes in the walls and floorboards.

Following 5 days of hearings, the Tenancy Tribunal found Quan (Marshall) Shu and ARent1 Limited had committed multiple breaches of the Act, including:

• Having no or non-functioning smoke alarms in various tenancies
• Extractor fans that were missing or inadequate
• Damaged gutters and drainage systems
• Excessive rubbish and poor sanitation
• Unlawful clauses in tenancy agreements, including clauses allowing for immediate termination of a tenancy if the tenants did not pay rent on time.

The adjudicator noted that Mr Shu’s operation was sizeable, given the number of tenancies he was operating, and the landlord would have been aware of his obligations under the Act, including the requirement to comply with the Healthy Homes Standards and lodge bonds within 23 working days.

Mr Shu accepted that he had breached his obligations under the Act in multiple instances but argued his actions were not intentional and partly arose from the fact he was an inexperienced landlord who had not intended to operate large numbers of tenancies.

TCIT National Manager, Brett Wilson, says complying with the Residential Tenancies Act is a legal requirement, not something optional depending on the landlord’s personal situation.

“It is not an excuse to say that they had not intended to operate as a large-scale landlord. Operating a tenancy is a business and that comes with responsibilities for landlords to comply with all legal requirements,” Brett Wilson said.

“Mr Shu and ARent1 Limited displayed a pattern of neglect and non-compliance across dozens of individual properties, including failing to lodge tenants’ bond on time and including unlawful clauses in tenancy agreements.

“Mr Shu acknowledged some bond payments deposited into his bank account were directed towards the payment of personal loans. Bond payments are not the landlord’s own money, and it is simply not acceptable for them to use tenant funds to pay for their own personal financial obligations,” Brett Wilson said.

The Tribunal noted that unlawful clauses in tenancy agreements, which included allowing for immediate termination of a tenancy if the tenants did not pay rent on time or the landlord wanted to sell or repair the property, directly attempted to defeat and evade the protections available to tenants under the Residential Tenancies Act.

“TCIT will not hesitate to take Tribunal action if necessary to ensure a fair outcome for tenants and to hold landlords to account, Brett Wilson said.

“The Tribunal’s decision sends a strong message that landlords must meet their legal obligations and provide safe, healthy homes for tenants.”

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