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Tenants Must Act Reasonably When Permitting Viewing Of The Tenancy Premises

Scotney Williams L.L.B 1

The Residential Tenancies Act 1986 provides for thirteen unlawful acts. These unlawful acts are obligations placed upon both landlords and tenants, with exemplary damages applicable if either party breach the obligation.

Of the thirteen unlawful Acts, eleven are targeted against landlords, one is targeted against both landlords and tenants and one is targeted exclusively against tenants. The one unlawful act targeted exclusively against tenants is “to permit the landlord to have access when the landlord has a right of access” with exemplary damages up to a maximum of $750 applicable. The applicable section of the R.T.A. is S 48 (4).

Exemplary damages are an award of money ordered by the Tenancy Tribunal in favour of one party and ordered payable by the other party. The money ordered payable, is in the nature of punishment for committing the unlawful act and is also to deter others from committing the same unlawful act.

There are usually two situations where this obligation is highlighted. The first is when the landlord is conducting inspections of the tenancy premises either monthly or on some other longer cycle and the second is where the landlord is conducting a showing of the property either for prospective tenants or for a prospective purchaser.

It is a common misunderstanding with landlords and property managers that there is a notice period applicable for showing the property to prospective tenants or purchasers. There is no such notice. The position is, the showing must be negotiated between the parties with the tenant not able to say a blanket “no” but the tenant can place reasonable conditions upon the entry.

This is usually done informally (without the need for a written agreement) and with the majority of tenants, the showing is achieved with co-operation and consideration by both parties.

Where the tenant is difficult about granting viewing times and days, the landlord can apply to the Tenancy Tribunal for times and days to be set. Many landlords have done this already and it is common for the Tenancy Tribunal to grant about three viewings per week.

What happens when the tenant refuses access?

In one case which occurred in Auckland ( Parton & Fifita) the tenant who had previously agreed to a showing subsequently refused the landlord access. The tenant subsequently changed her mind and did permit the landlord access but then limited the showings to two days per week on Mondays and Wednesdays between set hours.

The landlord applied to the Tenancy Tribunal for exemplary damages saying the tenant had committed an unlawful act and was awarded a modest sum of exemplary damages. The landlord appealed to the District Court and asked that court to increase the award of exemplary damages, saying the award in the Tenancy Tribunal was too low.

The District Court heard the matter and decided in the landlords favour finding:

That the tenants refusal to permit access was, on one occasion reasonable but that limiting the showings to two days per week was unreasonable.

It is significant that in S.109 (3) of the RTA the section says;

“ if on such an application, the Tribunal is satisfied that the person against whom the order is sought committed that act intentionally”…………….

The court then went on to consider the level of intention required to commit unlawful acts and found that the tenant only has to “act intentionally” the tenant did not have “intend to breach the RTA itself ”.

The court was satisfied that the tenant had acted intentionally when she limited the showings to two per week and increased the award in favour of the landlord of exemplary damages to $350.

This District Court decision is binding on the Tenancy Tribunal and unless the Tribunal can show any new case before it is significantly different on the facts , landlords could expect a similar award in similar circumstances.

The case is helpful in that it clarifies the issue of the tenants intention in committing unlawful acts, and publicises the fact that landlords are entitled to claim and receive awards of exemplary damages when the tenant acts unreasonably in permitting access for viewing.