For people like myself who spend a copious amount of time researching the Residential Tenancies Act as well as scrolling through the thousands of Tribunal Orders that are issued each year, we are aware that this is has become anything but a straightforward question.
The issue was highlighted in a recent news story. A student flat which has affectionately become known as ‘The Dungeon’ was being advertised on the popular Wellington online community group, Vic Deals. The property which had a number of bedrooms being advertised for rent. The problem is, they are not actually bedrooms.
If you look at the images of the property in the news story, you would think the rooms being advertised as bedrooms would be more suited to torture chambers in a Quinton Tarantino movie rather than somewhere you would call home. To put it simply, they are not fit for purpose, especially when there is such a big spotlight on renting at the moment. Even worse, the property was being managed by more than one company. This is not an article about criticising the competition, however, companies must ask themselves, is it really worth taking on the risk of managing such an appalling property? The consequences can be severe and I would not be surprised to see the Tenancy Compliance and Investigation Team knocking on the door of the companies who have managed ‘The Dungeon’.
The issue that the property management industry is facing is that when they take on a property to manage, they effectively become the landlord. This is written into the RTA under section 2. Recently, we have seen a growing trend of Tenancy Tribunal decisions that have firmly placed the liability on the property management company, even when it appears that it is the actual owner of the property who is at fault. The Tribunal appear to be only too happy to hold companies who manage properties for owners liable meaning that companies have to be extremely diligent about what type of properties they take on to manage. One must seriously question why anyone would want to take on so much risk as has been the case with the ‘The Dungeon’. If you have any basic understanding of the RTA, you will know that this property is non-compliant and anyone agreeing to manage it is taking unnecessary risk in terms of litigation through the Tribunal. One must also wonder if ‘The Dungeon’ has been granted consent by the council. I would be amazed if it had.
Hopefully, you are now starting to see the relevance of the question. What actually are the characteristics of a bedroom and what, under legislation in terms of the Residential Tenancies Act must a bedroom have?
The first piece of legislation to look at is the RTA and in particular, section 45, Landlords responsibilities. In my opinion, the most important piece of the entire RTA is section 45.1(c); The landlord shall comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises. The wording of this pulls in so much more legislation from the RTA. For example, a piece of legislation that is more than 70 years old, yet is still used within Tenancy Tribunal today and in which recent times, has made a renaissance since some clever students identified its relevance to the RTA; the Housing Improvement Regulations 1947.
This legislation is the early version of the Healthy Homes Standards and many of the modern-day standards have evolved from the Housing Improvement Regulations. Under the regulations, it defines a habitable room as any room which is used or intended to be used, or, in the opinion of the local authority, is capable of being used, as a living room, dining room, sitting room, or bedroom… Then, under regulation 11 it states that every habitable room shall be provided with 1 or more windows so situated in an external wall or external walls that adequate light is admitted. It also states that the window needs to be openable for the admission of air.
The new Healthy Homes Standards state that each habitable space in the premises must have one or more qualifying windows or doors and the window or doors must be at least 5% of the floor area.
The evidence appears to be clear. For a room to be called a bedroom, it must have a window that opens to the outside. This is where legislation becomes complex and issues may arise. There could well be apartments within Wellington that have been consented by the council and comply with the Building Code and on the plans, a room may be a referred to as a bedroom, but when it comes to renting out the property, all of a sudden there are a raft of potential loopholes and issues. By advertising a property with a bedroom that has no openable external windows, you are not only breaching section 45 of the RTA, but you are also potentially breaching the Fair Trading Act by falsely advertising.
As of February 2021, exemplary damages for breaching Landlords Responsibilities increased from a maximum $4,000 to a maximum amount of $7,200. This is a substantial penalty, and many tenants who are renting such properties may well become excited by the prospect of winning such an amount.
But the issues do not stop there. Last August, we saw the introduction of the Residential Tenancies Amendment Bill 2019. This bill gave the Tenancy Tribunal jurisdiction to make rulings on unlawful residential dwellings. Under the RTA, a new section, 78A, states that the Tenancy Tribunal now has the power, if it feels necessary, to order the landlord to pay the whole sum of rent back to the tenants for the period the property was deemed to be unlawful.
So I ask this of landlords; if you are unsure as to whether your property is compliant, we suggest you find out. Also, if a room does not have an external window, or has one that does not open, please do not call it a bedroom.
If you want any advise on whether a room in your rental has deemed a bedroom or anything else, feel free to get in touch with us today.
Tommy’s Property Management