Landlords Fined Following Invalid Termination Notices

November 2023

Read Time: 4 Minutes

Landlords Fined Following Invalid Termination Notices

In two recent Tenancy Tribunal cases, penalties have been awarded to tenants, following invalid notices for terminating their tenancies were given. These penalties should be seen as a warning to landlords, who are required to know the law and what the correct notice periods are, including allowing for service times when giving notice.

To ensure you are not caught out, read all about serving notices and notice times.

We take a look at the recent decisions below.

Tenants Awarded $3,000 for Invalid Termination Notice

In a case taken to the Tenancy Tribunal in October 2022 a landlord was ordered to pay a significant compensation fee for an invalid termination notice.

The landlord had initially applied to the Tenancy Tribunal for compensation, refund of the bond, and reimbursement of the filing fee following the end of the tenancy.

In response, the tenant applied for compensation and exemplary damages for an invalid termination notice and being denied a different tenancy.

While the Tribunal did award the landlord $200 in cleaning and painting compensation and $298.54 for repairs following a fire, the tenants were awarded $3,000 after it was shown that notice given by the landlord was invalid. The required 90-day notice period was not given, with the Tribunal determining only between 52 and 64 days had been given.  

The original notice plus an amended second notice had been given, but each fell short of the 90-day requirement. The adjudicator noted that ignorance of the law was unacceptable when operating the business of renting premises and considered the breaches serious. A reasonable penalty was required to deter any repeat behaviour.

Landlord Fined $5,000 for Knowingly Serving Invalid Notice

In a February 2022 case described as "reasonably bad" by the adjudicator, a landlord has been ordered to pay $5,000 in compensation after knowingly serving an invalid termination notice.

Seeking to terminate a tenancy without valid grounds was noted to "strike at the heart of a tenant's right to occupy the premises". The adjudicator considered that the tenant had been put under considerable pressure.

The termination notice did not state the reason for the landlord wanting possession but the landlord stated that she had verbally told the tenant that she and her partner intended moving into the premises.

The adjudicator noted that the notice was invalid as it did not set out the reason for termination and that this was important as the landlord may only terminate the tenancy by notice in certain circumstances. Without a reason, the tenant would have no way of knowing whether the reason the landlord is relying on was a reason that was recognised by the Residential Tenancies Act.

The adjudicator stated: "the fact that the landlord in this case told the tenant the reason for the notice, does not validate the notice. The notice is therefore invalid because it was not in the required form."

In this case, the adjudicator did not accept that the verbal reason given for termination was genuine as there were several inconsistencies in the way the termination unfolded, but even if it had been genuine the termination would still be invalid. “In my view, it is not enough for the landlord to inform the tenant of the reason orally,” stated the adjudicator. “It is a fundamental requirement that the notice states the reason.”

How to Avoid Penalties

As seen in these cases, The Tenancy Tribunal expects all owners to know the law and follow the right protocols when issuing termination notices. Owning a rental property is considered the same as owning a business. Not knowing the law is no excuse and breaches of the law can incur large fines. 

At Crockers, our property managers are well-informed of legislative requirements which change frequently. We’ll help ensure your rental property is up to standard, and help to reduce the stress of managing your most valuable asset. 

Get Expert Advice

If you’d like some further advice on renting out your property contact our Property Management team on pm@crockers.co.nz or chat on 09 623 5952.

 

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