Is the Owner or Property Manager Responsible for a Compensation Order?

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A recent case taken to the Tenancy Tribunal underscores the responsibility a property manager takes on when a landlord is overseas for more than 21 days. In this case, both the landlord and their property manager were found responsible for a compensation order.

In the dispute taken to the Tenancy Tribunal late last year, the adjudicator considered section 16A of the Residential Tenancies Act, which mandates that a landlord appoint a property manager when they are overseas for more than 21 days. Under this section the property manager takes on all the landlord’s “rights and obligations.”

Since the owner was living overseas, the adjudicator found this section applied, meaning the property manager was also a landlord and jointly responsible while the agency was in place.

Read about the importance of appointing a representative when going overseas.

The Dispute

In this case it was found that the landlord failed to provide a clean, compliant property and did not address ventilation, drainage and maintenance issues in a timely manner. The Tenancy Tribunal awarded compensation for rent and additional expenses to the tenant.

Why Were Both the Landlord and the Property Manager Responsible for the Compensation Order?

As discussed above, the Tribunal determined that the property manager is considered a landlord and is jointly and severally liable with the owner for the duration of the agency. Although there was extensive correspondence between the owner and the tenant, as well as with the agent’s contractors, this was largely due to communication issues between the owner and the agent, which affected compliance. Since the agency agreement concluded on September 1, the Tribunal ruled that both the property manager and owner are jointly liable up to that date, with the owner assuming sole liability thereafter.

What Can We Learn from This Case?

This case highlights that an agent/representative can take on considerable responsibilities for the owner. It is important to understand that even after their management role ends, a property manager might still be liable for compensation orders related to claims that happened during the time of their management.

Other Noteworthy Tenancy Tribunal Cases

At Crockers, we keep a close eye on how the law is being interpreted in Tenancy Tribunal cases.

See our write ups of these recent interesting cases: Communication During Notice Period Negotiations Highlighted in Tribunal Case, Landlord’s Place of Residence Exclusion Not Applicable in Tenancy Tribunal Case, Tenant Refunded Almost $60,000 After Illegal Tenancy and Landlords Fined Following Invalid Termination Notices.

For personalised advice on managing your property or navigating tenancy issues, reach out to our Property Management team at pm@crockers.co.nz or call for a chat on 09 623 5952.