Property investors say a Tenancy Tribunal ruling against a South Auckland landlord will send shockwaves among landlords - and could result in the rental shortage getting worse.
A 2016 law allows the government, rather than tenants, to prosecute bad landlords in the Tenancy Tribunal. Photo: 123RF
Manurewa man Satya Silan is the first landlord to be successfully prosecuted under the government's new tenancy laws.
Mr Silan was ordered to repay $16,000 in rent and pay $750 in exemplary damages for renting an unconsented garage, with no smoke alarms, as a home to a family with a young child.
New Zealand Property Investors Association executive officer Andrew King said the ruling could spook people who rented out unconsented dwellings, such as granny flats.
That could, in turn, result in fewer rental properties being available, he said.
Tens of thousands of unconsented homes were "perfectly good for living in".
"If people get spooked and end up not renting those out, it could have a huge impact on the supply of rental properties," Mr King said.
He hoped the government would target only those landlords who rented unsanitary and unsafe housing.
The 2016 law allows the government, rather than tenants, to prosecute bad landlords in the Tenancy Tribunal.
The Ministry of Business Innovation and Employment, which prosecuted Mr Silan, said he had rented the garage once before and ignored Auckland Council warnings.
The tribunal found Mr Silan failed to provide a warm, dry, safe home.
The Tenants Protection Association's Christchurch manager, Di Harwood, said the successful prosecution put landlords on notice, but she expected the government would take only the worst offenders to the tribunal.
"By having these cases, they are setting a precedent," Ms Harwood said.
Tenancy Tribunal compliance and investigation manager Steve Watson said it would primarily encourage landlords to improve conditions.
Since the ministry set up an investigations unit, it had received 242 complaints. Of those, more than 200 breached tenancy law.