Mould on the bathroom walls of one of the rental properties.
Photo: Supplied/MBIE
A landlord and his property management business have been ordered to pay more than $60,000 in exemplary damages after tenants at 34 properties complained of cockroaches, sewage overflows and holes in their walls and floors.
Quan Shu, also known as Marshall, and ARent1 Ltd were investigated by the Ministry of Business, Innovation and Employment’s Tenancy Compliance and Investigations Team after complaints from tenants in Auckland and Rotorua.
They were jointly ordered to pay $61,150.44 by the Tenancy Tribunal for breaches across 34 different tenancies. The co-landlords have also been restrained from committing the same unlawful acts, including failing to provide premises in a reasonable state of cleanliness and failing to lodge bonds, for a period of three years.
That means any further breach can attract more serious penalties.
Shu is the director of ARent1.
A hole in the ceiling at one of the rental properties.
Photo: Supplied/MBIE
The tribunal said a range of recurring issues were identified during site visits by TCIT, including smoke alarms and extractor fans not working or not installed, damaged gutters, excessive rubbish and no ground moisture barrier.
Tenants also complained of a cockroach infestation, sewage overflows, and holes in the walls and floorboards.
Mould on the bedroom ceiling of one of the properties.
Photo: Supplied/MBIE
The tribunal said Shu and ARent1 had also unlawfully entered clauses in tenancy agreements, allowing for immediate termination if tenants did not pay rent on time. There were also damaged gutters and drainage systems, and excess rubbish and poor sanitation, it said.
The adjudicator noted Shu’s operation was sizeable and he would have been aware of his obligations under the Residential Tenancies Act, including the requirement to comply with Healthy Homes Standards and to lodge bonds within 23 working days.
Shu accepted that he had breached his obligations under the Act in multiple instances but argued his actions were not intentional and partly arose from the fact that he was an inexperienced landlord who had not intended to operate large numbers of tenancies.
Bare floorboards with no underfloor insulation at one of the properties.
Photo: Supplied/MBIE
TCIT national manager Brett Wilson said landlords legally had to comply with the law.
“It is not an excuse to say that they had not intended to operate as a large-scale landlord. Operating a tenancy is a business and that comes with responsibilities for landlords to comply with all legal requirements,” he said.
“Mr Shu and ARent1 Limited displayed a pattern of neglect and non-compliance across dozens of individual properties, including failing to lodge tenants’ bond on time and including unlawful clauses in tenancy agreements.
“Mr Shu acknowledged some bond payments deposited into his bank account were directed towards the payment of personal loans. Bond payments are not the landlord’s own money, and it is simply not acceptable for them to use tenant funds to pay for their own personal financial obligations.”
A disconnected downpipe at one of the rentals.
Photo: Supplied/MBIE
The tribunal noted that unlawful clauses in tenancy agreements, which included allowing for immediate termination of a tenancy if the tenants did not pay rent on time or the landlord wanted to sell or repair the property, directly attempted to defeat and evade the protections available to tenants under the Residential Tenancies Act.
Sarina Gibbon, of Tenancy Advisory, said it was not reasonable for a landlord to claim naiveté.
“I think this is a continuation of the old guard, a very bygone time of landlording, which unfortunately we’re still seeing some of it in the market at the moment… For so, so long in New Zealand, we’ve allowed landlords to get away with so much and profit off these horrendous properties that essentially profit off people’s miseries, right? So, that is what the last 15 years of residential tenancy law development has been all about, continuously dragging our rental sector into 2026.”
A gap in the window frame at one of the properties.
Photo: Supplied/MBIE
Gibbon said she thought the TCIT absolutely did its job.
“Ignorance of the law is no excuse. That’s well accepted across our legal system… I think if anything, anyone who owns that many should take more care because their ability to do harm is even greater,” she said.
“With any sort of regulator funded by the public kitty, they’ll have to look at cost-benefits… in this instance, I can see why TCIT looked into this matter, because (this particular landlord has 34 separate tenancies, and the scope to do harm is so much greater than a landlord who has one tenancy with one disgruntled tenant.
“If you are somehow aware that your landlord is operating a big portfolio, or you’re with a property management agency, and you know that they operate a sizable portfolio, and the bad practices are endemic throughout the entire business practice up and down, I would characterise TCIT as perhaps a more efficient way to get some redress.”
She said tenants should have more power in the current market, where rents are softer and there is less competition.
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