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Landlord Fined In District Court For Repeated Failure To Lodge Bonds

A Tauranga landlord has been convicted and fined $1,350 at a sentencing in the Tauranga District Court following action taken by MBIE’s Tenancy Compliance and Investigations Team (TCIT).

Kevin Bustard, a director of several property management companies in the Bay of Plenty area, was found guilty of two counts of breaching a restraining order issued by the Tenancy Tribunal after continuing to fail to lodge bonds in accordance with sections 109A of the Residential Tenancies Act 1986 (RTA). The sentencing is the first time such a case has been brought before a District Court.

A restraining order issued by the tribunal lasts up to six years and means if the person involved commits another, similar breach of tenancy law in that time they can be charged with a criminal offence, rather than the fines levied by the Tenancy Tribunal.

Tenancy Compliance and Investigations National Manager Steve Watson said the way in which Mr Bustard handled the receipt and lodgement of bonds was concerning, unlawful and unprofessional, particularly given his career as a property manager.

“Landlords and property managers need to remember they are running a business; with this comes the obligation and responsibility to comply with the Residential Tenancies Act. There is no justification for this poor behaviour, and particularly given his previous experience with the Tenancy Tribunal, Mr Bustard should have known better.

“The lodgement of bonds is fundamental to the integrity of the tenancy system; by lodging the bond, the money is held for safekeeping by Tenancy Services until the end of the tenancy, when the tenant or landlord can apply to have the money refunded.

“TCIT will always try to work with landlords first to help them understand and comply with the requirements of tenancy law, however where there is a serious or ongoing breach of the RTA, we will use the enforcement tools available to us as the regulator.”

Mr Bustard was originally issued with a restraining order by the Tenancy Tribunal in 2019 following action taken by previous tenants. Mr Bustard was later investigated by TCIT and was found to have breached the restraining order by failing to lodge multiple tenants’ bonds within the required timeframe.

Where TCIT have noted a restraining order against a landlord or property manager, the team often monitor the landlord’s subsequent behaviour to ensure they are not committing further breaches of the RTA. Where breaches are identified, the team will make contact with the landlord and encourage voluntary compliance with the RTA, however where the landlord is unwilling to comply, more punitive action can be taken.

Under the Residential Tenancies Amendment Act 2020 which became law earlier this year, new provisions were introduced which strengthened the enforcement measures available to MBIE as the regulator of the RTA; this is operationalised through TCIT. TCIT can now issue Improvement Notices to correct a breach of the RTA and these carry a penalty if not complied with.

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