26/10/2026
🏡 COULD YOUR RENTAL PROPERTY COST YOU YEARS OF RENT?
Imagine renting out a property for three years, collecting over $100,000 in rent, and then discovering that the property was not legally approved as a separate dwelling.
Sounds unlikely? It's a real case currently making its way through New Zealand's courts.
⚖️ The case: While v Moffitt
A tenant paid approximately $113,825 in rent over three years while living in a downstairs unit that did not have the required consent to operate as a separate dwelling.
The Tenancy Tribunal awarded the tenant a $4,000 rent refund.
However, the case hasn't ended there. In September 2026, the High Court granted permission for an appeal to the Court of Appeal to examine how rent refunds should be calculated for unlawful residential premises.
Could a landlord be required to refund all the rent?
Under the Residential Tenancies Act, the Tribunal can order repayment of all or part of the rent where a property qualifies as unlawful residential premises. The outcome depends on the circumstances, and the Court of Appeal has not yet resolved the questions raised in this case.
🔎 What should property owners check?
Before renting out a property, particularly a converted garage, sleepout or self-contained downstairs unit, it's important to establish whether it can legally be used as residential accommodation.
And remember:
✅ Meeting Healthy Homes Standards does not automatically establish lawful residential use.
✅ Having tenants living there for years does not prove the property has the required approvals.
✅ A previous owner's assurances are not a substitute for checking relevant records.
At Berrymans, we believe good property management isn't just about collecting rent. It's about identifying potential issues, asking the right questions and helping owners make informed decisions.
💬 Landlords, have you ever checked whether all the living spaces in your rental property are legally approved for their intended use?
📖 Source: Tenancy Advisory – Sarina Gibbon, Can You Still Bank on "But They Had Somewhere To Live"?
Unlawful rental property NZ: Could landlords face years of rent refunds? Learn what a recent High Court judgment means for property owners.