In a New Zealand first, an Auckland landlord has to refund $15,000 to a tenant after renting out an unconsented, converted garage as a separate unit.
Manurewa landlord Satya Silan faced the Tenancy Tribunal for what the Ministry of Business, Innovation and Employment called a "serious health risk".
It has also issued a warning to other landlords, saying there are "significant consequences".
Building and Construction Minister Nick Smith has applauded the successful prosecution under new laws passed last year.
The Tenancy Compliance and Investigations team looked into Silan after reports a family with a young child were being kicked out of the property with nowhere to go.
Mr Silan had been warned before, with Auckland Council previously issuing notices to stop using the garage as a third household unit, to get rid of the unconsented work and to restore it to a garage.
"Mr Silan continued to rent the garage before this work was completed," team manager Steve Watson says.
"We also found that this was not the first time Mr Silan had rented the converted garage to a tenant."
Silan was ordered to refund $15,840 and to pay $750 in exemplary damages. All of the refund will go to the tenants once the landlord has paid.
"The Tribunal decision should serve as a serious warning to landlords that they are running a business, and it is their obligation to get it right, providing a warm, dry and safe home for their tenants," Mr Watson says.
Dr Smith says it is not the intention to prosecute every case, but "to improve compliance".
"Prosecutions are focused on the worst cases, where landlords have not acted in good faith or where landlords have a track record of poor compliance," he says.
He encouraged tenants with disputes or problems with their landlords to go through the tribunal.
Since the new legislation came into force:
- the compliance team has received 242 complaints
- 26 were found to not be in breach of the law
- 76 reach a compliance agreement with the landlord
- 55 landlords were given advice
The legislation also required rentals to have smoke alarms and insulation by 2019.