Hamilton City Council inspected the property and deemed some additional work carried out by Young - which he says was the addition of an oven - made the property a separate dwelling, requiring it to have a permit.
The council ordered the tenants to move out because it was not a habitable space, forcing them to take time off and go through the stress of finding another property quickly.
The couple won a claim at the Tenancy Tribunal and Quinovic Property Management and Young were found joint and severally liable to pay them $4157.44 in rent because the downstairs dwelling was illegal. They were also ordered to pay a further $400 in exemplary damages because landlords should know the rules governing rental properties.
The tribunal said while the breach was not deliberate, there had also been a failure by Quinovic and Young by not ensuring the tenancy property could be rented out as a separate dwelling.
In awarding the payment, it took into account the couple had been given money to compensate for the house going on the market, been allowed to stay in the property for longer and had help to find a new place.
Young told the Herald the whole process had been a nightmare and he had relied on Quinovic to know what it was doing.
"I didn't realise I could still be liable to Quinovic's mistakes. If they knew that they couldn't rent it out [as a separate dwelling] they should have told me and I would have rented it for boarders or a flatmate."
Young said whether the downstairs area of the property was classed as a separate dwelling because it had an oven had been a grey area and one the council had deliberated over. He said there was nothing wrong with the standard of the property and it came down to a technicality.
He said he paid half the cost within two days of the ruling and had expected Quinovic to pay the other half.
"The tenants have a clear path for getting the money under due process if they want it, by going to debt collection."
But Quinovic Hamilton licensee Mark Laurence said the company had repaid the couple the portion of rent it had received as part of its management fee, as well as half of the $400 fine and tribunal application fee within two days of the order being made. The remainder of the rent collected was held by the property owner.
"I have refunded all money received from the tenancy. I can't refund money that is not in my possession," Laurence said.
According to the order the couple were advised by Collections to chase Quinovic for the outstanding amount, but Young said he had recently been made aware that this had not happened.
After seeking legal advice earlier this month, Young was now considering paying it and then taking Quinovic to the Tenancy Tribunal.
Hamilton City Council building control manager Cory Lang said while there were some exemptions, building consents were generally required for additions or alterations.
He recommended anyone unsure about the requirements to get in touch with the council to check.
