Pensioner's victory may force state rent review

A 77-year-old pensioner has won a legal victory which may force Housing New Zealand to offer all its tenants a review of their rent based on "special circumstances".

District Court Judge Nicola Mathers has ordered the state-owned housing company to give Freemans Bay tenant Ross Bradburn a chance to apply for a new determination of his rent, taking account of his special circumstances.

The company admitted making a series of errors in calculating Mr Bradburn's rent when his flat was transferred from the Auckland City Council to Housing NZ in early 2003.

Tenants Protection Association chairman Peter Klein said the judgment appeared to mean Housing NZ would need to inform all its tenants of their right to claim "special circumstances".

"They may have to make sure that prospective tenants are informed that income-related rents may not be the bottom line," he said.

Mr Bradburn's rent at the time of the transfer to Housing NZ was $85 a week.

Under Labour Government policy, Housing NZ charges rent at a quarter of the tenant's income. Mr Bradburn's income in the previous year, when he worked part-time for The Edge entertainment centre, worked out at an average of $448 a week, including superannuation. So his rent in normal circumstances would have been $112 a week.

However, the company had agreed to initially cap rents on the city council flats so it advised Mr Bradburn that he could continue paying $85 a week.

A week later, a staff member noted that Mr Bradburn had said he would no longer be working for The Edge, so his rent was reduced to a quarter of his superannuation, $59 a week.

A year later, when Mr Bradburn filed his annual income statement, the company noticed that he was still working for The Edge, and raised his rent to $109 a week.

Four months later, it recognised it had made a mistake and cut his rent back to $87 a week as the rent cap was being lifted in small annual steps.

Mr Bradburn appealed, arguing that the sudden changes had put him under serious stress. He submitted that his rent should stay at $59 a week for a period to allow him to adjust.

His appeal was rejected by the State Housing Appeals Authority. But Judge Mathers has overruled that decision because, she said, there was no evidence that Housing NZ gave any consideration to Mr Bradburn's special circumstances when it fixed his new rent.

She said section 43(4) of the Housing Restructuring Act 1992 required the company to consider special circumstances.

"Mr Bradburn has not been given notice of an opportunity to apply for special circumstances. That should have been done. It was not done," she said in a reserved decision.

She referred Mr Bradburn's case back to Housing NZ and directed it to give Mr Bradburn "a fair opportunity to provide all relevant information for a fresh determination".

"Of course, there is no guarantee that any new decision will necessarily be different," she added.

A jubilant Mr Bradburn said it proved that a tenant could beat the country's biggest landlord represented by Wellington Queen's Counsel Mary Scholtens.

A spokeswoman for Housing NZ, Marie Winfield, said the company was "considering its options" in the case. One option is a further appeal to the High Court.