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After plans to demolish an “old and dingy” house and develop the site into townhouses were held up, the developer rented it out as a boarding house.

It quickly became overcrowded and issues with property maintenance and the presence of mould and asbestos emerged.

Now, the “head tenant” has won a substantial payout after a string of complaints revealed aspects of the premises were unlawful.

Peter Mazany’s company, Mazany Holdings, has owned the property and another in the Auckland suburb of Birkdale since 2016.

He has acknowledged he was at fault, saying he didn’t fully understand the rules around boarding houses.

Originally, the sites were slated for development, with plans to build 26 new terraced townhouses, but planning delays, Covid lockdowns and supply chain issues delayed his plans.

Instead, Mazany rented out rooms in one of the houses, first as a residential tenancy and later as a boarding house.

The house was set for demolition but the plans were delayed and it became a boarding house. Photo / Supplied

In a lengthy and detailed decision, Tenancy Tribunal adjudicator Robert Kee acknowledged the rules relating to boarding houses were not only complex, but it was the first time he’d dealt with such a case.

According to the decision, the small and modest house was originally two or three bedrooms but had been divided into six, with an open plan kitchen and dining.

Beside the house was an old, steel-clad garage that had been converted into a three-bedroomed sleepout, which was at that stage unconsented.

Typically, there were nine tenants, with six living in the house and three in the sleepout, who shared the facilities in the main house.

In June 2021, Benjamin Bruce Doyle moved into the house, signing a flatmate/house-sharing agreement, because Mazany reasoned that, as he regularly worked from the address, he was the head tenant.

The kitchen inside the house. Photo / Supplied

The following year, Mazany realised he should treat the house as a boarding house and replaced the tenancy agreements accordingly.

By 2024, Doyle became increasingly concerned about the condition of the house, including the presence of asbestos, moisture ingress and mould.

Mazany claims Doyle wasn’t opening his window and left his belongings in a room in the house that he used without permission.

Doyle left the property in May last year, after being asked to leave in March.

Investigations commence

After his departure, Doyle complained to Tenancy Services and Fire and Emergency New Zealand about the poor condition of the premises.

While the Tenancy Service’s compliance and investigation team did not explore all of the issues it identified at the property, because of the pending Tenancy Tribunal case, which was heard in the North Shore District Court earlier this year, it did issue a report determining a few.

Mazany didn’t dispute most of the Tenancy Services or Fire and Emergency findings and accepted his company was in breach of the rules for boarding house tenancies.

But he emphasised to the tribunal that he acted in good faith and in what he believed were the tenants’ best interests, providing the tribunal with a survey of seven past and present tenants who were satisfied with him and the house.

The shared living room at the boarding house in Auckland. Photo / Supplied

Doyle didn’t accept that, believing the company had breached its obligations and ignored his legitimate concerns.

In the tribunal decision, adjudicator Kee allowed some of Doyle’s claims, while rejecting others.

He found Mazany failed to provide a correct tenancy agreement or lodge the bond, but rejected Doyle’s claims the landlord hadn’t kept the premises reasonably clean.

“The premises are old and dingy. The interior could do with a repaint and a thorough deep-clean would not go amiss,” Kee found.

“Although the level of cleanliness could be better, I am not satisfied that the landlord breached his duties in this regard by failing to ensure that the premises was reasonably clean overall.”

Doyle also complained about the state of the house, alleging problems with everything from the decking and cladding to the vegetation and wiring.

Kee said even though there were plans to demolish the house, it still had to be kept in a reasonable fashion.

He said while the house was an outdated design, and wouldn’t be a comfortable home to live in, “the conversion to boarding house-style rooms made it worse”.

Kee found the house wasn’t maintained, the lean-to laundry had leaked, its flooring was damaged and the electrical plugs were insufficient.

Photographs of the section showed “the grounds were inaccessible and likely provided an inviting habitat for rats and mice”.

While he accepted Doyle’s concerns about the deck, there was no independent evidence that it was unsound.

“I am satisfied that Mazany Holdings did not maintain the house to a reasonable standard of repair in respect to the lean-to, the paths and garden maintenance.”

Kee also found Mazany Holdings intentionally breached Healthy Homes Standards for heating, water ingress and drainage.

Overcrowding at the property

He also ruled the house was too small to accommodate the number of people who were living there,

“A family of six would struggle to make a house like this work, let alone six independent adults,” the decision said.

Mazany has since reduced the number of tenants in the house to five, meaning it no longer qualifies as a boarding house.

In his decision, Kee ordered Mazany Holdings to pay Doyle $9889, of which about half, $4600, was for exemplary damages.

A bedroom at the address, where Peter Mazany says he provided safe, warm, dry and affordable accommodation. Photo / Supplied

Mazany said he accepted the tribunal’s decision and had attempted to apologise to Doyle.

He said he found himself in the situation because he hadn’t been able to get on with the planned demolition.

“Part of it is just life happens, so you get Covid, you get delays, you get supply chain issues, you get a whole lot of issues which prevented me from demolishing them,” he said.

Mazany said he thought he’d complied with the law and didn’t think there were safety issues at the house, explaining that he provided safe, warm, dry and affordable accommodation.

“I didn’t realise that it was actually a boarding house situation, although it’s very clear that if it’s six people or more, then it is.

“I made a mistake”.

He said he’d had many happy tenants, some who had lived at the property for four years.

Doyle was contacted for comment.

Catherine Hutton is an Open Justice reporter, based in Wellington. She has worked as a journalist for 20 years, including at the Waikato Times and RNZ. Most recently she was working as a media adviser at the Ministry of Justice.