A Queenstown landlord who illegally housed more than 20 people in sheds and garages has been fined over $113,000 and banned from operating as a landlord for three years. James Truong was ordered in 2023 to pay $113,723.56 for multiple breaches of the Residential Tenancies Act, following years of operating an unlicensed boarding house.
According to the Ministry of Business, Innovation and Employment (MBIE), the property had previously been flagged in 2020, but an inspection in 2023 revealed 11 people living in a five-bedroom house, with a further 11 housed in two converted garages and a backyard shed.
Truong housed tenants in sheds with no direct access to basic facilities
Truong continued to house tenants in substandard and illegal conditions despite prior warnings to cease the operation, converting outbuildings into makeshift rooms with no direct access to essential facilities. One tenant said he paid $440 a week to share a room in a converted shed with another person.
“It’s like storage but he converted it as bedrooms,” he said. “There was a microwave, a sofa and two small rooms… The shed doesn’t have any bathrooms so we need to go inside the house to use the bathroom. Even the laundry is in there so we have to walk from the back of the house to the inside of the house.”
Landlord Attempted to Hide Illegal Operation from Inspectors
Truong allegedly went to great lengths to conceal his operation as scrutiny from MBIE intensified. RNZ uncovered text messages from Truong instructing tenants to dismantle beds, remove food from fridges, and hide clothing in plastic bags before inspections.
“He is messaging us to hide in the shed. He had cameras so he can see if it’s MBIE. So he is messaging me saying ‘ok don’t go out from your room just stay there until I say so’. It’s like we were doing something wrong,” said one tenant.
When MBIE launched a formal investigation, Truong evicted five Indonesian tenants from a converted garage with just one night’s notice. He also attempted to pressure tenants into signing documents that falsely claimed they had willingly accepted the accommodation.
Vulnerable Tenants Were Too Afraid to Report Exploitation
Many of the tenants were new to New Zealand and unaware of their rights. One said he was afraid to contact MBIE out of fear of eviction. “I don’t know the kind of rules and it’s really hard to find an accommodation so I thought like ‘maybe that’s how it works here’. So we don’t know that we are getting exploited.”
MBIE Defends Delay in Enforcement of Tenancy Law Breaches
MBIE’s national manager Brett Wilson said the case reflected “the seriousness of the issues uncovered.” The refund of 40% of rent paid by tenants is still being calculated, and MBIE has encouraged former tenants to come forward.
Wilson defended the three-year gap between the original 2020 warning and the 2023 investigation. “We do try and follow up cases as frequently as we can but with 600,000 estimated rental properties in the country we aren’t always able to follow up cases as promptly as we would like to.”
Tenant Advocacy Group Urges Stronger Penalties and Systemic Reform
Zac Thomas of Renters United criticised the delay in enforcement, saying it allowed a “cowboy culture” to flourish. “When you do the math behind what this landlord must have made… [the penalty] is a slap on the wrist compared to the consequences that there should be.”
“This person should never be able to be a landlord again.”