A court ruling that might have paved the way for thousands of rent refunds has been overturned, leaving the tenant with a $10,000 bill to pay her landlord.

A Dunedin landlord was ordered to refund $10,000 of rent back to a tenant, Natalie Parry, because she had been living in a property with unpermitted alterations. Parry had stayed for 29 weeks.

Vic Inglis and his wife bought the property as is. They did not realise that the alterations were different from plans submitted to the Dunedin City Council, and did not request a LIM report.

The Tenancy Tribunal said the tenancy was unlawful because of the unpermitted work and the tenant was entitled to a full refund of all rent paid.

READ MORE:

* Lack of permits could lead to widespread rent refunds, landlords fear

* Tenancy ruling questions full rent refunds in unconsented rentals

New Zealand Property Investors Federation executive officer Andrew King said there would be tens of thousands of properties in that situation.

Now, the District Court in Dunedin has overturned that decision.

Judge Kevin Phillips said the questioned part of the property was completed to such a standard that the landlord was able to get the necessary certificate "in very short order".

Phillips said photographs showed the work had been done to a very high standard.

"There is no evidence that the tenant made complaints concerning the health of the tenants, dampness, mould, or any issues related to the sanitary operation of the area in question. There was no ingress of dampness or mould."

The tenant did not suffer any detriment of any kind as a result of what was a technical breach, Phillips said. "There did not appear to be any consideration given as to whether or not the tenant was unjustly enriched by the order that was made by the tribunal."

Parry was ordered to repay Inglis $10,960.44. Costs were not awarded to either party.

* Comments on this article have been closed.