Container homes may be a cheaper way to build or get into renting, but a recent Tenancy Tribunal ruling has made it clear such homes must be compliant with healthy homes standards and tenancy rules.

Far North tenant Urupani Raui​ was awarded more than $2500 from her landlord for problems with leaks, mould and a lack of smoke alarms.

The property, in Lake Ohia, was managed by Wendy Brown​ from Northland Realty.

The main living area was two shipping containers – one of which was unlined – linked by an atrium with a set of large barn-style doors at one end.

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The property ran on solar power and gas, and used rain water tanks.

The tenancy began in April 2022, after Raui viewed the property and asked for some improvements.

However, she had problems with the shipping containers leaking, especially if the main doors fell open and the unlined shipping container was damp and mouldy.

But Brown said the property had been used as by the owner as holiday accommodation and Northland Realty had made it clear it was a “lifestyle block with structures for rent, not a residential house”.

She said the property should be exempt from the Residential Tenancies Act and subsequent healthy homes standards because it was bare land, with temporary accommodation or a relocatable home.

But Tenancy Tribunal adjudicator Nicholas Blake​ dismissed this claim, finding the property was not bare land, the home was not relocatable and no agreement had been entered for temporary accommodation – of 28 days or less.

He explained the Act imposes minimum standards and landlords are not free to argue those standards do not apply because the tenant accepted the premises was on an “as is where is” basis.

Blake accepted the landlord genuinely misunderstood because of the nature of the property and thought they had a mutually beneficially arrangement with Raui.

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“>the experienced property manager,” he said.

But Blake was less understanding about the property having no smoke alarms – a requirement for landlords since July 2016.

“The obligation to have smoke alarms has been in place for several years. Compliance is extremely inexpensive and simple. The consequences of failure could have been catastrophic,” he said.

Blake awarded Raui compensation of $1800 for the dampness and $2500 in exemplary damages for the lack of smoke alarms.

However, he took $1070 off that amount for costs incurred when Raui left the property, such as for cleaning, weed spraying, removing rubbish and re-topping the water tanks.

This amount also included $200 for the inconvenience of having to re-home Raui’s pet goat.

The tenancy ended in November 2022 after Brown issued a 90-day notice to terminate the tenancy to carry out extensive alterations.

Brown told Stuff the matter was settled with completion of the tribunal’s orders and neither Northland Realty nor the property’s owner had further comment.

Raui could not be contacted.

Container homes have been touted as a cheap way to enter the rental market but others have found the cost of renovating them to compliant standards is more expensive than expected.

In 2019, Hawke’s Bay architectural designer Melissa Burne found it cost $127,000 to build a compliant shipping container home – far more than the $60,000 some people thought.

But the compact homes can reach high standards with a bit of thought, with IQ Container Homes creating the first container home to reach a Homestar rating of eight in 2017.