While this is really sad, unfortunately things go two ways.
I'm currently working on a project where the tenant did unauthorised building work which included removing a wall that was both load bearing and contained a bracing element, putting in new windows and putting in an illegal small second kitchen in order to sublet part of the house. Of course, there is no fire rating as would be required to have a second dwelling. Because it is the owners responsibility to apply for resource (for creating a second dwelling) and building consents, the Council are currently taking them to court. The bank is threatening that the landlord may have defaulted on their mortgage agreement because they haven't kept the house in a "safe condition" and because of the unconsented work. The tenant has left the country and is now thought to be back in their country of birth.
All the work was done for "cash" so there is no record of who did it.... and, if they were found, the tradies would just deny doing the work.
The property manager isn't accepting responsibility as the work was done between inspections and they say they did their job by informing the landlord as soon as they noticed what had been done at the next inspection.
It's going to cost the landlord over $60,000 (not including any fines imposed by the courts for unconsented building work) for "work" they had no idea was taking place.... and, because the tenant has fled back to Asia, no chance of ever recovering the money from the tenant.