Allocating liability for tenant damage to rental properties
“The NZ Property Investors’ Federation (NZPIF) is extremely pleased that tenants are now at least partially responsible for the damage they cause to their rental property,” says Andrew King, Executive Officer of NZPIF.
In 2015 a High Court ruling left landlords paying for accidental damage caused by tenants. Prior to this ruling, tenants had always been responsible for damage that they caused to their rental property.
While all political parties disagreed with the High Court Ruling, it took a year for the NZPIF to convince the then Government to introduce a change to the Residential Tenancies Act to address the matter. It then took more than two years before the Bill was finally passed this week.
The Bill now holds tenants partially responsible for damage they cause, limiting their liability to the lower of four weeks rent or the landlord’s insurance excess.
While this is considerably better than the current situation, it is quite a complicated solution. Landlords will have to provide insurance information to their tenants, tenants’ liability will be determined by the amount of rent they are paying and the landlords excess rather than any relevance to the actual damage. Both landlords and tenants may have to pay considerable amounts of money depending on how many incidents of damage the insurer and Tenancy Tribunal decide have occurred.
Overall the NZPIF is extremely pleased that they have obtained at least a partial solution to the problem of tenant liability for damage.
The New Zealand Property Investors’ Federation represents 6000 property owners and is responsible for educating and supporting landlords to ensure New Zealanders have access to high quality rental properties.