Amendments to the Residential Tenancies Act
Changes to tenancy law come into effect this month affecting the liability for any damage caused by tenants to the property they rent.
It has been brought in to restore how things were before the Tenancy Tribunal became bound by the Court of Appeal decision in the Holler & Rouse v Osaki case. That decision meant that if a property had insurance, then a tenant could not be held liable for any damage they caused carelessly or negligently. That just didn’t seem to sit right.
Now, if tenants damage a rental property as a result of a careless or negligent act, then they can be held liable for the cost of repairing the damage up to a maximum of four weeks’ rent or the landlord’s insurance excess, whichever is lower.
So that a tenant knows what insurance there is on a property, and how much they may need to pay in the event of a claim, landlords need to tell them. From 27 August 2019, details about the insurance on the property must be included on any new Tenancy Agreement. The information needs to specify if the property is insured or not; and if so, what the excess amount is. It should also state that a copy of the relevant policy is available to the tenant on request.
A tenant who entered into a Tenancy Agreement before 27 August can request the landlord to provide the same information and landlords need to make it available in a reasonable time.
If anything changes to the policy for the property that affects tenant liability, that makes the information provided in the tenancy agreement incorrect, the landlord must provide the correct information in writing to the tenant.
People may be concerned that this gives tenants the freedom to cause mayhem in a house, but only be liable up to a maximum of 4 weeks rent – but this limit does not apply to any damage caused intentionally or maliciously.
If a landlord does not provide information regarding the insurance of the property, there could be a financial penalty of up to $500.
Contact our team if you would like to know more about the amendments relating to tenant liability for damage.
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