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Tenancy reforms: Who pays if the tenant damages your property?

By Mathew Martin - 28 Aug 2019

In 2015 the Court of Appeal told landlords they could not recover the cost of damage caused by their residential tenants unless it was done intentionally. This was because the Property Law Act 2007 said that a landlord could not require a tenant to meet the cost of damage which can be insured against. From 27 August 2019 the Residential Tenancies Act 1986 dictates the law on this issue.

Now tenants are liable to pay up to four weeks' rent for careless damage while tenants on income-related rents are liable for the lesser of four weeks' rent or the landlord's insurance excess.

Disputes about the cause of damage must be resolved in the Tenancy Tribunal, where to recover from the tenant, the landlords must prove:

  • the damage is not fair wear and tear; and or
  • the damage was done intentionally by the tenant (or someone the tenant is responsible for on the property); or
  • the damage was caused by conduct that constitutes an imprisonable offence i.e. a P lab.

Landlords are also now obliged to:

  • include in the tenancy agreement information about whether the premises are insured, and if it is, set out the excess payable by the tenant.
  • inform the tenant that a copy of the policy is available on request.  In this regard, the best course is simply to give the tenant a copy of the policy from the outset.

Defaulting landlords render themselves liable for a fine of up to $500.

If you find yourself in a dispute with your tenant or landlord, contact Mathew Martin or any member of our litigation team for assistance.


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