Com­pen­sa­tion from ten­ants

Kapi-Mana News - - CONVERSATIONS - ALAN KNOWSLEY LE­GAL MAT­TERS

We are of­ten asked whether a land­lord can claim com­pen­sa­tion for dam­age from their ten­ant.

In a re­cent ex­am­ple, a group of friends had been flat­ting to­gether for a few years.

Dur­ing a re­cent in­spec­tion their land­lord dis­cov­ered that the ten­ants had been man­u­fac­tur­ing metham­phetamine in the flat. The ten­ants were evicted and the land­lord is now seek­ing com­pen­sa­tion from them to pay for the dam­age caused to the flat.

In or­der to claim com­pen­sa­tion for dam­age from a ten­ant, a land­lord must es­tab­lish that the dam­age to the ren­tal prop­erty oc­curred dur­ing the ten­ancy, and is more than fair wear and tear. When will a ten­ant be li­able? A ten­ant will be li­able for in­ten­tional dam­age done by them or a per­son they al­lowed onto the prop­erty. How­ever, a ten­ant will not be li­able for dam­age if they can prove that it was not in­ten­tion­ally caused by them or a per­son they al­lowed onto the prop­erty.

In a re­cent case the ten­ants left a pot to boil on the stove with din­ner cook­ing. The pot caught on fire and set fire to the kitchen, caus­ing ex­ten­sive dam­age.

The court held that the ten­ants could not be sued as the dam­age was not in­ten­tional.

Land­lord in­sur­ance – does this cover dam­age that is care­less but not in­ten­tional?

Usu­ally the land­lord’s in­sur­ance will cover un­in­ten­tional dam­age caused by the ten­ant. But sig­nif­i­cantly, where a ten­ant, or some­one they al­lowed on to the prop­erty, has in­ten­tion­ally dam­aged the prop­erty, this will usu­ally not be cov­ered by the land­lord’s in­sur­ance pol­icy.

The land­lord must dis­close to the ten­ant whether or not any care­less (but not in­ten­tional) dam­age is cov­ered by their in­sur­ance.

If it is cov­ered, the ten­ant is not re­quired to pay for the dam­age, pay for the ex­cess of any in­sur­ance claim, or re­pair the dam­age to the prop­erty.

What if the land­lord does not have in­sur­ance?

If the land­lord is not in­sured, they can ap­ply to the Ten­ancy Tri­bunal for a work or­der, to as­sess whether the ten­ant can be made to rem­edy the care­less (but not in­ten­tional) dam­age.

The group of friends who man­u­fac­tured metham­phetamine in their flat will most likely be li­able to pay their land­lord com­pen­sa­tion be­cause the

The land­lord must dis­close to the ten­ant whether or not any care­less dam­age is cov­ered by their in­sur­ance.

dam­age is more than fair wear and tear and was done ‘‘in­ten­tion­ally’’ (prob­a­bly reck­lessly) dur­ing their ten­ancy.

If you are a res­i­den­tial ten­ant or land­lord and are con­cerned about dam­age to a ren­tal prop­erty, you should make sure you have the in­sur­ance you think you have by talk­ing to your bro­ker and also get­ting ex­pe­ri­enced le­gal ad­vice.

What if a land­lord rents a metham­phetamine-con­tam­i­nated prop­erty?

If a land­lord rents a metham­phetamine-con­tam­i­nated prop­erty (even un­wit­tingly), the ten­ant can re­cover com­pen­sa­tion from the land­lord for any ren­tal paid and any dam­age to the ten­ant’s prop­erty.

It pays to do a metham­phetamine con­tam­i­na­tion test at the prop­erty reg­u­larly – at the start and end of each ten­ancy and dur­ing a ten­ancy if your ten­ancy agree­ment al­lows.

Col­umn cour­tesy of RAINEY COLLINS LAWYERS phone 0800 733 484. If you have a le­gal in­quiry you would like dis­cussed in this col­umn please email Alan on aknowsley@rain­ey­collins.co.nz.

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