Tenants will have to pay up for rental damage
Tenants will soon have to pay for any accidental damage they make to a rental property — rather than rely on landlords’ insurance.
But the amount will be capped at four weeks’ rent, so landlords cannot cripple them with huge bills.
The change comes after a landmark court case in which the owners of a Dunedin house which burned down were not even able to claim the insurance excess back for the damage.
It is part of a series of measures passed into law yesterday with unanimous backing.
Associate Housing Minister Kris Faafoi said the liability was set at a rate which balanced landlords’ costs and encouraged tenants to look after their rental property while not facing excessive costs.
Landlords will have to say whether they are insured and for how much in the tenancy agreement, and make any insurance details available on request. If they don’t they can be fined $500.
The changes came about after a Court of Appeal ruling. In 2009, tenant Tieko Osaki put a pot of oil on the stove which then caught fire and burned down the Dunedin house she was renting with her husband.
The owners had insurance with AMI, which covered the $216,000 cost of the repairs. AMI went after the tenants for the costs and after a long legal battle in several courts it was decided that the owners could not even claim back their excess, let alone damages.
It was also determined that tenants did not have to pay damages if the landlord had insurance.
The decisions frustrated landlords, who felt they carried too much of the burden for damages.
In another change, landlords will no longer be able to rent out garages or other unconsented spaces without fear of prosecution under tenancy laws.
A gap in the law meant that if tenants living in illegal dwellings wanted to take action, they were unable to take their landlord to the Tenancy Tribunal because their property was not covered by the Residential Tenancies Act.
The latest law change extends tenancy laws to all buildings intended for living in, even if they are illegal. This means tenants who are housed in a garage or rundown dwelling can take their landlord to the Tenancy Tribunal, and will be able to get their rent payments back.