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Tenant liability intervention sought

Political solution to unjust new rules relating to tenant damage of rental properties could be on the cards – if MPs heed the call of landlord advocates.

Wednesday, October 5th 2016, 10:00AM 1 Comment

by Miriam Bell

Outrage over a Tenancy Tribunal ruling which demonstrates the problems with a new rule on tenant damage of rental properties has been building over recent weeks.

The ruling in question left a Foxton landlord liable for the damage to his rental property after his tenant let her dogs urinate in the house – even though the tenancy agreement had specified no pets were allowed.

It came after the Tribunal adopted a new rule, following the Holler & Rouse v Osaki case, which left residential landlords liable for accidental damage caused by tenants

Landlords nationwide have expressed concern at the precedent set by the Foxton case, by the Tribunal rule itself, and by the environment they create.

In response, the NZ Property Investors Federation has reached out to politicians in a bid to find a solution to the issue.

NZPIF executive officer Andrew King said that, as the Osaki decision cannot be appealed to a higher court, the only option is legislative change to have the Residential Tenancies Act amended.

It needs to be changed so that courts cannot interpret that the Property Law Act overrides the RTA and that tenants are not responsible for any damage they cause, he said.

“We believe that there are better ways to protect tenants than absolving them from blame and holding rental property owners financially responsible.”

To this end, the NZPIF has spoken to Housing Minister Nick Smith and a range of other politicians across the political spectrum.

King said they had explained the ramifications of the Osaki case to the opposition parties and sought their support for asking the government to rectify the unjust situation.

No one wants tenants to be financially ruined through an accidental mistake, but the politicians seem to realise that the current situation is not balanced – and that something needs to be done, he said.

“We were pleased to find there is cross party support there to support the government to make some changes.

“It is not a given but, in principle, there is agreement that the problem needs to be addressed and resolved. Which is great news.”

NZPIF has provided the housing minister with extra information to clarify the issues and government policy advisors are now examining the situation.

King is hoping to meet with Nick Smith later this week and he will also be talking to the principal tenancy adjudicator.

“We are hopeful that a suitable solution that protects tenants from financial ruin, but doesn't absolve them of all responsibility, can be found,” he said.

“We will be working hard to help develop this solution and get it into effect as soon as possible.”

In the meantime, landlords should not forsake the legal process in cases of accidental damage, according to one tenancy expert. director Scotney Williams said some landlords are just flagging the Tribunal.

But it is in a landlord’s best interest that they pursue their rights as far as they can, he said.

“Landlords should go to the Tribunal and argue their case. If they are not happy with a decision, they should appeal to the District Court. They shouldn’t give up on the process based on what the law is at the moment.”

Despite this, Williams hopes there is a change to the current situation.

“We are all asking where to from here. Because of the situation that we have been left in with the Osaki decision – which appears to have been misapplied. It just doesn’t seem to make any sense.”

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Comments from our readers

On 6 October 2016 at 11:19 am Glenn Y said:
Tenants should be held accountable, especially the ones in this case when they were aware no pets were allowed. All tenants should take contents insurance cover, and landlords should make it clear to tenants that they should or the tenant risks being held responsible for all damage they cause regardless of whether it is accidental !!

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