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Tenants need to know about insurance

Take note landlords – if you are worried about liability for tenant damage, the time to talk to your tenants about insurance is now.

Wednesday, August 7th 2019, 1:06PM

by The Landlord

The Residential Tenancies Amendment Bill (No. 2), which makes tenants partially responsible for damage they cause to their rental property, received Royal Assent last week.

That means it is now law and REINZ is warning that means landlords and property managers have less than three weeks to communicate insurance details to new tenants to be compliant with the new legislation.

Under the changes, if a tenant causes intentional damage to a property they are now responsible for paying either four weeks rent or the landlord’s insurance excess (whichever is less) to cover the damage.

But for tenants to understand how much they would need to pay if they do damage, landlords have to provide their insurance information, including the excess details, to new tenants from 27 August 2019.

Landlords also need to inform tenants that a copy of their insurance policy is available on request.

REINZ chief executive Bindi Norwell says that if a landlord doesn’t do this, then they may be faced with a financial penalty of up to $500.

“While not as punitive as the insulation penalties, the last thing landlords will want is to be fined for not communicating their insurance details to new tenants.”

Further, for existing tenancies, insurance information must be provided within a “reasonable” time.

However, no details have been given as to what that timeframe is and at this point it is not clear as to what would constitute a “reasonable” timeframe, Norwell says.

“We will be working with MBIE over the coming weeks to try and get some clarification on that so we can communicate those details with landlords and property managers around the country to ensure they are not in breach of the RTA.”

Also, under the new legislation, if landlords make any changes to their insurance policies then they need to notify these changes to tenants in writing.

Finally, tenants also now need to be advised if a property isn’t insured, as tenants will still be liable for four weeks rent if they cause intentional damage.

“One thing tenants need to be aware of, is that if they invite guests to their property - to a party, for example - and the guests cause damage to the property, then as tenants they are responsible for paying to fix the damage - not the landlord,” Norwell adds.

Read more:

Tenants liable for careless damage – to a point 

New tenant damage, meth measures are only partial solutions 

Tags: compliance damage liability house insurance insurance insurance law landlords property investment property management REINZ RTA tenancy reform tenants

« IAG boosts premiums to reflect risksInsurance FAQs for uncertain times »

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AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
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BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 ▼7.65 ▼7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
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SBS Unwind reverse equity 9.95 - - -
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TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 ▼7.84 7.35 ▼6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼7.24 6.75 ▼6.39
Median 8.64 7.19 7.27 6.65

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