Entrance glass door broken and who pays

[bhiren123]

Hi
Is anyone help and advice me in this matter please? Appreciate all advices. I am very much new in commercial lease. Due to bed weather and wind one of my glass entrance door broken. My insurance do not cover frontage. Generally who responsible to pay for replace the door?

[drelly]

What does your lease agreement say?

[Davo36]

Are you the tenant or the landlord?

[Tan]

http://www.propertytalk.com/forum/showthread.php?t=22061

This talks about the property law act in respect to glass breakage. It doen't seem to be widely known.

We claim insurance, then the tenant pays the excess.

[bhiren123]

Entrnace door broken

I am a tenant. As per my lease clause 3 (Outgoings) Insurance premimums and related valutation fees and any insurance excess in respect of a claim but not exceeding $500(clause 23).
Now as per 23.1 (Landlord shall insure) The landlord shall at all times during the term keep and maintain any buildings on the property isured under a policy of the type of show in the First Schedule against loss damage or destruction by fire and such other risks as the Landlord may resonably determine and such cover may extend to:
(a) a 12 month indemnity in respect of consquential loss of rent and outgoings,
(b) loss damage or destruction of any of the Landlord's fixtures fittings and chattles or
(c) public liability.

[Tan]

Give the landlord a call to get the insurance claim started. No worries.

[TrevorJ]

Hi,

A lot of debate on this issue and in terms o the landlord it is all bad. The Landlord has to pay for the damage to windows/glass not the tenant. It does not matter what your previous agreement said. Also the Auckland District Law Society comments that the excess does not need to be claimed back from the tenant. It is the Landlords responsibility.

I know it is not good news for the Landlords but it is good for the tenants.

Trevor

[barber]

Sorry to bump an old thread but I'm in a similar situation and just happened to find this thread in a search.

I am the tenant and one of the windows was broken overnight by what appears to be vandals. I have the clause in my lease: clause 3 (Outgoings) Insurance premimums and related valutation fees and any insurance excess in respect of a claim but not exceeding $500.

I pay the landlord for insurance that does cover glass under his name.

Is there still a debate on who pays the excess? Does the PLA 268-272 have any effect on the outgoings clause? $500 is not a small amount for me and to me it doesn't seem fair that I have to pay the excess on something I had no fault in.

Cheers

[Ivan McIntosh]

It's like a car accident that wasn't your fault...the driver at fault pays for the damage. But if the driver at fault does a hit and run - like the people that broke your windows - then you end up paying the excess whether fair or not. It isn't fair that you pay the excess when it wasn't your fault, but equally it wasn't the landlord's fault either. So, out of the two of you, someone has to quite unfairly pay the excess. In this case there is a clause in your lease covering who pays the excess up to a maximum of $500, and that happens to be yourself as tenant.

Those PLA sections covered off the existing practice whereby landlord insurers would pay for the damage and then try to recover all of it from the tenant. Eg you have a product launch party, guests smash windows or steal stuff, landlord claims, insurer sues you since your guests cost them money....a very inequitable circumstance since effectively you as tenant were paying for the insurance policy and rather than being grateful for your custom the insurer was not only enjoying your premiums via the landlord but now suing you into the bargain.

Because of the PLA amendments, leases switched to requiring payment of the insurance excess as part of the operating expenses, contracting out under s.271 in certain circumstances.

Have you checked for an obligation under the Schedule 2 lease terms to insure the glass yourself?

[barber]

Thanks for replying Ivan

There is no obligation to insure glass myself in Schedule 2. I found a newsletter from IC Frith on this very topic and they say I shouldn't be liable to pay for the excess: Can't post links so please google icfrith newsletter march 2013 [ edit http://www.icfrith.co.nz/files/file/...rch%202013.pdf cube ]

But my original question is still: Does section 268-272 of the PLA override the outgoings clause where I have to pay for the excess of a claim? It is a cost that does conflict with section 269 and section 272 says terms have no effect if they conflict with 269 to 271. Could this be what the IC Frith newsletter is talking about?

[Wayne]

I would think the specific contract you have signed (the lease agreement) over-rides the PLA.
Contract law.
It's not like the Tenancy Act which says you can't contract out of it - your lease is a contract between grown-ups.
But I'm not a lawyer.

[Ivan McIntosh]

Hmm, it's a good question, and thanks for asking it, because it prompted me to revisit the ADLS lease contracting out provisions in more detail. That was a worthwhile half an hour.

The default provision is that excesses cannot be recovered where the landlord is in fact insured, and it wasn't the tenant's fault etc (see s.269)3), in the absence of a s.271 contracting out provision.

What I was recalling was section 23.2 of the ADLS lease which does in fact contract out the excess...it provides that both the lessee and lessor agree that the landlord's excess is a cost against which the landlord is NOT insured.

However, the ADLS drafters have limited the exclusion to cases where the damage arises because of the act or ommission of the tenant, and that does not seem to apply to your case. Also, I don't quite recall when that contracting out provision came in.....somewhere in 2012? Your edition may not have the same clause in the first place.

[Ivan McIntosh]

I would think the specific contract you have signed (the lease agreement) over-rides the PLA.
Contract law.
It's not like the Tenancy Act which says you can't contract out of it - your lease is a contract between grown-ups.
But I'm not a lawyer.

Actually what it says is that you...wait for it....can't contract out of it unless you contract out of it

[Ivan McIntosh]

Searching a bit further, you might be interested in this....see pg 12.

http://www.adls.org.nz/media/8725799/commercial-leasing-paper.pdf

[barber]

Yes, I don't have 23.2 in my agreement.

Here is how I'm looking at it:

Damage was not my fault so PLA 270 does not apply
Landlord DOES have insurance INCLUDING glass cover
I have the clause 3.5 in the outgoings to pay for excess up to $500
PLA 269 'should' override that clause 3.5
PLA 271 Does not apply because there IS insurance
PLA 272 does apply because clause 3.5 is in conflict with PLA 269

So what is the conclusion?