The snag arises when you insurance company classifies every stain on the carpet and every hole in the wall as a 'separate event' (therefore each one has a separate excess) but the TT rules that it was all one event and therefore the tenant only has to pay one excess.
Announcement
Collapse
No announcement yet.
Rental property damage: Landlords liable - court rules
Collapse
X
-
The snag arises when you insurance company classifies every stain on the carpet and every hole in the wall as a 'separate event' (therefore each one has a separate excess) but the TT rules that it was all one event and therefore the tenant only has to pay one excess.
Looks to me like if elevated to the District Court that would be overturned also. The intention is clearly for the tenant to make the landlord whole for damages, with capped liability.AAT Accounting Services - Property Specialist - [email protected]
Fixed price fees and quick knowledgeable service for property investors & traders!
Comment
-
Tenant damage ruling overturned
Friday 10 February 2017
A controversial Tenancy Tribunal ruling could have costly consequences for property investors.
By Miriam Bell
The case involved a Foxton tenant who let her dogs urinate in the house she rented – even though the tenancy agreement specified no pets were allowed.
The damage was such that carpets throughout the house had to be replaced.
While the Tribunal adjudicator accepted the damage was due to animal urine, it found that, although the tenant had breached the agreement, the landlord hadn’t established the damage was intentional.
For this reason, the adjudicator did not require the tenant to pay for the cost of replacing the carpet or the lost rental costs.
Landlords around the country were disturbed by the ruling as it appeared to demonstrate how a new Tribunal rule, adopted following the Holler & Rouse v Osaki case, would be applied.
The Tribunal rule states that if it is established damage to a rental property was due to carelessness, rather than deliberate or criminal behaviour, and the landlord has insurance, the tenant does not have to pay for the damage.
In the case in question, the landlord, David Russ from Tekoa Trust, said the way the damage would have been assessed by his insurance company would have left him with a vast excess which made a claim pointless.
Russ appealed the Tribunal decision to the Palmerston North District Court on the basis that the Tribunal had wrongly applied the law.
He argued that the tenant’s actions did not constitute an accidental or careless act but was clearly both an intentional and deliberate act – and the damage should be held to be an intentional act.
The Palmerston North District Court has now ruled in his favour.
Judge David Smith said he approached the case on the basis that it was the Tribunal’s interpretation of the law which was disputed.
He found that the Tribunal adjudicator’s interpretation of the Property Law Act, along with their understanding of the Osaki decision, meant the extent of the damage in the case was not examined fully.
In his view, photos and a report made it clear the carpet had to be replaced.
The adjudicator was wrong to conclude that the damage was not intentional, Judge Smith said.
“The tenant breached the agreement by letting the dogs in. That act was intentional but no loss was caused by that act.
“But after the dogs had urinated on the carpet once or twice, continuing to let the dogs in on numerous occasions – which would have been required to damage the carpets to the extent shown – was a deliberate intentional act by the tenant.”
For this reason, the adjudicator was wrong to decline Russ’s claims for the costs of the damage and the loss of rent and the tenant should pay the costs, Judge Smith found.
Russ said he was pleased with the judge’s decision. “The outcome was what we hoped for as we won on every point and, in the end, common sense has prevailed.”
The decision comes at a time the government is consulting on potential law changes to address the tenant liability issues raised by the Osaki decision.
Comment
-
Originally posted by sidinz View PostActually, the news is in on the appeal in the Foxton case. The District Court overruled the Tenancy Tribunal and the tenant had to pay over $3000.
The damage was held to be intentional on the basis that it was ongoing and the tenant knew it was likely to happen if she let the dogs inside.
In past cases, sometimes the tenant has been only liable for the damaged carpet if matching carpet is still available. If not, you may be liable for the whole house. However, they usually take into account the depreciated value of the carpet and charge you for that, rather than the cost of new.
So they had a dog they shouldn't have had and it was felt that the damage was ongoing.
So if you are allowed to have a dog and the dog caused damage in one instance (rather than you should have learnt after the 1st time the dog did the damage) then it could be contended that it is an accident.
In short - once could be an accident, several times doing the same thing is stupidity.
Comment
-
Thanks for the advices. The landlord agreed to let me have dogs inside the house and i did not have any contract signed so i think my case is abit different to the one above. I am aware that i am responsible for the replacement however as someone mentioned above am i responsible to replace carpets for the whole house if no identical carpet was found and cannot be repaired? I just want to make sure that i am not paying more than what i am responsible for. Again, if i am responsible to replace the whole house's carpet i am happy to pay ontop of the bond i have already paid if the bond is not enough. Thanks.
Comment
-
You must be commended on your attitude to make good damage you've caused accidental or otherwise. Once you understand your legal position then you might consider the right thing to do. Sometimes they differ.
As a landlord I would be very unhappy with mismatched carpet in one of my properties so if want full house re carpeted but I'd also be prepared to pay towards it as it is my want vs. a need... Keep the lines of communication open with the LL and I'm sure (if the LL is reasonable) you'll come to the right agreement - especially if what you offer is greater than your legal obligation.
Comment
-
Originally posted by flyernzl View PostThe snag arises when you insurance company classifies every stain on the carpet and every hole in the wall as a 'separate event' (therefore each one has a separate excess) but the TT rules that it was all one event and therefore the tenant only has to pay one excess.Free online Property Investment Course from iFindProperty, a residential investment property agency.
Comment
-
Originally posted by flyernzl View PostThe snag arises when you insurance company classifies every stain on the carpet and every hole in the wall as a 'separate event' (therefore each one has a separate excess) but the TT rules that it was all one event and therefore the tenant only has to pay one excess.Squadly dinky do!
Comment
-
Purusing our ANZ/VERO policy this morning and found this little gem (not).
THE EXCLUSIONS
We won’t pay for…
Damage to swimming or spa pools caused by
hydrostatic pressure.
Loss or damage caused by any of the following:
•
Mechanical or electronic breakdown or failure unless actual burning out occurs. However where arcing occurs
in any lighting or heating element, fuse, protective device or electronic contact, loss or damage is always excluded
•
Any defect in design or inherent fault
•
Wear and tear
•
Insects or vermin (except by opossums)
•
Scratching, chewing, tearing or soiling by domestic cats, dogs or birds, where the occupant of the home is anyone other than you
•
Any defect in workmanship or any damage caused by any cleaning process, renovating, repairing or restoring any property, but only in respect of the property that has undergone that process, except where cover is provided by the New building work benefit.
However, we will cover any resulting loss or damage provided it is not also excluded.
18
This is recorded under the tenanted addition to the policy.
So reading this it seems that with this policy (which I assume is standard), carpets and or other landlord fittings are not covered for animal damage. Which leaves a tenant absolutely responsible.
So had the Landlord in Foxton had this policy then the TT would have had to rule against the tenant.Last edited by Viking; 12-02-2017, 12:39 PM.
Comment
-
Originally posted by Viking View PostSo had the Landlord in Foxton had this policy then the TT would have had to rule against the tenant.
Recently, a local LL sought to have a bond deduction for the removal of a smoke alarm by the vacating tenant. The LL produced a photo that showed where the smoke alarm was, because the ceiling had been re-painted prior to that tenancy and the [now] smoke alarm vacant spot was a nice, round, different colour.
Because the LL did not have a pic of that same ceiling with the smoke alarm in place, the claim was dis-allowed by the Kangaroo Kourt Klown.
Comment
Comment